As investors become familiar with traditional market-cap weighted strategies and dive deeper into the exchange traded fund world, more are warming up to the idea of factor-based, smart-beta, fundamental indexing styles.
ETF Trends’ Tom Lydon sat down with Jonathan Wills, RIA Sales Director for Invesco PowerShares, at the TD Ameritrade 2014 National Conference to discuss the differences between smart-beta and traditional beta-indexing ETFs.
“It’s really an alternative weighting strategy,” Wills said. “Very similar make up to a lot of the broad indexes that you are familiar with but looking at factors, instead of market-cap weighted – factors like sales, cash flow, book value and dividend, and using those factors to determine the economic footprint of a company.”
Invesco PowerShares offers a suite of fundamental ETFs based on Research Affiliates indices.
Watch the video below to see the full interview with Jonathan Wills.
To view past video interviews, visit our video section.