NEW YORK ( TheStreet) -- Stocks have provided rich rewards since the financial crisis. During the past five years, SPDR S&P 500 (SPY) returned 16.5% annually, according to Morningstar. But you could have done even better with ETFs that weight stocks in less traditional ways. Guggenheim S&P 500 Equal Weight (RSP) returned 19.9%, and PowerShares FTSE RAFI US 1000 (PRF), which weights stocks according to fundamental measures, returned 19.6%. Other promising approaches include funds that emphasize stocks with low-volatility or momentum. Often called smart beta benchmarks, the alternative approaches have come to be seen as ways to outdo the traditional measures such as the S&P 500.Among the leading proponents of smart beta strategies is Rob Arnott, chairman of Research Affiliates, the developer of the RAFI benchmarks. In recent research, Arnott looked at how half a dozen smart beta strategies would have performed over the last 50 years. All the strategies topped traditional benchmarks. The high-volatility approach outdid the S&P 500 by two percentage points annually. Low volatility fared even better.
Can These Hot Passive ETFs Keep Topping the Benchmarks?
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