Smart Beta is a type of investment strategy that seeks to provide a return that is different from the traditional market capitalization-weighted indices, such as the S&P 500. It uses a rules-based approach to select and weight securities in a portfolio, typically using factors such as value, momentum, quality or size, rather than market capitalization. The idea behind smart beta is to capture the excess return, or "beta," of a specific market segment that is believed to be more efficient or less risky than the broader market.Smart beta strategies can be applied to a variety of asset classes, including stocks, bonds, and commodities. They can be actively managed or passive, depending on the investment strategy. Smart beta strategies can be used as an alternative to traditional index funds or actively managed funds, and can be used to complement or enhance a portfolio's overall returns.It is important to note that, like any investment strategy, smart beta has its own set of risk and return characteristics and it's important to understand the underlying investment strategy and the potential risk involved before investing.
