FYI: Smart-beta ETFs come in various flavors, with more risk-off dividends, low volatility and value on one end of the spectrum, and risk-on approaches such as momentum and small size on the other.
Unlike market-cap-weighted ETFs that hold stocks based on their valuation, with Apple (AAPL) and Amazon.com (AMZN) disproportionately driving returns, smart-beta ETFs are more narrowly constructed based on fundamental or sentiment characteristics.
Furthermore, they are, like all index-based funds, rebalanced and reconstituted based on well-defined rules throughout the year. As such, they can appear more like transparent, lower-cost versions of active mutual funds.
Regards,
Ted
https://www.etf.com/sections/blog/getting-smarter-about-smart-beta-etfs
