A Guide to Selecting Strategic-Beta ETPs
A brief guide outlining how we set out to separate the wheat from the chaff in this field.
A version of this article was published in the July 2015 issue of Morningstar ETFInvestor. Download a complimentary copy of ETFInvestor by visiting the site.
Strategic-beta exchange-traded products, or ETPs, continue to proliferate. As of the end of June, there were 422 such ETPs, by our count; 71 of them (17%) were launched over the past 12 months. Strategic-beta ETPs collectively held $448 billion, representing 21% of all ETP assets. These hybrid active/passive varietals present a new learning curve and a distinct due-diligence challenge to investors. Here, I provide a brief guide outlining how we set out to separate the wheat from the chaff in this field and a short list of those funds we think are the cream of the crop.
Ben Johnson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.