(Bloomberg) -- Index funds became popular over the last four decades because they’re simple, conservative and low cost. A different kind of exchange-traded fund is drawing record cash by promoting better returns with the same stocks.
Known by names such as smart beta and fundamental indexing, they weigh stocks differently -- by focusing on dividends or sales, for instance. Supporters are quick to note that some methods, such as eliminating price rankings, result in returns that beat the Standard & Poor’s 500 Index over the last five years. They’re slower to note that fees can be 10 times higher than a traditional ETF.