Over the years the ETF space has seen exceptional growth in factor-based products. I was an early adopter of “factor-based” or “rules-based” ETFs, which track indices that are constructed to choose securities based on attributes associated with higher returns. I was impressed with the Nobel Prize-winning research of Eugene Fama and Kenneth French. After analyzing the white paper on First Trust’s AlphaDEX index methodology, which is based on Fama and French’s work, I started using some of their factor-based ETFs in my portfolios as satellite positions for U.S. mid-cap (FNX) and European (EUR) exposure.