Best New Asset Allocation ETF
Awarded to the most important ETF launched in 2015 that combines exposure to multiple asset classes.
Note: Importance is measured by the overall contribution to positive investor outcomes. The award may recognize an ETF that opens new areas of the market, lowers costs, drives risk-adjusted performance or provides innovative exposures not previously available to most investors. Only ETFs with inception dates after Jan. 1, 2015, are eligible. The ETF must be classified by FactSet as an asset allocation ETF to qualify.
· Credit Suisse X-Links Multi-Asset High Income ETN (MLTI)
MLTI tracks an index of dividend-paying BDCs, REITs, U.S.-listed equity, international equity, high-yield bonds, emerging market bonds, preferred stock and convertible bonds. Components are chosen by yield and weighted by liquidity. With its emphasis on nontraditional assets, it should offer unique diversification against a traditional stock/bond portfolio.
· IQ Leaders GTAA Tracker (QGTA)
QGTA aims to deliver the returns of the best mutual funds that focus on global tactical asset allocation in an ETF wrapper. The fund emulates the returns of those funds by buying ETFs. As FactSet writes: “Why not just buy the mutual funds? The ETF wrapper offers a tax-efficient, rules-based, diversified solution at a reasonable fee.”
· Master Income (HIPS)
The Master Income ETF tracks an index of assets that tend to produce high income and pass through that income without being taxed at the constituent level. These include REITs, MLPs, BDCs and debt-based closed-end funds. By focusing on pass-through securities, the fund avoids the issue of double-taxation associated with stock dividends.
· Principal EDGE Active Income (YLD)
This actively managed ETF seeks to delivers high current income by exposure to a variety of securities, including stocks, bonds, MBSs, preferred, REITs and MLPs. The manager has discretion to rotate among these categories based on market conditions.
· Tuttle Tactical Management U.S. Core (TUTT)
TUTT looks at four different momentum measures to determine how to rotate its portfolio among various takes on the U.S. equity markets, cash and bonds. A fund of funds, TUTT uses other ETFs to express these views, and positions itself as an alternative core exposure for investors.
Best New Smart-Beta/Factor ETF
Awarded to the most important new ETF launched in 2015, regardless of asset class, that uses a quantitative, research-driven approach to attempt to deliver superior long-term risk-adjusted returns.
Note: Importance is measured by the overall contribution to positive investor outcomes. The award may recognize an ETF that opens new areas of the market, lowers costs, drives risk-adjusted performance or provides innovative exposures not previously available to most investors. Only ETFs with inception dates after Jan. 1, 2015, are eligible. The ETF must be classified as a smart-beta strategy by FactSet to qualify. (Please note: Despite the FactSet categorization, currency-hedged exposures do not qualify.)
· Cambria Value and Momentum (VAMO)
VAMO is an actively managed portfolio of large, mid and small-cap stocks that have good value characteristics but also show recent positive momentum. The goal is to capture the value premium but weed out value traps. The fund can also hedge up to 100% of its portfolio if it thinks the market is overvalued.
· Goldman Sachs ActiveBeta U.S. Large Cap Equity (GSLC)
Goldman Sachs shocked the world in September 2015 when it launched GSLC. The fund—combining exposure to four different factors in a single ETF—debuted with an expense ratio of just 0.09%, making it by far the cheapest “smart beta” ETF on the market.
· iShares FactorSelect MSCI USA (LRGF)
LRGF tracks an index of large- and midcap U.S. equities, selected and weighted to increase exposure to four different factors: value; momentum; size; and quality. It is constrained so that the portfolio maintains similar overall characteristics as the broad-based U.S. market, optimizing exposure to those four factors to keep expected risk in line with the overall market.
· John Hancock Multifactor Large Cap (JHML)
JHML is the flagship ETF in a new suite of low-cost ETFs developed by John Hancock in partnership with Dimensional Fund Advisors. The multifactor methodology—emphasizing value as well as profit factors—will be familiar to fans of DFA, which previously only made funds available to advisors operating inside the DFA program.
· Lattice Developed Markets (ex-US) Strategy (RODM)
RODM tracks an index that selects companies within developed markets outside of the U.S. based on valuation, momentum, quality and other factors. The fund places a great emphasis on precisely defining what risk truly is in today’s markets, and taking steps to mitigate those risks through better fund construction.