Smart ETF Plays in a Volatile Market Environment
This article was originally published on ETFTrends.com.
With volatility rearing its ugly head, more investors are sifting through the ETF space to look for strategies like those that track a factor-based indexing methodology to ride out uncertain times.
"I think common style, common factor exposure is really important these days, especially when we see volatility hit the market," Michael Natale, Head of Intermediary Distribution for FlexShares, said at the Charles Schwab IMPACT 2018 conference.
"I think if you look over time, consistent and persistent performance of factors wil help investors," he added.
When creating factor-based strategies, Natale argued that providers have to partner up with seasoned or experienced market players whom know what they are doing and have exhibited a strong track record. For example, FlexShares has partnered with Morningstar in creating a line of smart beta ETFs, such as the FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT) , which tries to provides enhanced exposure to U.S. equities by tilting the portfolio toward long-term growth potential of small-cap and value stocks. Additionally, for international exposure, investors can look to the FlexShares Morningstar Developed Markets Ex-US Factor Tilt Index Fund (TLTD) and the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE) .
Furthermore, dividend ETF investors who are seeking stability, along with exposure to the growing U.S. markets, can look to the FlexShares Quality Dividend Index Fund (QDF) , FlexShares Quality Dividend Dynamic Index Fund (QDYN) and the FlexShares Quality Dividend Defensive Index Fund (QDEF) . The suite includes a group of smart-beta ETFs that focus on both quality and dividends.
"At FlexShares, we're focused on quality," Natale said.
"Over a 15-year period, quality does win. So whether it's dividends, real estate or other asset classes, quality is the place that we want to focus on," he added.
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