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The low volatility factor provides a mechanism for investors to control risk while generating similar returns to the market.

Some smart beta providers are targeting alternative factors amid the rapid growth in the number of products available in the market.

Including a tolerance threshold can improve information ratios with only a marginal increase in volatility. A study by Quantilia

Adding a maximum weight limit to an ERC portfolio does not affect its information ratio, but lower weight caps are associated with higher return and volatility.

A report by Quantilia found that large window sizes deliver the best mean rolling information ratios for portfolios.

A study on how transaction costs affect information ratio under different weight by Quantilia

One advantage of factor-based smart beta indices is that they are regularly rebalanced. This can lead to optimal returns without unnecessary fees.

Fixed-income indices have gained in popularity, boosted in part by the growth of the smart beta market. They are used as non-investable benchmarks.

A selection of assessment tools to analyse the efficiency of risk premia indices, keeping in mind that they generally have no real benchmarks.

As there are no standards in the market regarding risk premia and smart beta strategy types, there are different names for the same thing. This is an overview.

Read here about how to build a risk premia portfolio and what factors to take into account. Such portfolios are good alternative for risk prone investors.