Podcasts & Videos

Exchange-Traded Funds & Smart Beta

May 21, 2014
Smart Beta approaches can play many roles in a portfolio. But how can you evaluate them and which ones may work best for your needs? Learn more in our latest podcast.

Ordinary brokerage commissions apply when trading exchange-traded funds.

Beta - Measure of the volatility of an index or investment relative to a benchmark. A reading of 1.00 indicates that the investment has moved in lockstep with the benchmark; a reading of -1.00 indicates that the investment has moved in the exact opposite direction of the benchmark.

S&P 500 Index - Market capitalization-weighted benchmark of 500 stocks selected by the Standard and Poor’s Index Committee designed to represent the performance of the leading industries in the United States economy.

Russell 2000 Index - measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

MSCI EAFE Index - is a market cap-weighted index composed of companies representative of the developed market structure of developed countries in Europe, Australasia and Japan.

Active managers - Portfolio managers who run funds that attempt to outperform the market by selecting those securities they believe to be the best.

Hedge - Apply strategies meant to mitigate the impact of currency movements on equity returns.

Volatility - A measure of the dispersion of actual returns around a particular average level.

Alpha - Measure of risk-adjusted performance that compares how the constituents move relative to a benchmark.

Basis point - 1/100th of 1 percent.

Christopher Gannatti, CFA
Head of Research, Europe
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Luciano Siracusano III
Chief Investment Strategist
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