ActiveBeta Portfolios seek to provide a characteristic-weighted capture of Momentum and Value returns. These portfolios are constructed using an innovative, patent-pending technique designed to:

• Provide a high-efficiency capture of Momentum and Value returns by maximizing the transfer of information contained in a signal into the active portfolio,
• Limit stock-specific risk by taking a very large number of small active positions in individual stocks in order to provide a pure capture of Momentum and Value returns, and
• Deliver customizable solutions to meet specific client needs. For example, ActiveBeta Portfolios can be created based on any market index or universe specified by the client. The capture of Momentum and Value returns can also be provided at a targeted level of tracking error relative to the market index, but without the use of an optimizer, preserving the complete transparency of the process.

Custom Indices

To facilitate easy and cost-effective implementation, the ActiveBeta Portfolios can be constructed and provided in the form of a “custom” index, which asset owners can implement either internally or through an external manager of their choice.

The ActiveBeta Portfolios are highly diversified, yet they deliver superior risk-adjusted performance potential relative to:

• The underlying market indices,
• The market capitalization-weighted FTSE ActiveBeta Indices, and
• Active managers.