The third annual ETF.com Awards honored products, people and companies that made a difference in the ETF industry in 2015.
The 30 categories recognized not only new noteworthy launches, but also veteran ETFs and well-established players who stood out last year for their role in helping investors invest better.
In 2015, no ETF was more significant than the Deutsche X-trackers MSCI EAFE Hedged Equity (DBEF | B-72). The fund garnered Best ETF of the Year.
DBEF raked in $12.5 billion in assets last year, making it the third-most-popular fund in a year when all investor eyes were on the theme of currency hedging as well as on opportunities in developed-market equities.
That popularity came side by side with solid performance relative to unhedged exposure to the MSCI EAFE index in 2015. The chart below shows the outsized gains DBEF shelled out compared with the iShares MSCI EAFE (EFA | A-93):
Chart courtesy of StockCharts.com
DBEF didn’t attract more investor attention than its direct competitor, the WisdomTree Europe Hedged Equity ETF (HEDJ | B-47), which was the most popular fund last year, with some $13.8 billion in inflows. DBEF is not even the bigger of the two—it has $12.7 billion in assets, while HEDJ has $14.9 billion.
But what’s noteworthy about DBEF—and one of the reasons it took this year’s award—is the impact it had on single-handedly putting Deutsche Bank’s currency-hedged ETF efforts on the map. The ETF led the firm’s ETF asset growth to exceed 400% in one single year. Deutsche ended 2015 as the 11th-largest ETF issuer, with more than $18 billion in ETF assets.
DBEF beat the following ETFs to the prize:
Here’s a rundown of this year’s other awards ...
Lifetime Achievement Award: Jonathan Steinberg, founder, CEO and president, WisdomTree
Awarded annually to one living individual for outstanding long-term contributions to ETF investor outcomes, this award recognizes excellence.
As founder, CEO and president of WisdomTree, Jonathan Steinberg has played a critical role in driving the ETF forward.
WisdomTree is widely credited with being one of the most innovative ETF companies on the market. The only pure-play publicly traded ETF company has been pushing the envelope well beyond the confines of market-cap-based investing and pioneering many concepts, including dividend-focused investing, currency-hedged exposure and more.
Entering the ETF market with its first launch in 2006, Steinberg has led his firm to become the 5th-largest ETF issuer in the country, with $44.6 billion in assets under management. That feat he achieved with some of his original team still intact—a fact that gives WisdomTree the distinction of having one of the most veteran ETF teams in the market.
Finalists for this award included:
· Reggie Browne, Cantor Fitzgerald
· Jim Ross, State Street Global Advisors
· Matthew Tucker, BlackRock’s iShares
· Mark Wiedman, BlackRock’s iShares
Best New ETF: SPDR DoubleLine Total Return Tactical (TOTL)
Awarded to the most important ETF launched in 2015—importance being measured by the overall contribution to positive investor outcomes.
The SPDR DoubleLine Total Return Tactical (TOTL) is the winner in this category. The fastest-growing new ETF to launch in 2015, TOTL delivers bond guru Jeffrey Gundlach’s active management acumen in an easy-to-buy ETF wrapper. While it’s been a difficult market for bonds in general, TOTL has managed to outperform the market significantly since launch.
Most Innovative New ETF: Pacer Autopilot Hedged European (PAEU)
Awarded to the most groundbreaking and disruptive ETF launched in 2015. This is an ETF that is innovating what kinds of exposure can be packaged into an ETF.
The Pacer Autopilot Hedged European (PAEU) tracks an index of large- and midcap eurozone equities selected and weighted by market cap, and toggles in or out of a currency hedge on a monthly basis based on EUR/USD momentum. It was the first ETF to offer a dynamic currency hedge.
Best New U.S. Equity ETF: Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC)
Awarded to the most important U.S. equity ETF launched in 2015.
Goldman Sachs shook up the ETF world in September 2015 when it launched the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) with a bargain-basement expense ratio. 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.
Best New International/Global Equity ETF: EGShares EM Core ex-China (XCEM)
Awarded to the most important international or global equity ETF launched in 2015.
The EGShares EM Core ex-China (XCEM) offers investors the ability to sidestep China while still holding broad-based emerging market exposure at a time when China’s equity markets have really struggled. An “ex-China” ETF takes all of the complexities of owning China stocks—whether A-shares or H-shares—out by excluding the country from the mix. Finalists included:
Best New U.S. Fixed-Income ETF: Vanguard Tax-Exempt Bond (VTEB)
Awarded to the most important fixed-income ETF launched in 2015.
