Smart beta or alternative index-based exchange traded funds have grown increasingly popular among the investment community. As more look to this relatively new investment strategy, there are Smart beta ETFs should have been called alpha-seeking ETFs, because their goal is to beat their benchmark index by selecting a subset of it. The simple ETF, however, is just a replica of the index. The difference between a mutual fund and a smart beta is still large. The first one has a manager that can, at any time make new investment decisions.