Smart beta also includes low volatility ETFs, which are among the most popular intelligent index products on the market today. Astor’s strategy also includes the iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV), the second-largest low volatility ETF and the iShares High Dividend ETF (NYSEArca: HDV), both of which are also rated overweight by S&P Capital IQ. HDV allocates a combined 46% of its weight to consumer health care stocks and has a trailing 12-month yield of 3.2%. [Another Look at Volatility ETFs]
ETF strategists are also using smart beta ETFs to make sector bets. Well-known smart beta sector ETFs include the First Trust Technology AlphaDEX Fund (NYSEArca: FXL). The $852.2 million FXL, like the other AlphaDEX ETFs, combines growth and value factors rather than relying on market value.
With a median market value of $8.46 billion, it is clear that FXL is not overly dependent on small-caps to generate returns, a frequent critique of smart beta strategies. Rated marketweight by S&P Capital IQ, FXL is up almost 36% in the past year.
Guggenheim S&P Equal Weight ETF
Tom Lydon’s clients own shares of RSP.