Smart beta is often accused of eating active fund managers’ lunch. In June 2015, a report by analysts Cerulli Associates found institutions turning to smart beta ETFs because of dissatisfaction with active managers’ performance.

Jennifer Muzerall, senior analyst at Cerulli, said: "Smart beta is being developed as an alternative to active management, in the sense that it is rules-based, still having elements of passive, but can offer more downside risk protection because it weights by factors other than market capitalisation."