Leadership Matters: Crafting a Smart Beta Portfolio with a Founder-CEO Twist

In recent years, considerable attention has flocked to smart beta strategies with investment managers applying reweighting schemes to peer benchmarks. In this research paper, we introduce a proxy factor for quality of management by creating and rigorously testing a founder-CEO index relative to a comparative benchmark that includes many of the same holdings. The spirit behind this selection stems from developing academic research, emerging fund managers who specialize in this expertise, and the investment logic supporting the hypothesis that If leadership does indeed matter, it would most likely occur with a founder CEO.