Sector & Thematic Strategy Briefing - Wednesday 29th March 2023 - The Berkeley, London Please join us for our annual sector and thematic investing event, featuring DWS Xtrackers, First Trust, MSCI, Redburn and Sprott Asset Management. Please register now if you would like to attend.

Over 30% of institutional investors who do not currently use smart beta expect to adopt such strategies within two years, according to a recent survey conducted by Source, a European provider of exchange-traded funds.

Dr. Chris Mellor, Executive Director, Equity Product Management at Source.

Following interviews with 49 institutional investors on their attitudes towards smart beta investing, Source found that 27% of respondents currently invest in one or more smart beta strategies, and, of those that don’t, 31% anticipate they will over the next two years.

Some 64% of institutional investors believe assets in smart beta funds will grow between now and 2019 (only 4% think it will decline, with the remainder undecided), and 34% anticipate assets under management in these strategies will increase by 30% or more.

Dividend-weighted strategies are predicted to be a major driver of this growth with 28% of respondents believing investors will increasingly focus on smart beta strategies to enhance the dividends they receive.

Between now and 2019, 57% of institutional investors anticipate that a growing number of ETFs using smart beta strategies will be launched. That being said, many argue that the term smart beta is being misused, and 26% of respondents expect tighter rules to be introduced around what constitutes the term.

Dr. Chris Mellor, Executive Director, Equity Product Management at Source, commented: “Smart beta is going to play a growing role in helping investors find quality stocks that pay an attractive dividend.”