The Vanguard Tax-Exempt Bond (VTEB) brought the fee wars to the muni bond ETF space—a segment that until now had been exempt from serious fee competition. VTEB offers broad-based exposure to the muni space with a fee of just 0.12%. With yields low, that low fee really matters.
Best New International/Global Fixed-Income ETF: SPDR DoubleLine Total Return Tactical (TOTL)
Awarded to the most important international or global fixed-income ETF launched in 2015.
The fastest-growing new ETF to launch in 2015, the SPDR DoubleLine Total Return Tactical (TOTL), delivers bond guru Jeffrey Gundlach’s active management acumen in an easy-to-buy ETF wrapper. While it’s been a difficult market for bonds in general, TOTL has managed to outperform the market significantly since launch.
Best New Commodity ETF: WisdomTree Coal (TONS)
Awarded to the most important commodity ETF launched in 2015.
The WisdomTree Coal (TONS) holds equal amounts of three different futures contracts on Rotterdam coal, one of the largest coal terminals in Europe. The fund is pricey, with an expense ratio over 1%, but it is the only coal futures ETF available. If you’re a bull on old-school energy, this may be the ETF for you. There were no other finalists in this category.
Best New Alternatives ETF: Hull Tactical US (HTUS)
Awarded to the most important alternatives ETF launched in 2015.
The actively managed Hull Tactical US ETF (HTUS) aims for capital appreciation—regardless of market cycle—using long, short and leveraged positions in the S&P 500, along with cash. The fund rotates based on the quant models of its manager, HTAA, ranging aggressively from 2X to -1X exposure based on what’s happening in the market.
Best New Asset Allocation ETF: Credit Suisse X-Links Multi-Asset High Income ETN (MLTI)
Awarded to the most important ETF launched in 2015 that combines exposure to multiple asset classes.
The Credit Suisse X-Links Multi-Asset High Income ETN (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.
Best New Smart-Beta/Factor ETF: Goldman Sachs ActiveBeta U.S. Large Cap Equity (GSLC)
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.
The importance is measured by the overall contribution to positive investor outcomes. 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.
Best ETF Issuer: Deutsche Asset Management
Awarded to the ETF issuer that has done the most to improve investor outcomes through product introductions, product performance, fund management, asset gathering, investor support and innovation in 2015.
Deutsche Asset Management was the fastest-growing ETF issuer on a percentage basis in 2015, tacking more than 400% AUM growth on an already-sizable base. The firm pulled in more than $16 billion in net new assets, and broke strongly into the ranks of the top 11 issuers. With innovative products in currency hedging, China exposure and bonds, it pushed the envelope in terms of what was available to investors.
· BlackRock’s iShares
· Charles Schwab
· State Street Global Advisors
Most Innovative ETF Issuer: Goldman Sachs
Awarded to the ETF provider that launched the most innovative and groundbreaking group of ETFs in 2015.
Goldman Sachs entered the ETF market with a bang in 2015, launching a full suite of smart-beta ETFs using a multifactor approach to tackle the market. While the funds are fairly innovative in and of themselves, the firm was nominated in large part for its pricing structure, headlined by the 9 bps fee for its Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC). They brought the price war to the smart beta segment. That’s innovation.
· BlackRock’s iShares
· ETF Managers Group
· State Street Global Advisors
Best New ETF Issuer: John Hancock
Awarded to the new ETF issuer that has done the most to improve investor outcomes through product introductions, product performance, fund management, investor support and innovation. Issuers must have launched their first ETF in 2015.
John Hancock’s high-profile entry into the ETF market is notable for its partnership with Dimensional Fund Advisors, which powers the methodology behind the John Hancock ETFs. The multifactor methodology, emphasizing value as well as profit factors, makes DFA-style exposures available to all investors for the first time; traditionally, DFA funds were only available to advisors operating inside the DFA program.
· Lattice Strategies
· Legg Mason
· Pacer Financial
Best Index Provider: MSCI
Awarded to the index provider that has done the most to improve investor outcomes through index introductions, research, advisor support and more. MSCI is this year’s winner.
MSCI is a globally dominant index provider, and has been one of the biggest players in the ETF market since its inception. In 2015, the firm took a major step forward in its interaction with the financial advisor market, revamping its website and significantly enhancing its research output in the factor-investing world.
