Global X smart beta ETFs outperform benchmarks after one-year

May 23rd, 2016 | By | Category: ETF and Index News

All four smart beta exchange-traded funds from New York-based ETF provider Global X Funds have surpassed their market cap-weighted benchmarks one year after their initial launch. The ETFs, which provide core multi-factor (value, size, momentum and volatility) equity exposure to the US, Europe, Japan, and Asia ex-Japan through tracking EDHEC-Risk Institute’s Scientific Beta Indices, all outperformed their benchmarks on both return and risk metrics.

All four Global X Scientific Beta ETFs outperform market cap benchmarks at one-year anniversary

The range of Global X Scientific Beta ETFs provide core multi-factor equity exposure to the US, Europe, Japan, and Asia ex-Japan through tracking EDHEC-Risk Institute’s Scientific Beta Indices.

“One year in, we’re pleased to say that these academically-driven funds have made a mark, with all four outperforming their benchmarks with less volatility,” commented Jay Jacobs, Director of Research at Global X.

The four Global X Scientific Beta ETFs include the:
Global X Scientific Beta US ETF (SCIU) (Total expense ratio – 0.19%)
Global X Scientific Beta Europe ETF (SCID) (TER – 0.38%)
Global X Scientific Beta Japan ETF (SCIJ) (TER – 0.38%)
Global X Scientific Beta Asia ex-Japan ETF (SCIX) (TER – 0.38%)

Of the four geographic regions, the Global X Scientific Beta Japan fund demonstrated the most return outperformance, beating the MSCI Japan Index by over 11.2% since the fund’s inception. The Europe, Asia ex-Japan, and US funds outperformed their benchmarks by over 6%, 3.3% and 0.3% respectively.

In terms of risk, the Asia ex-Japan fund performed best with recorded volatility of over 5.8% lower than its benchmark. The Japan, Europe and US funds also recorded reduced volatility metrics that were over 2.9%, 2.0% and 1.1% lower than their respective benchmarks.

“We fully believe that multi-factor funds are the latest evolution in smart beta investing,” added Jacobs. “The rigorous research put into these strategies, combined with the low fees and increased tax efficiency associated with ETFs, represents an attractive alternative to expensive actively managed mutual funds.”

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