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ETFs that track alternatively weighted indices Meaning & Definition

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Definition of ETFs that track alternatively weighted indices

Investing in ETFs that track Indexes has become a popular investment strategy. As a result new products have come to market that track the performance of alternative indexes. Equal weight, alternatively weighted, fundamentally weighted and volatility weighted ETFs offer exposure to other investment styles and may provide enhanced performance. These ETFs present additional risk factors that both registered representatives and investors need to understand

Applying "ETFs that track alternatively weighted indices" to Securities Exams:

These funds are sometimes marketed as having better performance than other indices which could be cause for a concern as the ETFs that track these indices may be complex, thinly traded and hard to understand for both representatives and retail investors. The lack of liquidity can lead to wider spreads causing the product to be expensive to buy and sell for investors. The portfolios often have high turnover which can lead to increased transaction costs tor the ETF . Taking a FINRA or NASAA can be challenging. Use the best materials to make sure you pass

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