Morningstar's John Rekenthaler has jumped into the debate on smart beta, and whether they really are as brainy as professed. First off, Rekenthaler critiques the recent Michael Edesess article accusing DFA of having fallen into scientism. He disagrees with the charges against DFA in particular, but he does express agreement with Edesess' point about the investment category in general: to whit that "many of today's so-called smart betas--defined here as alternative weighting schemes for market indexes--lack economic motivation. That is, researchers can examine historic security prices and determine that certain attributes are associated with better performance." 

Edited by: Tommy Fernandez


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