As more investors seek out ways to diversify their equity exposures, smart beta ETFs are gaining a greater following.
“We’re very, very committed to the growth of smart beta,” Sharon French, Head of Beta Strategies, for OppenheimerFunds, said at the Charles Schwab Impact Conference. “In that, there’s several different categories that you can participate in. The first is fundamentally weighted, which we already are through revenue-weighted strategies. Second is single factor, and the third is multi-factors.”
OppenheimerFunds’ fundamental index-based or revenue-weighted methodology, include options like the Oppenheimer Large Cap Revenue ETF (NYSEArca: RWL), Oppenheimer Mid Cap Revenue ETF (NYSEArca: RWK) and Oppenheimer Small Cap Revenue ETF (NYSEArca: RWJ).
The 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 top line revenue. Components are then rebalanced every quarter to keep the Revenue-Weighted indices in line with the companies’ most recently reported revenue levels.