- Smart Beta ETFs use a rule-based, systematic approach to selecting stocks from a specific index.
- A smart beta ETF can select companies that only exhibit certain behaviors or performance.
- Smart Beta is a mixture of active and passive investing.
- Smart Beta investments follow the index, but also take into account alternative factors when selecting stocks from the index.
- Common types of smart beta ETFs include equal weight, fundamentally weighted, factor based, or low volatility strategies.