What do smart beta strategies offer

Horanyi Botond (2019) What do smart beta strategies offer. Faculty of International Management and Business.

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My main task was with this thesis to inform and to increase awareness. Secondly, it is the purpose of this paper to provide a rather comprehensive structural introduction of Smart-Beta factorial investment With that said, my research questions and statements were: 1. Active Vs Passive, which one performs better in the long term 2. The emergence of Smart-Beta in today’s investment environment 3. Which factor shows the best performance? 4. I am researching to show the best available Smart-Beta/Multi-Factor strategy in the market based Nowadays World if we are not paying attention we can miss a lifetime opportunity, and still, not many pieces of literature are present in the topic of Smart Beta and Multi-Factor investment strategies. With this paper, I would like to encompass the available resources and analyze them for the desired knowledge to be-aware of what we are dealing with. Sometimes, complexity makes investors frightened due to many past experiences such as the 2008 Global crisis. I would like to simplify the complexity of the factors and valuing those in the most efficient way, throughout the decomposition, models, and approaches then applying them in the best practises where performance is easily visible for everyone. Due to its intricacy of the subject, I was stepping up in the ladder carefully, describing each component of the strategy it touches. What I mean by this, is that I started to describe from scratch like Management styles (active vs passive), The complex product of ETF, Where are this strategies produced most commonly (Index Funds), History and Fees which plays a big role at the product, People who are against these products, Decomposition of factor starting from the methods to the actual factors, and eventually, The analysis which proves the (ceteris paribus) it can outperform the actual benchmark. The results are shown in the analysis section, that Multi-Factor and Single-Factor investments can outperform the benchmark, which means that with attentive observation, careful analysis and good timing can show a good return with respect to its risk.   At the end of a valuation paper usually, a recommendation stands, stating either should Buy, Hold or Sell. I undoubtedly believe that there is no single product for everyone. Every people are unique in a sense that has different risk tolerance and understandings of risk and returns. Those who seek alpha will go for an actively managed funds, but those who trust computerized trading, steady growth, however sacrificing ‘the yield of the year’ over less risk then this paper may have something to show. “Not being able to create art, they will not understand art” The Genius of the Crowd by Charles Bukowski.

Hungarian title

Mit kínálhatnak a Smart Beta stratégiák

English title

What do Smart Beta Strategies offer


Budapest Business University


Faculty of International Management and Business


Nemzetközi Gazdaságtan Tanszék




Nemzetközi Gazdálkodás


Konzulens neve
Konzulens típusa
Assignment, Scientific qualification, Institution
Mr Czelleng Ádám

Item Type: Thesis (UNSPECIFIED)
Uncontrolled Keywords: Befektetési stratégiák, Gazdasági válság, Smart-Beta stratégia, Pénzügyi szolgáltatás, Decomposition
Depositing User: Szabó Zoltán
Date Deposited: 2019. Nov. 30. 09:47
Last Modified: 2020. May. 04. 04:20

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