FYI: The term “smart marketing” is often used when writing about smart beta and there is good reason for this.
When studying the correlation between the largest smart beta ETFs and the S&P 500, one can see there is very little discrepancy.
According to analysis conducted by FactorResearch, the smart beta ETFs measured have a correlation above 0.9 to the S&P 500, across the value, growth, dividend, low vol, momentum and quality factors.
If the products ETF providers are offering have a correlation above 0.9 to the S&P 500, it seems strange why these products charge significantly more than their market cap counterparts.
Regards,
Ted
https://www.etfstream.com/feature/8091_etf-providers-in-smart-beta-catch-22/
