|Strategy||Cluster||Example Fund||Strategy AUM ($)
as of 5/15/2014
|Currency Hedged Fundamental||Bottom-up||DXJ||12,020,119,001|
|Currency Hedged Dividends||Bottom-up||DXJS||73,910,070|
"Smart-beta" seekers will appreciate the elegance of the strategic group. It includes all asset classes. Its focus on security-level economic relevance allows established approaches like value or dividend investing to share the tent with newer methods like low volatility and commodity tenor optimization. It makes nonvanilla selection and/or weighting a necessary, but not sufficient, condition for inclusion.
Nor is it outcome-sensitive. It requires neither risk-adjusted outperformance nor a specific level of factor exposure. Instead, it focuses on construction methodologies. Performance and future factor exposure cannot be analyzed ex-ante, but construction methodology can.
For those who prefer the term "quasi-active," the strategic group's requirement of research-based portfolio formation links the practices of many active managers to passive, rules-based strategies.
Moreover, you can parse the strategic group however you like.
If you only want newfangled strategies, because value and growth are too established to seem "smart" to you, just cut out the dividends, buy-writes, fundamentals, value and growth funds, and you'll have a really cutting-edge list: