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If you have never heard of fundamental index ETFs you might want to read Robert D. Arnott's book, The Fundamental Index: A Better Way to Invest. Jason C. Hsu and John M. West are co-authors. Check out this link to find out a bit more as to how these ETFs are constructed. Rob Arnott's creditability in the world of investing and ETFs in particular is considerable. This Seeking Alpha link provides a guide to many of these managed ETFs. As I am working my way up to my current 20 ETFs I've been ranking ETFs and the list below is primarily made up from the fundamental ETFs found in the Seeking Alpha article. One of the negatives to fundamental ETFs is the added expense as they are managed investments. However, many tend to perform better than their benchmarks, thereby covering the added expense.

For reference I included VTI, VOE, IWN, and VFH as I know several of these showed up well in other rankings. RWW and VFH are both financial ETFs so one can make a comparison between a fundamentally managed ETF and a non-managed one. The following list is by no means a complete list of fundamental ETFs.

Here is my thinking. Keep a few references such as VTI and IWN, and then add ETFs such as sector ETFs and rank them in a manner shown below. Keep the top two or three and use them as references in other rankings. As the better performing ETFs shake out to the top, eventually I will have my 20 ETFs. Of course I will always include VWO, VNQ, RWX, VTI, etc. as core holdings in every portfolio. The percentage allocated to each may differ depending on factors such as rank, Delta Factor projection, recommendation based on optimization results, Relative Strength Indicator (RSI) position, price vs. 195-Day EMA, etc.

The following table is the latest creation by an ITA member.

(click to enlarge)

Source: Do Fundamental Index ETFs Have A Place In Our Portfolios?