These multi-factor ETFs provide advisors and investors direct access to hedge fund exposure inside an ETF vehicle. The underlying indices diversify risks that are less likely to be rewarded while overweighting areas that are more likely to produce positive results.

The underlying customized FTSE Russell index selects components based on a diversified set of factor characteristics, such as relative valuation, price momentum and quality. The enhanced indexing process would allow the ETFs to exclude expensive, low quality companies with poor momentum, which could help the ETFs diminish drawdowns without sacrificing too much from any potential upside of a market recovery.

Investors can take a look at the evolving ETF industry where factor-based investments could help better manage the risk premium. The strategic beta solutions could neutralize some risks, better diversify a portfolio and potentially generate improved risk-adjusted returns over the long haul.

Financial advisors who are interested in learning more about factor-based, smart beta strategies can register for the Tuesday, April 18 webcast here.

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