It happens every year: Mutual funds buy and sell a variety of stocks in an often futile effort to top the performance of the broad, well-tracked Standard & Poor's 500 index. But recently, a couple of exchange-traded funds have pulled off the improbable-handily beating the S&P 500 while owning the same 500 stocks. Both the RevenueShares Large Cap fund (RWL) and Rydex S&P Equal Weight (RSP) have beaten the market over the last year, by more than a few percentage points.

What's their secret? As their names imply, these ETFs aren't simply clones of the popular index. Although they hold the same stocks, these ETFs place more weight on some stocks and a lot less on others. RevenueShares, for instance, ranks companies based on sales, so Wal-Mart Stores and Ford Motor are much larger positions in the ETF than they are in the broader index. Meanwhile, Rydex SGI treats every stock equally, regardless of size or other financial factors, so it naturally gives more weight to smaller firms than the S&P 500 does. Tweaking the S&P 500 for an ETF isn't new, but it's rare for the tweaked ETFs to beat it by so much.

Of course, outpacing the S&P 500 isn't easy for any fund or ETF over the long run. Smaller and midsize stocks could fall out of favor, hurting the Rydex ETF. And the heavily weighted companies in the RevenueShares fund are less profitable, on average, than those in the S&P 500 and often carry more debt. Sean O'Hara, president of RevenueShares, acknowledges his product might not be an all-weather champ but adds that revenue is a "great indicator of a company's current and future health." Many investing experts say these ETFs should be used as complements to, not replacements for, the S&P 500. "It's too tough to call whether we'll be in a large-cap rally," says Carl Resnick, managing director of Rydex SGI. Because if that type of rally happens, the original index might beat the remodeled versions of itself.