Smart beta ETFs. Alternatively-weighted ETFs. Indexing 2.0. Whatever you want to call this trend in exchange-traded funds, it’s attracting more investor dollars.
Overall, Morningstar slaps its “strategic beta” label on more than 340 ETFs that together have attracted more than $310 billion in assets. The entire U.S. ETF industry consists of about 1,600 products with $1.7 trillion in assets, so strategic beta has 18% of the asset pie.
If the SPY makes you feel like you’re getting a ride from a teen who’s had one too many energy drinks, then you might like SPLV. It aims to deliver a less choppy ride for risk-averse investors, as it tracks an index comprised of the 100 least-volatile S&P 500 stocks.