OQAL targets companies in the Russell 1000 Index that exhibit greater quality characteristics such as return on assets, accruals and leverage relative to the broader U.S. equity market.

“Factor indexes are an efficient, transparent and cost effective way for investors to define and measure major market factors and, as the basis for ETFs, can be used as effective portfolio building blocks by factor investors,” Rolf Agather, director of North America research, FTSE Russell, said.

Additionally, investors who believe in a return to fundamentals can also look to the revenue-weighted methodology, including 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.

For more information on alternative index-based strategies, visit our smart beta category.