Investing Ideas

Enhanced strategies: A different approach to seeking outperformance

How the modern ETF structure and systematic, active investing can help maintain core equity exposure while improving portfolio outcomes.

By: Craig Ebeling Mike Hagopian

Updated: 6/23/2026

Key Takeaways

Enhanced investment strategies can be an attractive, and cost-effective middle ground between fundamental active strategies characterized by high tracking error and index products.
Compared with pure index products, enhanced offerings are actively managed and may help investors improve portfolio outcomes by finding long-term alpha drivers while maintaining broad market participation and being mindful of transaction costs.
Enhanced strategies are not designed to dramatically outperform broad markets in any single year. Instead, they look for small, persistent advantages through an active, disciplined approach that can compound over full market cycles.
Modern ETF structural rules, including SEC changes in 2019, give active ETFs the needed flexibility to implement strategies efficiently, with improved trading, liquidity, and tax efficiency.

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Enhanced strategies: A different approach to seeking outperformance

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