The smart beta advantage

Smart beta investment strategies are one of the most powerful trends in investing with assets under managementnow topping $500 billion.

Smart beta ETFs are carefully constructed indexes that rank stocks by traits other than their market value, the standard methodology employed by traditional benchmarks, such as the Standard & Poor’s 500.

Similarly, the Covestor Smart Beta portfolios are calibrated for specific stock features and performance metrics designed to deliver a better risk and return trade-off.  The Covestor Smart Beta portfolios are not ETFs but portfolios made up of individual stocks holdings.  

 

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Low Fees

Here are some reasons to take a look at Covestor Smart Beta portfolios:

Low Cost: With an 8 basis point management fee, Covestor Smart Beta portfolios are competitive with existing products in the marketplace.

Low Minimums: These portfolios have low investment minimums of just $5,000 through use of fractional shares.

Factor Tilts: These portfolios are designed for exposure to desirable stock characteristics, or factors, such as robust growth, valuation, quality, and dividends that have been back tested. These portfolios are also well diversified across sectors.

Rules-Based: The Covestor Smart Beta portfolios have filters to screen out undesirable stocks and a repeatable rules-based framework to determine position allocations.

Auto-Rebalancing: These portfolios are rebalanced quarterly, and stocks sold are replaced by new ones with more attractive characteristics.

Transparency: Investors have immediate, online access to information on holdings, trades and performance of these portfolios.

 

Takeaway

When designed carefully, smart beta products can give your investment portfolio a possible performance edge at a reasonable cost.

Yet, investors should read the fine print and understand the underlying strategy and risk of any alternative index product.

Do the upfront research. It pays to be smart about smart beta.

 

Interested in finding out more? You can learn more about Covestor, or try our services with a free trial account. Or check out this informative video.

 

Photo Credit: Pictures of Money via Flickr Creative Commons

Disclaimer: Covestor Smart Beta Portfolios are not Exchange-Traded Funds or mutual funds but are portfolios made up of individual stock holdings. These portfolios mainly invest in stocks and may not be suitable for all investors. You may lose all or part of investments in these portfolios, and their past performance is no guarantee of future results. You may find additional information on the risks, conflicts of interest, applicable brokerage commissions, fractional shares, and limitations on investments and divestments associated with these portfolios (along with Covestor’s full disclosures) on the Forms and Agreements page at covestor.com. Covestor Ltd. is an investment advisor registered with the Securities and Exchange Commission (“SEC”). Registration does not imply a certain level of skill or training. Brokerage services are provided to Covestor clients by Interactive Brokers LLC, an SEC-registered broker-dealer and member NYSE/FINRA/SIPC and a Covestor affiliate.