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These smart-beta index-based funds are able to provide investors actively managed styles within a low-cost passive index-based structure, potentially enhancing traditional indexing.

“One simplified way to consider strategic beta is that it bridges the gap between traditional passive investing and active management,” Dhillon said.

For example, the low-volatility factor captures excess returns to stocks with lower-than-average volatility, beta, and/or idiosyncratic risk. Consequently, the strategy may help limit downside risk while capturing upside potential, which could help investors outperform traditional market cap-weighted index funds with improved risk-adjusted returns.

ETF investors interested in the low-volatility theme to help smooth out swings in various market segments have a number of options available. For example, Victory Capital provides a smart-beta suite based on the low-vol strategy.

Equity

  • Victory CEMP US 500 Volatility Wtd Index ETF (NasdaqGM: CFA)
  • Victory CEMP US Small Cap Volatility Wtd Index ETF (NasdaqGM: CSA)
  • Victory CEMP International Volatility Wtd Index ETF (NasdaqGM: CIL)
  • Victory CEMP Emerging Market Volatility Wtd Index ETF (NasdaqGM: CEZ)

Equity High Dividend

  • Victory CEMP US Large Cap High Div Volatility Wtd Index ETF (NasdaqGM: CDL)
  • Victory CEMP US Small Cap High Div Volatility Wtd Index ETF (NasdaqGM: CSB)
  • Victory CEMP International High Div Volatility Wtd Index ETF (NasdaqGM: CID)

Equity Long/Cash

  • Victory CEMP US 500 Enhanced Volatility Wtd Index ETF (NasdaqGM: CFO)
  • Victory CEMP US EQ Income Enhanced Volatility Wtd Index ETF (NasdaqGM: CDC)
  • Victory CEMP US Discovery Enhanced Volatility Wtd Index ETF (NasdaqGM: CSF)
  • Victory CEMP Developed Enhanced Volatility Wtd Index ETF (NasdaqGM: CIZ)

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