Self-Indexed ETF Definition
Learn the definition of self-indexed ETF and other ETF terminology from the etf.com glossary.
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A Self-indexed ETF is an exchange-traded fund that tracks an index created and maintained by the ETF issuer itself, rather than tracking an index provided by an independent third-party index provider, such as S&P Dow Jones Indices, MSCI, or FTSE Russell. In is innovative approach, the ETF issuer defines the index methodology, selects constituent securities and crafts a unique framework tailored to specific investment objectives. While self-indexing introduces an element of flexibility and creativity, investors should scrutinize the transparency, robustness, and relevance of the custom index to ensure alignment with their investment goals. Self-indexed ETFs offer a departure from traditional indexing, inviting investors to explore innovative strategies that may not conform to conventional market benchmarks.
