Active Betas refer to equity return sources arising from exposure to common stock characteristics, such as value, size, momentum, and volatility.

• Active – Returns in excess of the market or benchmark
• Beta – Common characteristics-based return; not linked to manager stock selection skill
• Active Beta – Active returns arising from common stock characteristics, as opposed to manager stock selection skill

Many research studies document that a significant portion of traditional active management returns – or alpha – arises from characteristics selection.

ActiveBeta^® Strategies offer a “beta capture” of Momentum and Value characteristics-based returns.

• Value – Investing in companies with low valuation multiples
• Momentum – Investing in companies with high past 12-month return

NEXT» Why do ActiveBeta Strategies focus on Momentum and Value?