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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. Indeed, many of the quality factor smart…
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A strategy so simple that it is hard to call ‘Smart Beta’, is an equal weighting of the S&P 500 companies.  The Guggenheim S&P 500 Equal Weight ETF (RSP) is the pioneer of this strategy.  Launched in 2003 it has amassed over $10 billion in assets under management.  A glance at the returns likely explains the the attraction to this ETF.  Since 2004 RSP has beat the SP 500 by a nice 1.4% annually even after expenses. What’s Behind This…
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Going under the hood of another Global X ETF… the Global X JPMorgan US Sector Rotator Index ETF (SCTO) launched on 10/22/2014.  The name of the fund gives away a solid indicator of what to expect; a rotation strategy among SP 500 sectors. The fund’s webpage highlights, Intelligent Participation, limited downside risk, and capped volatility as reasons ‘why’ an investor would choose the fund.  Those are certainly nice highlights if they hold merit So what is the Smart Beta strategy?…
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Update: Under The Hood Of EFFE

Posted on: 03.08.2016
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A few weeks ago I took a look at EFFE in an Under The Hood post.  One of the elements of it was a back test chart in an SEC filing with comparison to the SP 500 Total Return Index.  After looking at it a bit further it seems like their may be some issue with the backtest or maybe just the Chart. The chart shows the SP 500 Total Return over the specified time frame with a return of…
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