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BetaShares FTSE RAFI Australia 200 ETF

Fund Manager: BetaShares
Inception Date: Jul 01, 2013

Fundamental indexing outperforms market cap

Money Management - Aug 07, 2017

Banking on the fundamentals rather than the market capitalisation has seen strong results for BetaShares FTSE RAFI Australia 200 exchange traded fund (ETF) which returned 19.68 per cent for the one year to 30 June 2017. The ETF, with the ticker QOZ, has come in at second place for the top five index Australian equities broad cap funds, according to FE Analytics data. The fund overweights relative to market cap index stocks that are cheap and underweights stocks that are expensive. BetaShares managing director, Alex Vynokur, said this produced historically persistent outperformance as the stocks’ mis-valuations were corrected over time. “If you look at the performance of QOZ it’s produced fairly impressive performance, outperforming the market cap weighted index. The rotation out of the high price defensive income stocks in the Australian equity market in recent months and at the same time the rotation toward sectors that offer relatively better value,” he said. [More]

We first took a look at the ETFs which had the highest inflows for the financial year this time last year. With the end of financial year long behind us, it’s time to take another look and see if there were any changes from last year. One of the unique attributes of Exchange Traded Funds (ETFs) and one which they share with managed funds, is their ability to create new units. This means that theoretically there is no limit to the size that an ETF can get to. Below we have a look at whic ... [More]

Is ‘smart beta’ really smarter than ETF?

The Australian - Nov 08, 2016

In the ever-changing universe of listed financial securities, issuers are continually striving to launch better, more sophisticated products that offer investors the potential to outperform the market. Australia’s offering of exchange-traded fund products is no different, with a growing number of products now available on the stock exchange that are adding flavour to the blander, so-called “plain vanilla” ETF securities that simply aim to achieve “beta” (the market return) by buying all the stocks within a market index. Plain vanilla ETFs weight their holdings according to the market capitalisation of the companies within an index, which often means they are overweight in the bigger stocks that are more expensive and underweight in smaller ones that are less popular and generally underpriced. Such ETFs, after taking into account their entry costs and fees, have tended to underperform. Which is why more and more ETFs, including those listed on the Australian Securities Exchange, are employing investment strat­egies that the technical financial boffins and asset managers describe as “smart beta”. [More]

Getting smart about beta

ETF Watch - Dec 10, 2015

Most market indexes are based purely on weightings by market capitalisation.  This means larger funds by market cap make up a higher weighting of the index. Most ETFs follow these market cap indexes.  A search of the ETF Watch fund database shows by Management type: “Index Tracking” shows 90 of 128 ETFs on the ASX follow this approach. There are some potential shortcomings of market weighted indexes, including: The investor is buying more of overvalued companies and l ... [More]

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