-------------are also Index Funds but follow different strategy while investing in Index whose performance it seeks to track. 2 pointsa) Passive fundsb) Active fundsc) Balanced fundsd) Smart Beta Funds
Question
-------------are also Index Funds but follow different strategy while investing in Index whose performance it seeks to track. 2 pointsa) Passive fundsb) Active fundsc) Balanced fundsd) Smart Beta Funds
Solution
d) Smart Beta Funds
Smart Beta Funds are also Index Funds but they follow a different strategy while investing in an Index whose performance they seek to track. Unlike passive funds that replicate the performance of a benchmark index, Smart Beta Funds use alternative index construction rules based on factors such as size, value, and volatility. This strategy is designed to add value by strategically choosing, weighting and rebalancing the companies built into the index based on objective factors.
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