Written on 13 May 2015.
Global X Funds, the New York-based provider of exchange-traded funds (ETFs) offering access to investment opportunities across global markets, has launched a family of four ETFs based on Scientific Beta indices:
These ETFs, which track multi-factor indices developed by ERI Scientific Beta, provide core equity exposure to the US, Europe, Asia ex-Japan, and Japan.
Representing the next generation of smart beta indexing, the ETFs capture four factors simultaneously: Value, Size, Momentum and Low Volatility. While each individual factor has historically outperformed the market in the long term, the Scientific Beta strategy seeks to smooth the cyclicality of their returns and deliver more consistent outperformance by combining the factors together. Furthermore, by combining five unique weighting schemes, the ETFs seek to maximise diversification and minimise inadvertent factor tilts.
For Bruno del Ama, CEO of Global X Funds, "ERI Scientific Beta's methodology has been developed over years of thorough academic research, but so far its use has been mostly limited to institutional investors. We are excited to bring this premier smart beta strategy to a broader audience through the ETF structure."