BNP Paribas Easy’s smart beta ETFs
Smart beta strategies have expanded rapidly in recent years in equities and are also gaining ground in other asset classes such as bonds and commodities. This is no fad, but rather a new investment approach.
Smart Beta ETF
A diversified offering based on a systematic investment process embedded in a transparent index methodology.
The term ‘smart beta’ refers to indices for which the selection process and the weighting of individual securities may be based on specific criteria (valuation, volatility, dividends…) which set them apart from traditional market cap indices for instance.
The BNP Paribas Smart Beta ETF range is divided into two categories:
• Factor investing by BNP Paribas
• Other smart-beta strategies.
Factor investing by BNP Paribas
This includes ETFs replicating indices that are following a factor approach based on academic research and on the expertise of the financial engineering teams of BNP Paribas.
These indices seek to identify real and recurring sources of performance and transform them into easily exploitable investment factors.
The four factors selected for these strategies are:
• low volatility
These indices are calculated and published by Solactive AG.
Other Smart-beta strategies
This comprises smart-beta ETFs replicating indices that are based either on specific themes such as dividends or have been developed with external BNP Paribas partners.
Exploit the low volatility anomaly (i.e. the trend of the least volatile securities to outperform over a long period of time on a risk-adjusted basis).
Use valuation data as investment criteria to acquire an asset at a moderate price.
Overweight stocks with profitable business models and good financial health.
Overweight stocks that have outperformed recently and which returns have demonstrated strong momentum over the preceding year and which are expected to continue the same pattern.
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Investments in the aforementioned fund are subject to market fluctuation and risks inherent in investing in securities. The value of investments and the revenue they generate can increase or decrease and it is possible that investors will not recover their initial investment. Source: BNP Paribas Asset Management Holding.