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Betashares FTSE RAFI US 1000 ETF

Fund Manager: BetaShares
Inception Date: Dec 01, 2014

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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