Most Passive Indexes Are ‘Arbitrary’

Arch Indices’ Tang makes the case for his new ETF, which utilizes a next-generation index.

Almost all passive indices are either market-cap or equal-weighted, static, and target a market exposure, says Yang Tang, co-founder of Arch Indices. Tang’s firm launched its first ETF earlier this month, and he believes that the traditional approach to index design is “arbitrary.” 

In this episode of Exchange Traded Fridays, Tang sits down with etf.com Senior Analyst Sumit Roy and etf.com Wealth Management Editor Jeff Benjamin to discuss why that is. Tang also breaks down the Arch Indices VOI Absolute Income ETF (VWI), which utilizes a “next generation” passive index.