These choose stocks according to some mechanical formula that beats the market—supposedly.
Factor investing, which has the investor selecting stocks that fit in some statistical box like low volatility, is quite the fad. The ones here (divided into seven categories) have attracted $123 billion.
With the exception of JP Morgan BetaBuilders U.S. Equity (BBUS), these supercharged index funds are pretty expensive. Given that a fund holding the whole U.S. stock market (ticker: ITOT) can be had for a cost measured in pennies, a factor fund priced at $781 should give pause.
If factor investing worked, we could all beat the market. It would be as simple as owning just the stocks with the good factors. Now ask yourself: Do you want to pay extra for an investing formula that, if it worked, would have every investor getting above-average results?
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For an explanation of our rankings and a directory of fund categories, turn to Forbes Best ETFs.
*Honor Roll member. For the full list, turn to Best ETFs Honor Roll.
For a searchable directory of fund names and tickers, use the ETF Directory.
