Smart beta is a term used in finance to describe investment strategies that combine the benefits of traditional index funds with the potential for better returns. It involves using alternative methods to select and weight the stocks in an index, rather than simply using market capitalization like traditional index funds. These alternative methods aim to capture specific factors or characteristics believed to contribute to better performance. So,
smart beta strategies try to be smarter than traditional index funds by taking advantage of certain investment factors to potentially generate higher returns.
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