Smart Beta: Canada Leading the Way

Survey shows Canadian institutions well ahead of global peers.

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story_images_Canada-flagCanadian institutions are all over the smart beta concept according to a new survey from Russell Investments. Over 95% of them think smart beta is a good fit from a strategic standpoint versus just 70% among non-Canadian responders. Moreover, nearly a third of Canadian pension plans are evaluating smart beta strategies compared to just 11% of plans outside Canada.

With Canadian plans leading the way in embracing smart beta approaches, the biggest ones are doing most of the work: 80% of those surveyed have assets over $1 billion and 20% have assets above $10 billion. The survey also found that 32% of Canadian respondents currently have smart beta allocations and of those 53% plan to increase that allocation. For those who say they are currently evaluating smart beta 76% plan to take the leap and make an allocation.

A few further trends around use highlighted in the research include:

  • Over 60% say they are looking to smart beta strategies for risk reduction and return enhancement;
  • Only 15% are using them for cost savings;
  • Low volatility and fundamentally weighted index strategies dominate among Canadian respondents: all Canadian users of smart beta indexes are using low volatility strategies.
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