Is there such a thing as smart beta?

“Smart Beta” is a term that is cropping up more lately in professional investment management circles. It is essentially a way that professional investors tweak index funds in hopes of achieving higher returns than funds that simply mimic an index.

In April, none other than Goldman Sachs Asset Management acquired a firm that specializes in smart beta strategies called Westpeak Global Advisors. In a June 13 research report, Goldman estimated that there are now $355 billion in assets in exchange-traded investment products that employ smart beta strategies, up from $65 billion at the start of 2009.

Given the strategy’s growing influence, I thought it would be useful to explain what it is and provide my take on the concept.

Read the rest of the article on CBS Money Watch.