We began our hunt by deploying a Morningstar screen for active ETFs with Morningstar ratings of bronze, silver or gold. This delivered an initial pool of 3,275 funds, from which we eliminated all examples with a Morningstar rating of one or two stars and expense ratios greater than 0.59%.
These parameters yielded a preliminary list of 360 ETFs. Next, we sorted the funds according to category. After that, we eliminated sector funds to preserve a well-diversified character for the list, which left us with 259 candidates.
From those funds, we selected portfolios focused on U.S. and international equity and fixed income. Within the U.S. and international equity categories, we sought variety in a range of market-cap weighted funds. We also sought a mix of value, blend, growth and momentum strategies, with an accent on funds that outperformed their peers over longer periods.
This process delivered six funds, so we screened etfdb.com for the same criteria. That yielded four more funds, for a total of 10.