ETFs and index mutual funds together attracted $173 billion in 2011 while actively managed mutual funds lost $31 billion to withdrawals, according to data compiled by the Investment Company Institute. Active funds' proportion of mutual fund and ETF assets has declined to 79 percent from 86 percent since the end of 2006.

First Trust's original 16 alpha-seeking ETFs, opened in 2007, attracted little interest until they established a three- year track record, a crucial milestone for many financial advisers, Issakainen said. They have since grown more than 10- fold. Another 23 First Trust funds, opened in the past 13 months, hold an additional $231 million.

Tax Advantages

"It's coming quite often from the traditional actively managed open-end mutual fund," Issakainen said of client deposits.

The ETF structure provides investors certain advantages over mutual funds. For those eager to trade, shares can be bought and sold throughout the day. For those who wish to buy and hold, unlike with mutual funds, they don't share in the costs created by other investors who trade more frequently. ETFs also bring tax efficiencies that mutual funds can't achieve.

While some providers may find limited success, alpha- seeking ETFs probably won't do better at attracting assets than other rules-based investing strategies, Luke Montgomery, an analyst at Sanford C. Bernstein & Co. in New York, said in an interview.

Among traditional U.S. mutual funds, rules-based offerings, including quantitative strategies, hold $30 billion, according to data compiled by research firm Morningstar. Rules-based money managers remove human judgment by relying strictly on pre-set formulas, often mathematically based, to select securities.

No Oxymoron

"How good is rules-based investing at generating alpha, and do people really view it as active?" Montgomery said. "And there is still the educational hurdle of convincing investors that active ETFs aren't an oxymoron."

Moreover, as with active mutual funds, an ETF's ability to beat an index doesn't guarantee it. First Trust's ETF that invests in consumer discretionary stocks has returned 3.4 percent this year through June 22, compared to a 12 percent return for its corresponding S&P index through the same period.