An increasing number of investors have turned away from traditional open-end actively managed mutual funds as they grow weary of high fees and underperforming returns. Additionally, with the U.S. equity bull market extending, investors are now more apt to look to alternative strategies like smart beta to potentially generate improved risk-adjusted returns.

“There are a whole class of investors who are to some degree disillusioned with active management, but not so disillusioned that they are willing to simply own the market,” Johnson added. “They want something more.”

Investors may be steering toward known, big-name players in the smart beta ETF space because of the relative newness of the strategies. It will probably require more education before investors will take a dive into the deep end and browse through the various options from large and small players alike.

“Most investors may have heard a bit here or there, but they are just becoming familiar with how to use smart beta funds in portfolios,” Ryan Issakainen, ETF strategist at First Trust, told FT, adding “so there is plenty of room for growth.”

Two trending ETF plays are the Deutsche X-trackers MSCI EMU Hedged Equity ETF (NYSEArca: DBEZ) and the Deutsche X-trackers MSCI Germany Hedged Equity Fund (NYSEArca: DBGR), which are up an average of 14% year-to-date.

These Europe-related ETFs are attractively priced relative to U.S. markets. DBEZ shows a 14.9 price-to-earnings ratio and a 1.7 price-to-book while DBGR trades at a 14.0 P/E and 1.7 P/B. In contrast, the S&P 500 is hovering around a 19.9 P/E and a 2.8 P/B.

For more information on the ETF industry, visit our ETF performance reports category.