From the course: Excel for Investment Professionals
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Reviewing smart beta - Microsoft Excel Tutorial
From the course: Excel for Investment Professionals
Reviewing smart beta
- [Instructor] There's a new trend in asset management called smart beta or factor investing, and it's on the radar of every major financial asset manager on the planet, from BlackRock and Vanguard to Prudential, Eaton Vance, RAFI, and a variety of others. This trend is called smart beta or factor investing and it's built around what are called factor models, models that came out of academic research in the 1990s and early 2000s. This model is critical for anyone looking to be involved in the industry. Now, when we think about your expected returns on your portfolio, the reality is your returns mostly come down to asset allocation. That is the mix you have of stocks versus bonds. But asset allocation isn't the only thing that matters. Stock characteristics matter, too. In fact, your expected returns are largely driven by these stock characteristics, at least on the equity side of your portfolio. Now, as you might expect, when we're trying to understand what the expected returns are on…
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