Moreover, investors should be aware of specific ETF indexing strategies. For instance, index-based momentum ETFs were also pressured in the recent sell-off. The PowerShares DWA Technology Momentum Portfolio (NYSEArca: PTF), which includes a 92.1% weight in tech stocks, fell almost 8% in the first 11 days of April.
“Indexed investing doesn’t try to beat the market, but rather seeks to get the most out of what the market offers,” Prestbo said in the article. “As Vanguard Group founder John Bogle has put it innumerable times, classic index investing consists of (1) the broadest possible diversification, sustained over (2) the longest possible time horizon at (3) the lowest possible cost, thereby assuring (4) the highest possible share of investment returns.”
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.