Passive investing through exchange-traded funds may be losing its appeal.

Tidal Financial Group Chief Revenue Officer Gavin Filmore finds many of his clients are no longer satisfied with buying popular ETFs tied to market indexes.

"I think investors are looking beyond just the let's call it the 'VOO and chill approach' where you just buy the index in an ETF, which is a great approach but they're looking for diversification ," Filmore told CNBC's "ETF Edge" this week." "And they're not finding it within the product or within the index, so they have to look beyond that."

Filmore refers to the Vanguard S&P 500 ETF (VOO) , which tracks the S&P 500 's performance. Both are up almost 16% so far this year.

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