"We really need in this industry more folks willing to step out and say, 'I'm doing something differentiated.' It's going to lead to a better experience."

So argues Joe Smith, senior market strategist at Omaha, Nebraska-based CLS Investments, an ETF strategist and mutual fund shop with about $8.5 billion in AUM. Smith, an alumnus of the ETF product development team at Russell, urges fundsters to help clear up the naming conventions arounds ETFs by making sure that their ETFs' names stand out from the crowd.

"The naming convention won't necessarily give you the full story," Smith tells MFWire, noting that the confusion has only gotten worse with the proliferation of different ETFs in the marketplace. "It does create a lot of confusion."

Smith worries that most ETF investors have historically relied heavily on ETFs' names when picking what to invest in, even though two similarly named ETFs could have very dfferent characteristics. That, he says, is where fundsters in ETF product development can step up to the plate and make a difference.

"My suggestion would be to really dig in as they're developing new products, spend a little bit more time to find out where does this really line up in terms of exposure," Smith says. "It may not fit into a given box that exists today."

CLS builds its portfolios of out ETFs by focusing on "risk budgeting." The firm is a heavy user of both smart ETFs and active ETFs, Smith says, with the former accounting for between 45 and 50 percent of its portfolios and the latter accounting for between 15 and 20 percent. 

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