The Success Behind OppenheimerFunds' Revenue Weighted ETFs

Ten years ago, OppenheimerFunds launched three Revenue Weighted ETFs on the concept of weighting securities by company revenue to target their true economic contributions.

The anniversary funds are the Oppenheimer Large Cap Revenue ETF (RWL), Oppenheimer Mid Cap Revenue ETF (RWK) and the Oppenheimer Small Cap Revenue ETF (RWJ).

Today, the 10-year rankings for the three strategies are all in the top quartile against all funds in their respective Morningstar categories.

Sharon French, Head of Beta Solutions, OppenheimerFunds, said the funds have a strong value proposition and fit into its ‘challenge the index’ mantra.

“We believe there are better ways to weight an index, other than just buying the index which gives you a lot of unintended risks,” French told ETF Trends. “You aren’t in control of the weighting methodology because the market capitalization really drives its weight, but we believe there’s a better way to do that. So we look at trailing four quarters of revenue growth, which has become over 10 years a very strong predictor of future success.”