Traditionally, investors could capture beta performance by simply investing in such passive strategies as index funds or index futures or ETF’s, such as Satrix. The advantage is the cost should theoretically be substantially lower than investors would have to pay active portfolio managers or unit trusts. As such, a number of proponents of the “Cost matters hypothesis” – investors who argued that simply controlling the cost of your investment over a long term might actually add more value than chasing active outperformance – say beta is most decidedly a better long-term strategy than trying to chase returns. However, over time, beta has evolved beyond those broad market betas to encompass style betas, strategy betas, dynamic betas, etc, as investors seek to replicate active investment strategies at lower costs through such so-called “smart betas”. Effectively, those are passively managed strategies that try to replicate the essence of active manager performance. What has basically emerged is a wide