· FTSE Russell
· Reality Shares
Best Index: S&P 500
Awarded to the index that has done the most to provide new ways of considering investment strategies, opportunities or ideas. The award this year goes to a veteran: the S&P 500 Index.
Everyone knows the S&P 500, and it remains the most important index in the world, with people worldwide using it to express their opinion on the market. In 2015, the S&P 500 was the underlying for the ETF with the largest inflows on the market, the Vanguard S&P 500 (VOO | A-98) as well as the ETF with the largest outflows, the SPDR S&P 500 (SPY | A-97), while SPY options dominated the entire equity options market.
· Reality Shares DIVCON Index
· MSCI USA Quality Index
· Morningstar Exponential Technologies Index
· CSI 300 Index
Best ETF Liquidity Provider: Cantor Fitzgerald
Awarded to the ETF liquidity provider (including market maker, authorized participant, agency broker, etc.) that has done the most to improve investor outcomes through education, support, services, innovation and outreach.
With Reggie Browne at the helm, Cantor Fitzgerald has aggressively grown its presence in the ETF market. The firm is noted for its expertise across a wide range of ETFs, from traditional equity to fixed income and more.
· Bloomberg Tradebook
· Deutsche Asset Management
· Jane Street
Best Online Broker for ETF-Focused Investors: Charles Schwab
Awarded to the online brokerage offering the best package for ETF-focused investors. This award considers commission-free trading options, education materials, supporting services and other factors.
The winner in this category is Charles Schwab. From its OneSource program to its robo advisor, Schwab offers unique capabilities and unique value propositions to its clients. The firm is also noted for the high-quality ETF research and tools it offers to clients.
· Interactive Brokers
· TD Ameritrade
Best ETF Offering: Wire House: UBS
Awarded to the wire house that offer its reps and advisors the best total offering in the ETF space, including research, data, tools, trading capabilities and education. The winner is UBS.
UBS not only has a solid overall offering, but its commitment to ETF research grew tremendously in 2015. That push has been largely tied to David Perlman, whose insightful research has gained notoriety for linking UBS’ overall recommendations with specific ETF implementation tools.
· Merrill Lynch
· Morgan Stanley
Best ETF Offering: Independent Regional Broker-Dealer: Raymond James
Awarded to the independent broker-dealer offering its reps and advisors the best total offering in the ETF space, including research, data, tools, trading capabilities and education. The winner in this category is Raymond James.
The firm’s new ETF-only portfolios offer investors low-cost, broad-based exposure to the ETF market.
· Securities America
Best ETF Research Paper: ETFs 2020: Preparing for a New Horizon – PricewaterhouseCoopers
Awarded to the published paper from 2015 that most increased our understanding of how ETFs and/or index-based investments affect investor outcomes, whether in portfolios, markets or broader economic context.
This year’s winner is “ETFs 2020: Preparing for a New Horizon” – PricewaterhouseCoopers
PWC’s outlook for the ETF industry identified key trends and concerns, including the industry’s growing global footprint, challenging regulatory issues and technological disruption. It is a must-read for any ETF expert.
· “Robustness of Smart Beta Strategies” – Amenc, Goltz, Sivasubramanian, and Lodh
· “Standard & Poor’s Index vs. Active Scorecard” – Standard & Poor’s
Best ETF Issuer Website: BlackRock’s iShares
Awarded to the most informative and user-friendly website by an ETF issuer. And the winner is BlackRock’s iShares.
A behemoth in the space, BlackRock’s iShares makes the most of its scale with a rich website full of research, tools, portfolios and detailed fund information. The firm invested heavily in a new ETF screener, making it ever-easier to find the right ETF to express any point of view.
· State Street Global Advisors
Best Index Provider Website: MSCI
Awarded to the most informative and user-friendly website by an index provider. This year’s winner is MSCI.
MSCI’s newly relaunched website brings high-quality design together with exceptional, institutional-quality research and insights around world-renowned core indexing capabilities.
· ERI Scientific Beta
· Reality Shares
· S&P Dow Jones Indices
Best ETF Issuer Capital Markets Desk: BlackRock’s iShares
Awarded to the ETF issuer providing the most useful support to advisors for ETF trading, this year’s award goes to BlackRock’s iShares.
Capital market desks are a key resource for investors to tap into before they make a trade, and iShares pioneered the concept of having one in-house. BlackRock’s iShares Capital Markets group offers top-of-the-class trade analytics and expertise as well as a wealth of relationships and product knowledge like no other.
