The Kink in Smart-Beta ETFs

The video discusses the popularity of non-cap weighted ETFs, focusing on their ability to target specific investment styles like momentum, value, and growth. It highlights potential impurities in these ETFs and their impact on returns, using examples like low volatility ETFs correlating with utilities. The video also explains the concept of style drift and how ETFs rebalance quarterly to maintain their investment focus. Despite occasional volatility spikes, these ETFs generally deliver lower volatility over the long term. The discussion emphasizes the importance of understanding these dynamics for informed investment decisions.

What happens to low volatility ETFs during a market sell-off?

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Why is it important for investors to understand the rebalancing of ETFs?

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