With more than 1,500 ETFs available on the market today, investors have grown comfortable with utilizing some of the more sophisticated strategies out there for fine tuning their exposure and tapping into previously difficult-to-reach asset classes. When it comes to tactical allocation, the sheer diversity among ETFs comes in handy; investors can pick and choose from an array of country, sector, asset class, and style-specific funds. Innovation in the ETF industry has in turn spawned a variety of alternative weighting methodologies, offering new ways to access traditional market capitalization-weighted indexes [see 101 ETF Lessons Every Financial Advisor Should Learn]. Watch Your Weighting Methodology There is a great debate that rages when it comes to which weighting methodology is best. On the traditionalist side, market cap-weighting, in which the largest allocations are afforded to the largest companies, has remained by far the most popular option thanks to the low costs and [...] Click here to read the original article on ETFdb.com. Related Posts: 10 Questions About ETFs You’ve Been Too Afraid To Ask For ETF Investors, The Details Matter Ten Commandments Of ETF Investing Are Your Cap-Weighted ETFs Leaders Or Laggards? Beyond SPY: Nine Alternatives To S&P 500 ETFs
With more than 1,500 ETFs available on the market today, investors have grown comfortable with utilizing some of the more sophisticated strategies out there for fine tuning their exposure and tapping into previously difficult-to-reach asset classes. When it comes to tactical allocation, the sheer diversity among ETFs comes in handy; investors can pick and choose from an array of country, sector, asset class, and style-specific funds. Innovation in the ETF industry has in turn spawned a variety of alternative weighting methodologies, offering new ways to access traditional market capitalization-weighted indexes [see 101 ETF Lessons Every Financial Advisor Should Learn]. Watch Your Weighting Methodology There is a great debate that rages when it comes to which weighting methodology is best. On the traditionalist side, market cap-weighting, in which the largest allocations are afforded to the largest companies, has remained by far the most popular option thanks to the low costs and [...]
Click here to read the original article on ETFdb.com.
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