"Smart beta" and innovation in ETFs

Held on Thursday, February 16, 2017.


  • Deborah Fuhr (ETFGI)

  • Howie Li (ETF Securities)

  • Muhammed Masood (iShares)

  • Ben Seager-Scott (Tilney)

  • Professor Stephen Thomas (Cass)



Another year, another set of records for the exchange-traded funds (ETF) market.

These “baskets” of shares, bonds and commodities trade freely on exchanges – especially in the US, but increasingly in Europe – and give investors an easy and relatively cheap way to build up a diversified portfolio. Unsurprisingly, they’re proving popular.

The amount held in these baskets has more than doubled in the last five years. By the end of last year, there was $3.5 trillion invested in ETFs, with 2016 setting a new record for inflows. But not every “basket” is a simple replica of a big index like the FTSE 100.

An increasing number of products (badged variously as “smart beta”, “active ETFs”, or “factor ETFs”) attempt to offer specific strategies to investors, weighting the investments in their basket towards (presumably) desirable criteria – low volatility, high-tech exposure or whatever.

Whether these strategies are truly “smart” depends, of course, on how they are designed and used. To create lasting benefits for investors, innovative products need to behave as advertised, and investors need to use them as they are intended.

To help us learn more about this genuine area of innovation, and to discuss the benefits and risks to investors, we are delighted to welcome four experts in the area:

  • Deborah Fuhr, a partner at ETFGI, the independent research provider and consultancy. She has been studying ETFs for 17 years, first from within the industry at BlackRock, Barclays Global Investors and Morgan Stanley, and from 2012 at ETFGI.
  • Howie Li, co-head of CANVAS at ETF Securities, a product innovator and provider of investment solutions. Prior to becoming co-head of CANVAS, Howie was head of legal at ETF Securities – and, before that, he trained with Simmons & Simmons, where he advised hedge funds.
  • Muhammed Masood, vice president, product research at BlackRock iShares (the world’s largest provider of ETFs by a margin). His research focus is cross asset class, with particular emphasis on “Smart Beta” strategies.
  • Ben Seager-Scott, director of investment strategy and research at Tilney. He was previously a senior researcher at both Bestinvest and Whitechurch Securities. Ben specialises in passive investment vehicles and is a frequent commentator on the sector.
  • Stephen Thomas, Professor of Finance at Cass Business School. Stephen is a member of the editorial board of the Journal of Business Finance and Accounting and of the CFA’s Examinations Committee, and a convener of the annual Smart Beta Europe Conference.

If you would like to join us, and share your own thoughts, please let us know by calling 0207 621 1056 or by emailing alex@csfi.org. As usual, wine and sandwiches will be provided.