PT - JOURNAL ARTICLE AU - Daniel Ung TI - Practical Applications of Smart Beta Efficiency versus Investability: <em>Introducing the Cost-Adjusted Factor Efficiency Ratio</em> AID - 10.3905/pa.5.4.263 DP - 2018 Apr 30 TA - Practical Applications PG - 1--3 VI - 5 IP - 4 4099 - https://pm-research.com/content/5/4/1.9.short 4100 - https://pm-research.com/content/5/4/1.9.full AB - With the rapid proliferation of equity smart beta products that seemingly track the same risk factors, it’s increasingly difficult for investors to select those most appropriate to their needs. In Smart Beta Efficiency versus Investability: Introducing the Cost-Adjusted Factor Efficiency Ratio, author Daniel Ung (then S&amp;P Dow Jones, now State Street Global Advisors) introduces a new, practical metric: the Cost-Adjusted Factor Efficiency Ratio (Ca-FER). His work builds on previous research by Hunstad and Dekhayser [2015], which established the Factor Efficiency Ratio as a way to measure the “factor purity” of different strategies, and incorporates a vital additional element: the cost of implementation.