Invesco PowerShares Managing Director Dan Draper and Vice President of ETF Product Management John Feyerer joined ETF Trends publisher Tom Lydon at the Morningstar Investment Conference in Chicago to discuss the growth of smart beta exchange traded funds.

Draper and Feyerer the results of its second annual study titled The Evolution of Smart Beta ETFs, conducted in conjunction with Market Strategies International (MSI). [Smart Beta ETFs Keep Gaining Traction]

Feyerer notes that depth and breadth of adoption of smart beta are moving the ETFs forward. Institutional investors are also paying close attention to index methodology.

“The other element I’d really focus in on is the degree to which investors are looking at the importance of the underlying index methodology,” he said. “When you look at traditional ETFs, fees and liquidity are important to institutional decision makers, but that underlying index methodology, understanding what the ramifications and the implications are for their portfolios is really critical for them to understand.”