Smart Beta Basics

What is smart beta? Sara Shores provides the basics and shares the potential benefits as part of an overall investment strategy.

Chances are you’ve seen the headlines about “smart beta.” It’s become one of the most ubiquitous themes in the investment industry. But what exactly is smart beta, and what can it do for you as an investor?

Over the last decade, investors far and wide have increasingly embraced the benefits of passive investing — strategies that seek to replicate a benchmark as closely as possible — as a way to efficiently access market returns at a lower cost. But while our minds might appreciate the transparency and consistency of a passive approach, our hearts are often more than the benchmark return: We all want to be above average! Enter smart beta.

What are your questions about smart beta? Ask them here.


Sara Shores is Global Head of Smart Beta for BlackRock.

The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective. Past performance does not guarantee future results.©2014 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries. All other marks are the property of their respective owners.