On February 4th, I had the good fortune to lead a lively breakfast discussion on Smart Beta, hosted by Moodys Analytics’ subsidiary Copal Amba. While most of the attendees were from the product side, i.e. asset managers, there was a growing acknowledgment that the end investors are really looking for solutions that work for them, and are getting overwhelmed by the products being sold to them.

Some key themes that emerged from the discussion:

• Smart Beta helps investors construct better portfolios that meet their objectives, at a lower cost
• Structural and behavioral biases will likely cause factor premia to persist
• Its a $12T opportunity, but good product alone is not enough to succeed
• Differentiating a fund/product is increasingly challenging and an overwhelming exercise for investors