The study, An evaluation of alternative equity indices was carried out in conjunction with consultancy Aon Hewitt and aimed to prove traditional market-cap weighted indices could never beat even randomly generated alternatively constructed portfolios.

Its study, based on monthly US share data from 1968 to 2011, found nearly all 10m ‘monkey’ indices, weighted by chance, delivered vastly superior returns to the market cap approach.

Behind the study was the premise so-called smart beta strategies could, and do, always outperform traditional index-tracking passive investment funds.

Three years later and the debate has moved on. ERI Scientific Beta’s own research, called ‘Smart Beta is not Monkey Business’, claims smart beta-style constructed indices do not just randomly beat traditional market performance, nor could a monkey generate similar performance through a random selection of stocks.

Instead, the ERI paper used test portfolios following particular methodologies for constructing indices. Far from being random, smart beta-style portfolios which were constructed with a careful assessment of investment philosophy and index design would indeed help your customers achieve their goals.

But while academics argue the toss about whether smart beta really is smart, you need practical ways to explain smart beta to your clients, and whether this is a good option for them.

This guide aims to discuss the various terms by which smart beta is known, assess whether it is complicated or expensive, highlight its transmission from the institutional to retail market, explore the advantages and talk about how you can fit these into clients’ portfolios, where suitable.

Contributors include: Cass Business School; Cerulli Associates; Eric Shirbini, global product specialist for ERI Scientific Beta; Bryon Lake, head of Invesco Powershares EMEA; Bill Vasileff, chief executive of Novia Financial; Ben Seager-Scott, director, investment strategy for Tilney Bestinvest; Dave Gedeon, vice-president and head of research and development for Nasdaq Indexes; Martin Weithofer, head of strategic beta at Deutsche Asset Management; Vivian Tung, vice-president, BBH Exchange-Traded Fund Services; and Chris Mellor, executive director, equity product management at Source.

simoney.kyriakou@ft.com