The Fundamental Flaw of Most Volatility ETFs

The rise of smart-beta ETFs has brought much attention to the way that issuers track a given index. Volatility, momentum, dividend-producing, and value often become the core focus of an ETF and for good reason. It allows exchange traded fund investors to hone in on specific attributes they value or need exposure to within their portfolio.

Enter Compass EMP Funds. Tom recently talked to Stephen Hammers, co-founder and CIO, about the innovations in indexing and how his firm fits into the landscape. What Stephen points out is valuable to all ETF investors. The current way issuers are indexing most “low volatility” ETFs may be fundamentally flawed.

Why? Check out the video below to see!

Stephen Hammers is Co-Founder and Chief Investment Officer for all Compass Efficient Model Portfolios (EMP) strategies. Mr. Hammers directs all investment activities, asset allocation and portfolio management. Additionally, he oversees all internal strategies and research. Compass EMP was acquired by Victory Capital on April 30, 2015. Compass EMP is a Victory Capital investment franchise.