Smart Beta ETFs

One of the most controversial commonly used terms in the ETF market is “smart beta,” but its adoption is widespread. Smart beta ETFs are funds that forgo traditional market-capitalization weighting for some alternative scheme, be it equal-weighting portfolio holdings, or some form of factor-based weighting, or dividend- and revenue-weighting methodologies, to name a few. About half of all U.S.-listed ETFs are some flavor of smart beta.