https://money.usnews.com/investing/funds/slideshows/7-smart-beta-funds-to-beat-the-market?src=usn_invested_nlFeb. 8, 2019
Investing in passively managed index funds is a path to market-matching returns. With annualized returns of roughly 9 percent for stock funds and 5 percent for bond funds, most investors do quite well with this investment approach.
But there are ways you can do even better. Smart beta funds are exchange-traded funds that veer from the traditional market capitalization-weighted indexes holding securities in proportion to their weight. Smart indexes follow an index but attempt to beat their returns by tweaking the investment holdings in a variety of ways.
Here are seven ways you can try to beat the market.
1. SerenityShares Impact ETF (ticker: ICAN). Scott Sacknoff, CEO at SerenityShares Investments in the District of Columbia, suggests ICAN. This fund offers a “dividend-paying basket of stocks diversified across economic sectors and impact activities. The fund considers societal and environmental challenges,” Sacknoff says.
With 20 themes that include demographic and societal trends like elder care, recycling and renewable energy, there’s broad attention to faith-based funds and companies that make a difference. The fund has an expense ratio of 0.5 percent, or $50 per $10,000 invested annually.
2. VictoryShares US 500 Enhanced Volatility Wtd Index ETF (CFO). Mannik S. Dhillon, president at VictoryShares and Solutions in Cleveland, says market cap-weighted indexes are too concentrated in a small number of stocks and sectors and that creates a false sense of diversification.
His solution is the CFO, which tracks an index of the largest U.S. stocks by market cap, and then screens the stocks for positive earnings and weights holdings by volatility. CFO has an expense ratio of 0.35 percent. – Barbara Friedberg
