From a market perspective, globally, multi-factor strategies are currently the most widely used, with approximately 71% of institutional investors adopting them, followed by low volatility, value, quality, equal weight, and fundamental strategies.

Key Factors in Selecting a Smart Beta Index

When choosing a Smart Beta strategy index, investors should consider the following factors:

1. Risk Appetite
   Investors with different risk preferences are suited to different Smart Beta strategies. For example, investors with relatively low risk tolerance may opt for dividend or low-volatility indices, while those with higher risk appetite may choose growth or high-beta strategies.

2. Market Style
   Investors should select an appropriate Smart Beta strategy based on their assessment of current and future market trends. For instance, if the market is expected to favor growth, a growth factor strategy may be suitable; if the market is anticipated to shift toward value or experience higher volatility, a value factor or low-volatility strategy could be more appropriate.

3. Risk Exposure
   The positioning and style of a Smart Beta strategy index should be clear and consistent. For example, a strategy targeting growth should maintain consistent exposure to growth factors and avoid significant style drift.

4. Transparency of Rules
   When selecting a Smart Beta strategy index, the replicability of the strategy is a critical criterion. This means the construction rules of the Smart Beta strategy should be open and transparent.