The Evolution of ETFs Through Factor-Based Indexing

As investors seek out ways to enhance portfolio returns and diminish market risks, many have turned to factor-based or smart beta index-based exchange traded fund strategies to diversify an investment portfolio.

The upcoming webcast, The Evolution of ETFs Through Factor-Based Indexing, will delve into the ETF structure and outline the evolution of the industry through the factor-based ETF indexing methodology.

The webcast panel includes:

  • David Mazza, Head of Beta Solutions Investment Marketing and ETF Specialists at OppenheimerFunds
  • Mo Haghbin, Head of Product, Beta Solutions at OppenheimerFunds

Factors are historically persistent drivers of returns within and across various asset classes.  Strategies with targeted factors can be allocated alongside traditional investment portfolio positions to potentially improve a portfolio’s outcome.

For example, at OppenheimerFunds, their  suite of revenue-weighted ETFs  focuses on companies with high revenue factor, such as the Oppenheimer Large Cap Revenue ETF (NYSEArca: RWL).

RWL’s underlying index implements a rules-based, disciplined smart beta indexing methodology targets known indices like the S&P 500 and tries to improve their performance return through weighting each security in the index by revenue. Components are then rebalanced every quarter to keep the revenue-weighted indices in line with the companies’ most recently reported revenue levels.

Financial advisors who are interested in learning more about smart beta or factor-based index ETFs can register for the Thursday, June 8 webcast here.

Alternative weighting approaches (i.e., using revenues as a weighting measure), while designed to enhance potential returns, may not produce the desired results. Because the Fund is rebalanced quarterly, portfolio turnover may exceed 100%. The greater the portfolio turnover, the greater the transaction costs, which could have an adverse effect on the fund’s performance.

Carefully consider fund investment objectives, risks, charges, and expenses. Visit oppenheimerfunds.com or call your advisor for a prospectus with this and other fund information. Read it carefully before investing.

OppenheimerFunds is not affiliated with ETF Trends.

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