What is Smart Beta?

What is Smart Beta?
Any ETF that follows a non- traditional market cap index in an effort to produce superior risk adjusted returns.
Smart Cost of Smart Beta
At Toroso We have developed a proprietary software to evaluate the cost of Smart Beta in a fast, efficient way. It is a Four Step Process that you can learn here, in our ETF Prism Report.

STEP I
Set a Benchmark
With a high correlation.
STEP II
Determine the Overlap
Make sure you are producing something that is different to give you the possibility to outperform.
STEP III
Calculate the difference
Apply the difference in active share to the difference in expense ratio.
STEP IV
Compare and Contrast
Smart cost should be equal or less than the expense ratio.

 

 

 

Disclaimer

This presentation has been prepared solely for the intended recipient and contains highly confidential and proprietary information that are of independent, economic value to Tidal Growth Consultants (“TGC”). By viewing this presentation, you agree not to alter the contents of this presentation in any manner prior to re-distribution without the prior written consent of TGC. This presentation does not constitute investment advice and the fact that a security may be mentioned in this presentation does not mean it is recommended or is a suitable investment for any recipient or to be recommended by any recipient of this presentation.

Different types of investments involve varying degrees of risk.  Registered investment advisers, financial advisers, family offices and registered representatives should be aware that by using TGC’s services, the investment return and principal value of securities they may recommend to client will fluctuate based on a variety of factors, including, but not limited to, the type of investment, the amount and timing of the investment, changing market conditions, currency exchange rates, stability of financial and other markets, and diversification.  There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment.  No investment strategy can guarantee profit or protection against loss in periods of declining values.  No assurance can be given that capital market assumptions will prove to be correct, and the difference between assumptions and actual conditions could vary materially.  

When a financial planning representative recommends exchange-traded funds (“ETF’s”) and other investment companies, they should disclose that such funds will indirectly bear its proportionate share of any fees and expenses payable directly by the underlying ETF’s or other investment company. Therefore, that portfolio will incur higher expenses. In addition, ETF’s are also subject to the following risks (i) the market price of an ETF’s shares may trade above or below its net asset value; (ii) an active trading market for an ETF’s shares may not develop or be maintained; (iii) trading of an ETF’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are de-listed from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally; or (iv) the ETF’s may fail to achieve close correlation with the index that it tracks due to a variety of factors, such as rounding of prices and changes to the index and/or regulatory policies, resulting in the deviating of the ETF’ s returns from that of the index.

Financial Planning representatives should disclose to clients and prospects, as TGC is disclosing herein, that past performance is no guarantee of future results and every investment may lose money. No guarantees or assurances are or can be made as to performance of any investment.

Registered investment advisers, financial advisers family offices and registered representatives should consider the investment objectives, risks, charges and expenses of an investment strategy before using TGC’s services and prior to recommending any such investment strategies to its clients and/or prospects.  A prospectus and/or other applicable offering documents contain this and other important information about the investment strategy.  Investors should read the prospectus and/or other applicable offering documents carefully before investing. 

Certain of the economic and market information contained in this presentation has been obtained from published sources and/or prepared by third parties. While such sources are believed to be reliable, neither TGC nor its respective affiliates, employees and representatives assume any responsibility for the accuracy of such information.