An ETF like REEM can help investors avoid overvalued emerging markets stocks as well as financially-challenged firms.
“By weighting companies by their revenue rather than their market capitalization, the fund aims to provide investors with increased exposure to the stocks of companies across the emerging markets with strong revenues. This approach also avoids the traditional index’s bias towards overvalued stocks, while maintaining a fully transparent investment process and offering the broad market diversification that has historically attracted investors to index strategies,” according to Oppenheimer.
Revenue-weighted domestic options include the Oppenheimer Large Cap Revenue ETF (NYSEArca: RWL), Oppenheimer Mid Cap Revenue ETF (NYSEArca: RWK), Oppenheimer Small Cap Revenue ETF (NYSEArca: RWJ), Oppenheimer Ultra Dividend Revenue ETF (NYSEArca: RDIV) and the Oppenheimer Financials Sector Revenue ETF (NYSEArca: RWW).
For more on Smart Beta ETFs, visit the Smart Beta Channel home page.