Volkswagen scandal hits smart beta benchmarks, Edhec

Diversification of the specific risk of factor indices over the short term can lead to much better risk-adjusted performance than the traditional approaches to constructing smart beta indices, according to the Edhec-Risk Institute. In the short term, diversification of the risks of factor indices has enabled investors to cope with the consequences of risks that affected a stock or a sector, according to The Limitations of Factor Investing: Impact of the Volkswagen Scandal on Concentrated versus