PowerShares Smart Beta Research Center

Understanding Smart Beta

Smart beta represents an alternative to traditional indexes that may outperform a benchmark, mitigate risk, or both. While smart beta indexes are still transparent and rules based, they offer investors exposure to alternative sources of return and may help diversify portfolios.

There are numerous methodologies in the smart beta universe, so it is important for investors to understand the differences. This site seeks to educate advisors on the various types of exposure that can be found in smart beta strategies and how they can be best implemented in a portfolio. View strategies View strategies

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General risk information

There are risks involved with investing in ETFs, including possible loss of money. Index-based ETFs are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Underlying Index. There is no assurance that the strategies or funds listed in this material will achieve their investment objectives. Investments focused in a particular industry are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.

The information on this page is provided for informational purposes only and is not to be construed as investment advice or a recommendation of a particular strategy or product. All strategies discussed must be implemented by a financial advisor. Asset allocation/diversification do not eliminate the risk of loss.

Beta is a measure of risk representing how a security is expected to respond to general market movements. Smart beta represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, or both. Smart beta funds may underperform cap-weighted benchmarks and increase portfolio risk.