Investors should look beyond the most popular, large cap stock funds next year, but that doesn’t mean they have to get too defensive, according to Astoria Portfolio Advisors. John Davi, Astoria’s CEO and chief investment officer, told CNBC that the huge amount of cash that has flowed into index funds tracking the S & P 500 this year is a sign that investors should in fact look elsewhere in the stock market to get more bang for their buck. “It’s hard for me to be uberly bullish,” Davi said. “We say we’re taking our bullishness down a notch. We still have some pretty constructive themes in the basket.” Astoria helps construct portfolios of ETFs for clients, as well as advising some funds of its own. The firm also publishes a list of top ETFs for the coming year, and this year’s shows a search for winners outside the Big Tech stocks that have fueled much of this bull market for the past two years. Custom indexes Two of the funds that Astoria recommends are the ALPS O’Shares US Small-Cap Quality Dividend ETF (OUSM) and WisdomTree US Smallcap Quality Dividend Growth Fund (DGRS) . Each tracks custom indexes and have been solid performers in 2024, albeit trailing the S & P 500. OUSM is up about 20% year to date, while DGRS has gained about 18%. Part of the shift to small caps is born of an argument that the large cap indexes and some of the biggest tech stocks look expensive, leaving some companies outside that group more compelling values. “There are actually a lot of companies that are growing faster than the Mag 7,” Davi said. The impact of Donald Trump’s election is also evident on the list. Astoria included Invesco KBW Bank ETF (KBWB) and AltShares Merger Arbitrage ETF (ARB) , which could benefit from a lighter regulatory approach to the financial sector and less oversight of mergers and acquisitions. “If Trump’s cabinet radically changes regulation, there should be a boom in banks, a boom in merger arbitrage,” Davi said. The Invesco KBW fund already seems to be rallying due in part to the election results and is up about 14% in November. KBWB 1M mountain Bank stocks have outperformed the broader market in November. However, the AltShares fund is little changed on the month and is a small ETF, with less than $100 million in assets. The fund, which effectively bets that announced merger deals will close in order to collect the “arbitrage” spread between the offer price and the target’s current price, could grow in popularity if the change in administration ushers in a flurry of dealmaking. The fund’s website says it is meant to offer low volatility and low correlation to stocks and bonds, so it may not be a big relative winner if the broader market continues to rally. Crypto catch-up One of the biggest stories in ETFs in 2024 has been crypto funds, and Astoria has the Bitwise Ethereum ETF (ETHW) on next year’s list. The Bitwise fund is the fourth largest of the spot ether ETFs, behind two products from Grayscale and the iShares Ethereum Trust ETF (ETHA) . The ether funds have not been as big a hit as their bitcoin counterparts, but may be due for a catch-up rally. “Ethereum is like 36% from its all-time high, so I think there’s more upside there compared to bitcoin,” Davi said Tuesday, before a big pre-Thanksgiving rally for the cryptocurrency. ETH.CM= 5D mountain Ether rose sharply on Wednesday. However, Davi did say that he would prefer to have an ETF with more diversified crypto exposure. Investors could get some options along those lines soon, as asset managers are preparing to launch a variety of new crypto funds if the Trump administration, as expected, proves to be more friendly to the industry. Last year’s top ETFs list from Astoria is available here .