Companies offer ways to create your own mutual fund

— -- A: You have a hunch. You think U.S. stocks are going to outperform. You think that biotech is on the cusp of something big. You want to invest in companies with lots of fans on Facebook.

How can investors invest in such a gut feeling?

You could just buy one stock that fits your thesis. But if you bought just one stock that met that theme, you'd subject your portfolio to greater risk. A single stock is subject to more risk than a collection of stocks. By spreading your investment around, you can reduce your risk.

But if you bought a number of the stocks yourself, say collect a basket of stocks that get 100% of their revenue in the U.S., you'd get eaten up by commissions. Even at a low-cost brokerage charging just $10 a trade, if you bought 10 stocks, you'd have a commission of $100.

For that reason, many investors turn to mutual funds or exchange-traded funds to target a theme or hunch. You can buy a biotech mutual fund, for instance, that would invest in a basket of biotech stocks. But there are annual fees to those. Plus, you might not agree with the biotech stocks that are included in the mutual fund.

A number of companies are providing an answer to this investment dilemma. The pioneer in the field is Folio Investing. Folio Investing allows you to choose a "Ready-To-Go Folio," which is a collection of stocks that fit a certain theme or strategy. There are dozens of Ready-To-Go Folios available covering everything from investing in Japan to the Dogs of the Dow. You can buy one of these Ready-To-Go Folios and then you own all the stocks in them.

Folio Investing has recently gotten some competition. MotifInvesting has a similar approach, in that it offers dozens of "Motifs," that are baskets of stocks that meet certain themes. MotifInvesting's choices are more theme oriented than Folio Investing's: "Healthy and Tasty" invests in the healthy food craze, "Digital Dollars" invests in the rise in digital payments and "Income Inequality" focuses on the economic separation of the rich and poor. MotifInvesting allows investors to tailor the Motif and boost the weightings of various stocks based on different metrics.

Both Folio Investing and MotifInvesting are targeting investors who think they have a good feel for what kinds of stocks will do well in the future. These investors, though, aren't confident they can choose the one company that will benefit most, or want to own a basket of stocks that will benefit. These services are also for investors who feel the current choices of mutual funds and exchange-traded funds are inadequate or too costly.

Neither service is free. Folio Investing offers two tiers. Investors are charged $4 a trade per security in the basic plan and face a $15 per quarter fee if three or less trades are placed. There's also the Folio Unlimited Plan that allows investors to build their own Folios and trade without restrictions for $29 a month or $290 a year.

Meanwhile, MotifInvesting is taking a more flat approach. Investors can buy any of the Motifs for a $10 commission. That commission is charged once, no matter how many stocks are in the Motif. That same commission is charged when the Motif is sold.