Smart beta strategies are captivating more investors than ever before

Schwab asked 1,500 ETF investors about their attitudes and expected behavior when it comes to smart beta investing.

Source: Focus on Smart Beta--2018 ETF Investor Study, Charles Schwab & Co., Inc., 2018.

Smart beta perception

Investors increasingly see smart beta ETFs as a valuable tool for reaching investment goals:

  • 29% in 2016

  • 36% in 2017

  • 52% in 2018

And in 2018, the younger the ETF investor, the more likely they were to see smart beta ETFs as a valuable tool:

  • 63%

    Millennials

  • 57%

    Gen X

  • 40%

    Boomers

  • 27%

    Matures

Smart beta adoption

Investor adoption of smart beta strategies has significantly accelerated in the last three years:

  • 12% in 2016

  • 29% in 2017

  • 41% in 2018

Among ETF investors, Millennials more than any other generation are now invested in smart beta strategies:

  • 67%

    Millennials

  • 49%

    Gen X

  • 13%

    Boomers

  • 14%

    Matures

Market volatility

ETF investors say they are more interested in exploring smart beta ETFs during periods of market volatility, especially younger generations:

  • 92%

    Millennials

  • 81%

    Gen X

  • 53%

    Boomers

  • 33%

    Matures

Smart beta and investor decisions

Among ETF investors who say they currently invest in smart beta strategies:

  • 75% have swapped active exposures for smart beta exposures in the last three years.

  • 54% view smart beta ETFs as a complement to market-cap-weight ETFs.

  • 68% plan to increase smart beta investments in the next year.

  • 34% invest in Fundamental Index® strategies.

Celebrating a fundamentally different approach to investing

5 years - Schwab Fundamental Index ETFs

Investors have embraced the six Schwab Fundamental Index ETFs since their launch in August 2013:

  • $17B+ in Fundamental Index ETF AUM1
  • Ranked #4 in strategic beta inflows YTD2

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1. Data as of 9/30/2018. Source: Charles Schwab Investment Management, Inc.

2. Data as of 9/30/2018. Source: Strategic Insight Simfund®, using Morningstar’s strategic beta classifications 6/30/2018.