Russell Investments Investment Strategist David Koenig and Managing Director Ken O’Keeffe joined ETF Trends Publisher Tom Lydon at the Morningstar ETF conference in Chicago to discuss 2014 trends in exchange traded funds flows and the increased popularity of factor-based indexing.
O’Keeffe notes that this year, there has been increased usage of value and growth ETFs this year, but advisors and investors have also boosted allocations to smart beta strategies, including dividend and equal-weight ETFs.
Koenig points out that institutional investors, particularly those with $1 billion or more in assets under management, are embracing smart beta ETFs and looking to increase exposure to such funds.
Of institutional investors surveyed by Russell with more than $100 billion in assets, 88% “have evaluated smart beta or plan to do so in the next 18 months; 77% of respondents with assets between $1 billion and $10 billion, and 50% of those with assets under $1 billion responded similarly,” said Russell in a survey entitled Smart Beta: A Deeper Look at Asset Owner Perceptions released earlier this year.
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