· Deutsche Asset Management
· State Street Global Advisors
Best ETF Strategist: RiverFront Investment Group and Sage Advisory Services
Awarded to the ETF strategist or model portfolio provider that has done the most to improve investor outcomes in the previous year. This year, the category’s winner was a tie between two outstanding firms: RiverFront Investment Group and Sage Advisory Services.
Riverfront won in the category last year, but remains a favorite as an institutional-quality firm offering strong portfolios. The firm’s ability to put out high-quality research to support its portfolio management decisions is seen as second-to-none. Its ETF assets total $5.3 billion.
Sage Advisory Services is the dominant ETF strategist in the fixed-income space. The firm made marks last year with the deployment of ETFs into cash balance plans. Its ETF assets now total $2.5 billion.
· Astor Investment Management
· Beaumont Capital Management
· CLS Investments
· Clark Capital Management Group
Best ETF Advisor: Oakeson Steiner Wealth & Retirement
Awarded to an individual financial advisor or advisor team that is using ETFs to deliver high-quality portfolios to clients in an innovative way. This year’s winner is Oakeson Steiner Wealth & Retirement.
The firm, headquartered in Hastings, Nebraska, has been increasingly using ETFs to manage some $650 million in assets. Known for its one-on-one focus on clients, Oakeson Steiner has found that combining ETFs with customized tactical overlays is a winning recipe for lowering costs and delivering results.
· Chudom Hayes Wealth Management – Morgan Stanley, Oak Brook, IL
· Efficient Market Advisors
· Miracle Mile Advisors
· Nottingham Advisors
Best Institutional ETF User: Employees Retirement System of Texas
Awarded to an institutional investor that is using ETFs to deliver high-quality portfolios in an innovative way. This year’s winner is the Employees Retirement System of Texas.
ERST has been a vocal and significant adopter of ETFs, particularly fixed-income ETFs. The firm showed how the liquidity that ETFs offer allowed it to efficiently migrate capital to adjust for a changing fixed-income environment.
· Arizona State Retirement System
· Lazard Asset Management
· State of New Jersey Common Pension Fund
Best New ETF Ticker: CRAK
Awarded to the ETF with the best new ETF ticker. The ETF must have launched in 2015 to qualify.
The winner is CRAK—the Market Vectors Oil Refiners ETF. It’s a clever moniker that clearly explains what the exposure is all about.
· BITE: The Restaurant ETF
· IPAY: PureFunds ISE Mobile Payments ETF
· JETS: U.S. Global Jets ETF
ETF.com Award winners were selected in a three-part process designed to leverage the insights and opinions of leaders throughout the ETF industry.
The awards process began with an open nominations process, which started Dec. 1 and closed Dec. 31. Interested parties were invited to submit nominations. Self-nominations were accepted.
Following the open nominations process, the ETF.com Awards Nominating Committee—made up of senior leaders at ETF.com and senior members of the FactSet ETF team (whose data powers the ETF.com website)—voted to select up to five finalists in each category. Votes were cast on a majority basis, and ties broken, where possible, with head-to-head runoff votes. If ties could not be broken, more than five finalists were allowed. The nomination voting was completed on Jan. 11, 2016.
Members of the 2015 ETF.com Awards Nominating Committee:
Matt Hougan, CEO, ETF.com (Chair)
Paul Britt, Senior Analyst, FactSet
Dave Nadig, Director, ETFs, FactSet
Drew Voros, Editor-in-Chief, ETF.com
Winners among these finalists were selected by a majority vote of the ETF.com Awards Selection Committee, a group of independent ETF experts from throughout the ETF community. Committee members recused themselves from voting in any category in which they or their firms appeared as finalists. Ties were decided, where possible, with head-to-head runoff votes.
ETF.com Awards Selection Committee Members:
Kim Arthur, Founding Partner, Main Management
Benjamin Blaisdell, Managing Director & Investment Solutions Executive, US Trust
Rob Glownia, Fixed Income Analyst, RiverFront Investment Group
Phil Mackintosh, Managing Director, KCG
Tyler Mordy, President & Chief Investment Officer, Forstrong Global Asset Management
Jason Nicastro, Senior Research Analyst, LPL Financial
Jim Wiandt, Founder, ETF.com
Voting was completed by Jan. 18, and the results were kept secret until tonight's ETF.com Awards Dinner.
Contact Cinthia Murphy at [email protected].