With a public value of more than $400 billion, the ten largest exchange-traded funds are market powerhouses that account for over one-third of assets in the 1,216-member ETF universe. While there are some good investment options among them, a number of smaller, less-known choices offer lower expenses or alternative indexes covering similar securities.

Name Assets ($ billions) Expense ratio (%)

SPDR S&P 500 95.3 0.09
SPDR Gold Shares 60.7 0.4
Vanguard MSCI Emerging Markets 49.4 0.22
iShares MSCI Emerging Markets 41.7 0.69
iShares MSCI EAFE 41.4 0.35
iShares S&P 500 29 0.09
Powershares QQQ 27.2 0.2
iShares Barclays TIPs 20.5 0.2
Vanguard Total Stock Market 20.3 0.07
iShares Russell 2000 19.2 0.28
Assets as of 4/30/11. Source: National Stock Exchange, Morningstar

First-place SPDR S&P 500 and sixth-place iShares S&P 500 both track the S&P 500 Index, a popular benchmark of 500 large company U.S. stocks, and have low expense ratios of 0.09%.

Alternative: You can go even cheaper with the Vanguard S&P 500 ETF (VOO), which has a 0.06% expense ratio.

Vanguard MSCI Emerging Markets and iShares MSCI Emerging Markets follow the same index, but the former fund’s lower 0.22% expense ratio beats its competitor’s by a wide margin.

Alternative: For a twist on emerging market exposure, the WisdomTree Emerging Markets Equity Income (DEM) weights each stock based on the level of dividend income it generates rather than its market value. The objective is to zero in on companies with financial strength and profitability.

The iShares MSCI EAFE offers a shot at global growth by covering companies in developed markets in Europe and Asia. At 24% of assets companies in the financial sector have the biggest influence on returns.

Alternative: Vanguard MSCI EAFE (VEA) also tracks the MSCI EAFE Index and has a lower 0.15% expense ratio. Schwab International Equity (SCHF) has an even lower 0.13% expense ratio and also includes resource-rich Canadian companies. Schwab offers online commission-free trades for this and other ETFs that fall under its brand label.

With over 3,300 stocks covering just about all publicly traded companies, no other ETF spans the universe of U.S. large-cap, mid-cap and small-cap stocks as completely as Vanguard Total Stock Market. Because of its market-cap weighted index construction, larger companies tend to drive performance.

Alternative: The Schwab U.S. Broad Market ETF has a rock bottom expense ratio of 0.06% and covers over 1,500 stocks of all sizes.

PowerShares QQQ tracks the NASDAQ 100 Index, which follows the 100 largest non-financial stocks that trade on that exchange. At 65% of assets, technology companies steer performance. Apple, which once accounted for 20% of assets, is down to a tamer 12% after a recent rebalancing.

Alternatives: The Fidelity Nasdaq Composite Index ETF, covers all of the 2,000-plus Nasdaq stock universe and includes small- and mid-cap stocks. For more focused technology exposure, consider Technology Select Sector SPDR.

Instead of tracking commodity prices with futures contracts, as most commodity ETFs do, shares of SPDR Gold are backed by gold bullion stored in secured London vaults. The direct physical link to the metal makes it a highly accurate tracker of gold prices, minus expenses. While the fund’s 0.40% expense ratio is high by ETF standards, the ownership form is much more convenient than schlepping bars and coins.

Alternative: In an effort to grab a larger share of the market, the next largest physical gold ETF — the iShares Gold Trust – lowered its expense ratio from 0.40% to 0.25% last year. With $6.5 billion in assets, it is sizable enough to offer ample liquidity.

The securities behind iShares Barclays TIPS have fixed coupons and prices that fluctuate with changes in the Consumer Price Index. Designed to provide protection against inflation, TIPS prices are also affected by changes in interest rates and investor demand.

Alternatives: The iShares Barclays 0-5 Year TIPS Bond Fund and PIMCO 1-5 Year TIPS Index have shorter durations, a feature that makes them less sensitive to fluctuations in marketplace interest rates than their longer-term cousins. The goal is to have a larger proportion of returns hinge on CPI pricing adjustments.

The last member of the top-ten list, iShares Russell 2000, follows small-cap stocks in a wide variety of industries. As of mid-May, financial services represented 21% of the portfolio, followed by technology at 17% and consumer discretionary at 15%.

Alternatives: Other diversified small-cap offerings with lower expense ratios include iShares S&P Small Cap 600 and Schwab U.S. Small Cap.

Some no-load, low expense mutual funds from firms such as Vanguard, Schwab or Fidelity also follow indexing strategies and come with automatic investment and dividend reinvestment options, which aren’t available with exchange-traded funds. But the mutual funds often have minimum investment requirements or early redemption fees, and may be difficult to buy and sell across fund families.

Disclosure: The author has long positions in Vanguard Total Stock Market and iShares MSCI Emerging Markets.