FTSE Russell, which recently combined via London Stock Exchange Group’s 2014 acquisitions of Russell Investments, are the index providers for some of the largest and most well-known smart beta ETFs listed in the U.S. For example, the $4.6 billion PowerShares FTSE RAFI US 1000 Portfolio (NYSEArca: PRF), one of the largest and oldest smart-beta ETFs, tracks the FTSE RAFI US 1000 Index. [Smart Beta ETFs Mean Trouble for Active Managers]
Russell has provided some of the most popular asset style indices that are arguably the prototypes to smart-beta indexing as we know it today. For instance, Russell Index ETFs include the $6 billion iShares Russell Midcap Value ETF (NYSEArca: IWS) and the PowerShares Russell 1000 Equal Weight Portfolio (NYSEArca: EQAL), one of the fastest growing ETFs to come to market in 2014.
Among factors emphasized by smart beta funds, low volatility and value were the most popular among the professional investors surveyed by FTSE Russell. Importantly, investors plan to hold smart beta ETFs for the long term.
“The majority (71%) of asset owners anticipate holding smart beta indexes for five years or longer to achieve their investment objectives and a third of asset owners are using or evaluating smart beta for tactical applications,” according to FTSE Russell. [Business is Booming for Smart Beta ETFs]
There are 350 U.S.-listed enhanced index-based ETFs with an average 0.56% expense ratio, according to XTF data.
Table Courtesy: FTSE Russell