PT - JOURNAL ARTICLE AU - Edward Qian AU - Nicholas F. Alonso AU - Mark A. Barnes ED - Goyal, Gauri TI - Practical Applications of The Triumph of Mediocrity: <em>A Case Study of Naïve Beta</em> AID - 10.3905/pa.2015.3.sb.137 DP - 2015 Dec 31 TA - Practical Applications PG - 1--5 VI - 3 IP - SB 4099 - https://pm-research.com/content/3/SB/1.10.short 4100 - https://pm-research.com/content/3/SB/1.10.full AB - The Triumph of Mediocrity: A Case Study of Naïve Beta Edward Qian Nicholas F Alonso Mark A Barnes Overview Investors who still believe that a bold market cap-weighted portfolio always beats the less sexy quantitative approach to passive, diversified investing may be surprised by the results of new research showing that diversification-based beta, or “naïve beta,” outperforms the S&amp;P 500 Index .Authors Edward Qian , Nicholas Alonso and Mark Barnes (Director), all of PanAgora Asset Management , examine four types of naïve beta—equally weighted, minimum variance, maximum diversification and risk parity—and find that the risk-parity portfolio offers the best diversification and the lowest turnover.“We’d like to remind people that in investing, ‘smart’ doesn’t always mean ‘good performance’, and ‘naïve’ can be a winning strategy,” says co-author Edward Qian.