New York (HedgeCo.net) – Smart beta funds are growing rapidly and the growth is coming in three areas- the number of funds offered, the assets under management and the number of financial advisors using them.

According to a recent report from Morningstar, the number of funds grew from 673 to 844 funds they categorize as strategic beta. The assets invested in these funds grew from $396 billion to $497 billion over the last 12 months which is also the timeframe of the growth in the number of funds.

“The strategic beta landscape is growing faster than both the broader exchange-traded products market as well as the global asset management industry, driven by new inflows, new product launches and the entrance of new providers during the past year,” said Ben Johnson, Morningstar’s director of global ETF research.

The report cited growth in usage from investment advisors as one of the items fueling the growth, stating that 68% of advisors that use ETFs products are integrating smart beta products in the portfolio construction of clients.

Rick Pendergraft
Research Analyst
HedgeCoVest