“Alternatively weighted ETFs are constructed differently from market-cap weighted ones. Constituents are selected by the index provider based on certain rules, which can include a variety of fundamental or valuation factors, or they can hold the same stocks as market-cap weighted ones. These ETFs tend to be rebalanced on a periodic basis, often leading to a higher expense ratio than the larger market-cap weighted products. In our opinion, the higher costs are sometimes worth it and in other cases there are better ETF choices,” said S&P Capital IQ.

Among institutional decision makers, 53% expect to increase smart-beta ETF allocations over the next three years while 46% of non-users play to explore the idea of smart-beta ETFs in their portfolios. Financial advisors have a similar mindset with nearly two-thirds planning to increase their smart beta allocations this, according to a recent survey by ETF Trends and RIA Database. [Institutional Investors Warming to Smart Beta ETFs]

Other smart beta offerings from PowerShares include the PowerShares International Dividend Achievers Portfolio (NYSEArca: PID). The $1.2 billion ETF, which has a trailing 12-month yield of 3.3%, is rated marketweight by S&P Capital IQ.

Important to the investor that wants to maintain some U.S. exposure, U.S. stocks are PID’s largest country weight at nearly 30%. While the ETF surprisingly features no exposure to Australia, one of the highest-yielding developed markets, the fund’s other international weights indicate it has legitimate dividend growth potential.

For example, the U.K, is PID’s third-largest country weight. “British listed companies paid $102. 1 billion in dividends last year, and since 2009 have paid roughly $441 billion,” according to the Independent. [A High Achieving Global Dividend ETF]

PowerShares FTSE RAFI US 1000 Portfolio