Investor Sentiment in a Sea of ETFs

The video discusses the current trends in passive and active investing, highlighting a report from Sanford Bernstein that suggests passive investing could lead to economic issues. It introduces the concept of smart beta, or rules-based investing, as a new approach in the ETF market. The speaker explains the criteria for selecting companies in this method, emphasizing the avoidance of debt-driven dividends and slowing returns on assets. The video concludes with the idea of a hybrid investment approach that combines active management principles with the consistency of rules-based strategies.

What has been the trend in passive and active investing over the past five years?

• Passive investing has been losing money.

• Active investing has been gaining popularity.

• Active investing has been outperforming passive investing.

• Passive investing has been gaining popularity.

According to the Sanford Bernstein report, what potential economic issue could arise from passive investing?

• Economic stagnation

• Deflation

• Increased inflation

• Marxism

What is the main difference between smart beta and traditional passive investing?

• Smart beta focuses on short-term gains.

• Smart beta is a form of active management.

• Smart beta is more expensive.

• Smart beta is less volatile.

What is a key characteristic of smart beta or rules-based investing?

• It is highly volatile.

• It strictly follows predefined rules.

• It is based on subjective decision-making.

• It allows for style drift.

Why is smart beta expected to grow significantly in the market?

• Due to its high volatility.

• Because of its performance metrics.

• Because it is a new concept.

• Due to its low cost.