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If your quality factor fund looks like and acts like a value fund, it probably is one. The quality factor shares many characteristics with value stocks. Smart beta ETFs define quality in slightly different ways but generally it encompasses some combination of the following dimensions: profitability, earnings quality, financial leverage (low debt to equity), and low volatility. If it is quacking like a value fund, then it most likely also favors large-capitalization stocks.…

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Investors whose portfolio value jumped around on slow Chinese economic growth, the Brexit vote and the Trump win in 2016 may be surprised to learn that historically stock volatility is low. Since 2013, volatility has been trading below its historical 15% average. What has changed is the increase in frequency of outlier events causing extreme price movements. These market anomalies have become known as black swan events because like a black swan they…

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I was checking out my portfolio returns this year and the returns of various Smart Beta / Factor ETFS and one really jumped out at me.  It was the iShares Edge MSCI USA Momentum Fctr ETF (MTUM), a momentum fund as the name implies.  It’s one of the largest Smart Beta ETFs available with over $3.5 Bil under management… the expense ratio is also low at 15 basis points (0.15%).  Year to date, its…

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So its been a while since I’ve posted… Its been a busy year in my physical business, but I’m about to get the ball rolling again with more awesomeness on Smart Beta ETF’s.   Since the last time I posted back in Novembers, more cash than ever has flowed into Smart Beta assets.  Per the ETFGI, an independent research and consultancy firm on trends in the ETF space, Smart Beta Assets have increased 14.9% year…

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