For a while now, advisors and investors have been hearing more and more about smart-beta exchange-traded funds (ETFs). These are an increasingly prominent part of the ETF landscape with a rather broad definition. In simple terms, smart-beta ETFs are often defined as those funds with indexes that employ methodologies other than weighting stocks by market value, or — in the fixed income space — issue size.

In other words, a slew of funds can be considered smart-beta ETFs, including equal-weight funds, dividend strategies or ETFs focusing on a specific investment factor. With such a broad definition, it is not surprising that a substantial total of U.S.-listed ETFs — perhaps 1,000 or more — can be classified as smart-beta ETFs.

While there has been plenty of criticism regarding these funds, data confirm that many asset allocators remain fond of alternatively-weighted funds.

“Notably, in 2019 nearly eight in 10 (78%) asset owners have implemented, are evaluating or plan to evaluate a smart beta index-based strategy,” according to FTSE Russell. “In addition, adoption rates increased in Europe, North America and the Asia Pacific region, with growth also recorded in all AUM tiers: less than $1 billion, between $1-10 billion and more than $10 billion.”

Due to investor demand, issuers are not shy about bringing more smart-beta ETFs to market, making identifying the best something of a challenge. There are dozens of credible contenders for this list, but these seven sit near the top of the heap.

Smart-Beta ETFs to Buy: WisdomTree U.S. LargeCap Fund (EPS)

Expense Ratio: 0.08% per year, or $8 on a $10,000 investment.

One thing investors who are new to smart-beta ETFs should note about these funds is that alternatively weighted products usually carry higher fees than their cap-weighted rivals. That said, an increasing number of smart-beta ETFs are also inexpensive. With an annual fee of just 0.08%, the WisdomTree U.S. LargeCap Fund (NYSEARCA:EPS) is in that category.

EPS can be an alternative to traditional S&P 500 and broad market index funds because this smart beta ETF holds the 500 largest domestic stocks and weights those components by earnings, not market capitalization.

EPS’s index “is earnings-weighted in December of each year to reflect the proportionate share of the aggregate earnings each component company has generated. Companies with greater earnings generally have larger weights in the index,” according to WisdomTree.

EPS has a value tilt, but it has outperformed the S&P 500 Value Index by 1,400 basis points over the past three years.

JPMorgan Diversified Return International Equity ETF (JPIN)

Expense Ratio: 0.38%

Plenty of equity-based smart beta ETFs offer investors the opportunity to add some international diversity to their portfolios. One of the best smart beta ETFs in that group is the JPMorgan Diversified Return International Equity ETF (NYSEARCA:JPIN).

JPIN’s underlying index, the FTSE Developed ex North America Diversified Factor Index “is a multi-factor index that includes monthly rebalancing, liquidity screens, and turnover constraints,” according to J.P. Morgan. International equities in the index are scored and ranked based on value, size, momentum and low volatility factors.

This smart-beta ETF is a developed market fund so it can be used as an alternative to MSCI EAFE Index strategies. Japan, the U.K. and Australia combine for over 55% of JPIN’s geographic weight.

Invesco FTSE RAFI US 1000 ETF (PRF)

Expense Ratio: 0.39%

Closing in on its fourteenth birthday, the Invesco FTSE RAFI US 1000 ETF (NYSEARCA:PRF) is one of the oldest smart-beta ETFs in the U.S. Focused on U.S. stocks, PRF tracks the FTSE RAFI US 1000 Index.

That index “is designed to track the performance of the largest U.S. equities, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends,” according to Invesco.

There is a value tilt with PRF, but this fund has outperformed the S&P 500 and Russell 1000 Value benchmarks over the past three years. About 53% of PRF’s holdings are considered value stocks compared to approximately 13% with the growth designation. This smart beta ETF has over $5.5 billion in assets under management and its success spurred the creation of small/mid-cap and international equivalents.

Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)

Expense Ratio: 0.1%

A booming area of the smart-beta ETF universe is socially responsible investing, including environmental, social and governance funds. The Xtrackers MSCI USA ESG Leaders Equity ETF (NYSEARCA:USSG) is one of newest ESG funds, having debuted in March, but with more than $1 billion in assets under management, this is also one of the biggest ESG index funds on the market.

Like many of the legacy funds in the ESG arena, USSG uses a familiar strategy of excluding alcohol, tobacco and gambling companies, as well as makers of civilian firearms. One of USSG’s biggest advantages in terms of long-term asset growth is its low fee. At 0.1% per year, this smart-beta ETF is one of the least-expensive ESG funds on the market.

Home to 323 stocks, USSG allocates over 28% of its weight to technology stocks and over 27% of its combined weight to the consumer discretionary and healthcare sectors. While it is too early to judge USSG on performance, millennials’ preference for socially responsible investment options bodes well for this fund in terms of adding assets.

JPMorgan Diversified Return Emerging Markets Equity ETF (JPME)

Expense Ratio: 0.45%

There are dozens of emerging markets smart-beta ETFs on the market on the JPMorgan Diversified Return Emerging Markets Equity ETF (NYSEARCA:JPME) is proving to be a solid member of that group. This smart beta fund’s methodology is comparable to its developed market counterpart, the aforementioned JPIN.

JPME has a five-star Morningstar rating and emerging markets represent fertile territory for investors to consider moving beyond market cap weighting.

“Some argue that quantitative strategies, which seek to take advantage of human biases, should do better in emerging markets, where knowledge gaps and market inefficiencies are arguably more abundant,” according to Barron’s.

While Chinese stocks represent nearly 22% of JPME’s geographic weight, that is underweight compared to cap-weighted emerging markets benchmarks, indicating this smart beta ETF is a fine idea for investors looking to trim China exposure in their developing markets strategies.

FlexShares High Yield Value-Scored Bond Index Fund (HYGV)

Expense Ratio: 0.37%

There are a growing number of smart-beta ETFs in the fixed income space, including funds addressing the corporate bond universe. The FlexShares High Yield Value-Scored Bond Index Fund (NYSEARCA:HYGV) is a way for investors to put some of the advantages of smart beta on their sides when it comes to junk bonds.

HYGV follows the Northern Trust High Yield Value-Scored U.S. Corporate Bond Index, which emphasizes value in its bond identification process. However, that methodology does cheat investors out of income, as highlighted by HYGV’s 30-day SEC yield of 6.9%. Over 95% of this smart beta ETF’s holdings have maturities under 10 years, giving it a duration of just 3.3 years.

HYGV “uses innovative security selection and weighting methodologies that focus on maximizing factor inputs for value, while managing other risk factors,” according to FlexShares.

iShares Edge MSCI USA Quality Factor ETF (QUAL)

Expense Ratio: 0.15%

Many of the largest smart-beta ETFs are funds dedicated to a single investment factor, and many of those product are growth or value funds. But the iShares Edge MSCI USA Quality Factor ETF (BATS:QUAL) has long since asserted itself in the realm of individual factor strategies. Home to nearly $11 billion in assets under management, QUAL is the dominant name among dedicated quality ETFs.

With the business cycle aging and this bull market doing the same, smart beta ETFs focusing on quality stocks can reward investors as highlighted by QUAL’s year-to-date gain of more than 23%. QUAL holds 125 stocks with nearly 36% of those names hailing from the technology and healthcare sectors.

“QUAL seeks to track the investment results of the MSCI USA Sector Neutral Quality Index composed of U.S. large- and mid-capitalization stocks exhibiting quality characteristics as identified through racks U.S. large- and mid-capitalization stocks based on quality screens for three fundamental variables: return on equity, earnings variability and debt-to-equity,” according to ETF Trends.

As of this writing, Todd Shriber does not own any of the aforementioned securities.