ETF ISSUER OF THE YEAR
Not so surprisingly, ARK, the firm behind 2020’s ETF of the Year, ARKK, is also the ETF Issuer of the Year. The firm burst onto the scene in 2014 with four actively managed thematic ETFs backed by rigorous research and devoted to disruptive innovation.
Those funds—the ARK Innovation ETF (ARKK), ARK Autonomous Technology & Robotics ETF (ARKQ), ARK Next Generation Internet ETF (ARKW) and ARK Genomic Revolution ETF (ARKG)—are now all worth billions of dollars, and they pulled in a total of $18.8 billion in inflows during 2020. ARK itself has total assets under management of nearly
$50 billion across eight funds, a level of success virtually unheard of for a small issuer.
Founder Cathie Wood has become something of a celebrity in the financial news, spreading her gospel of disruptive innovation, intensive research and clear communication with investors. She’s steered clear of the nontransparent active ETF trend in favor of transparency regarding her firm’s analysis and its funds’ holdings.
It’s been a long time since the ETF world has seen this kind of runaway success, and it looks like ARK still has a lot of room to grow.
BEST NEW ETF ISSUER
WINNER: Dimensional Fund Advisors
ETF.com’s Best New ETF Issuer of the year is hardly a new name to the business of fund management. Dimensional Fund Advisors, with $600 billion in assets under management, has been around for some 40 years, offering a unique array of active investments using what it calls “systematic investing” packaged in the mutual fund wrapper.
In addition, DFA requires advisors to attend a two-day seminar to educate them on the firm’s investment philosophy in order to be allowed to sell its funds. When DFA said last year the firm’s ship would turn into the ETF winds, and then announced the pending conversion of mutual funds with $25 billion into ETFs, the pivot was profound for a mutual fund stalwart.
There was more than sound and fury to the announcement. Late last year, DFA launched three ETFs that have already collectively gathered more than $1 billion in assets: the Dimensional U.S. Core Equity Market ETF (DFAU), $614 million; the Dimensional International Core Equity Market ETF (DFAI), $265 million; and the Emerging Core Equity Market ETF (DFAE), $174 million.
While DFA may cut a small ETF wake now, the firm has announced a slate of mutual fund conversions to ETFs, representing $26 billion in assets, set for June, on the back of its initial success. And even more interesting to watch will be if this is the first of many huge asset management boulders to fall off the mutual fund mountain.