In the Margins

FINRA warns on 'smart beta' ETFs

September 24, 2015

By The Wall Street Journal

The Financial Industry Regulatory Authority has warned investors of risks associated with "smart beta" exchange-traded funds. "Because there's no definition of what the heck smart beta even is, it's hard to issue a warning," David Nadig, director of ETFs at FactSet, said. Still, FINRA tried. The self-regulatory organization recommended investors read funds' prospectuses, carefully evaluate the costs and risk, and take note of funds' holdings and liquidity. Read the original story from The WSJ.