Happy New Year! To kick off 2026, we are launching a new educational series dedicated to helping you better understand, navigate, and research the vast ETF landscape. With the U.S. market quickly approaching 5,000 listed ETFs, having a structured process for security selection is more critical than ever.
We begin our journey with U.S. Size & Style, the largest channel in our ecosystem, representing over $7 trillion in assets. In this video, I demonstrate how to move beyond simple tickers and use a tiered approach to organize this massive universe into actionable investment buckets.
Three Ways to Screen U.S. Size & Style ETFs
To effectively research the market, you need a way to filter out the noise. We break down the screening process into three levels of sophistication:
1. The “101” Approach: Traditional Size & Style Boxes
This is the classic starting point for most investors. By using our standard classification filters, you can instantly group the $7.2 trillion marketplace into the traditional nine-box grid: Large, Mid, and Small Cap across Value, Blend, and Growth styles. This provides a high-level view of the market and allows you to compare expense ratios, performance, and risk metrics within familiar categories.
2. The “201” Approach: Granular Classification & Selection Criteria
The ETF market has evolved beyond simple style boxes. The “201” approach utilizes our proprietary classification system to segment the market by:
- Segment: Differentiating between “Total Market” strategies and “Extended Market” (Mid/Small) plays.
- Strategy: Separating “Beta” (passive indexes) from “Factor” or “Tactical” strategies that use technical overlays.
- Selection: Drilling down into the specific objective of the fund—such as Quality, Dividend, or Momentum—to see which factors are currently leading the market.
3. The “301” Approach: Derived Analytics (Look-Through Analysis)
The most sophisticated way to screen is to ignore the fund’s label and look at what it actually owns. Our Derived Analytics (powered by FactSet data) performs a “look-through” of the underlying holdings to assign a style.
- Reality Check: For example, many “Core” or “Large Cap” funds currently carry a “Growth” profile due to heavy weightings in the “Magnificent 7.”
- Tilt Analysis: You can group the entire universe by their actual portfolio characteristics, such as identifying which funds possess an “Above Average” quality rating regardless of what is written in their prospectus.
Disclosures
This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.
This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.
