The Strategy Behind Nationwide's Strategic Beta ETFs

As one of the newest players in the ETF industry, Nationwide Mutual Insurance Co. is educating advisors about its suite of strategic beta ETFs that seek to deliver improved risk-adjusted returns by enhancing diversification and seeking reduced volatility.

In September 2017, the insurance giant launched the Nationwide Risk-Based U.S. Equity ETF (NYSEArca: RBUS), Nationwide Risk-Based International Equity ETF (NYSEArca: RBIN) and Nationwide Maximum Diversification U.S. Core Equity ETF (NYSEArca: MXDU).

In a new educational video about its strategies, Nationwide explains how its ETFs track indexes developed by two institutional managers at the forefront of next generation index design: Rothschild Risk Based Investments LLC and Tobam.

“Rothschild’s index construction process treats risk not as a random output, but rather as a controlled input. Rothschild’s indexes are designed to provided upside potential while potentially hedging against losses stemming from volatility,” Nationwide explains.

Meanwhile, Tobam’s index construction process focuses on minimizing correlations among securities in order to maximize portfolio diversification.