Smart-beta ETFs, or rule-based ETFs, which have characteristics of active and passive funds, are becoming popular. What makes these funds different from regular passive funds is that, while they too invest in stocks of popular market indices such as CNX NSE Nifty and S&P BSE Sensex, they do so with a slight twist. At present, there are ten such ETFs that track custom-made indices, which use a variety of fundamental and technical filters such as price-to-earning and price-to-book ratios and even standard deviation (used by low volatility ETFs) to choose their constituents. Their traded volumes on the exchanges have seen a pick-up on back of their strong performance.