Welcome to the Financial Times Lexicon

Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.

 

Term of the day

smart beta

Some investors are moving away from traditional market capitalisation-based indices to alternative strategies, known as smart beta, in search of better returns and lower costs amid volatile markets and an uncertain economic climate. 

Smart beta is a rather elusive term in modern finance. It lacks a strict definition and is also sometimes known as advanced beta, alternative beta or strategy indices.

It can be understood as an umbrella term for rules based investment strategies that do not use the...