Indexing has been the backbone behind the exchange traded fund business, and as the industry evolves, new indices have popped up to accommodate ETFs that mimic active strategies.

ETF Trends’ Tom Lydon met with Jonathan Horton, President of FTSE North America, to discuss new trends developing between indexing and ETF products.

“For us, some of the big trends that we’ve seen this year [include]continuing move toward yield-based solutions in both fixed-income and in equities space,” Horton said. “Also, a move in this area which some people call ‘intelligent beta’ or ‘smart beta’ or ‘alternative beta.'”

The market was founded on cap-weighted methodologies, and now managers are crafting specialized ETFs that track intelligent, smart-beta indices that follow their own set of allocating rules, similar to actively managed strategies.

“For advisors, the way to think about this is you have passive on one side, you have active on the other… and you have this middle ground,” Horton added.

Watch the video below to see the full interview with Jonathan Horton.

To view past video interviews, visit our videos section.