Consequently, the smart-beta index ETFs try to underweight large caps and include value stocks over growth stocks.
However, smart-beta funds are most costly than the traditional index-based ETFs. RSP and PRF both have an annual expense ratio of 0.40%, whereas traditional beta-index ETFs come with an expense ratio of 0.10% or lower.
Additionally, enhanced index ETFs show slightly higher volatility due to their greater tilt toward mid- and small-cap allocations.
For more information on the broad markets, visit our S&P 500 category.
Max Chen contributed to this article.