And The 2017 ETF.com Awards Winners Are …

March 22, 2018

Best New Smart Beta or Factor ETF: Oppenheimer Russell 1000 Dynamic Multifactor ETF (OMFL)

Awarded to the most important new ETF launched in 2017, regardless of asset class, that uses a quantitative, research-driven approach to attempt to deliver superior long-term risk-adjusted returns.

OMFL tracks an index derived from the Russell 1000. The methodology offers exposure to the value, momentum, quality, low-volatility and size factors, but with a twist. OMFL’s methodology provides dynamic factor exposure, adjusting the importance it places on different factors based on changes in macroeconomic conditions. It offers different combinations of factor exposure based on whether the economy and market are in an expansion, slowdown, contraction or recovery phase. For example, while in a contraction, the quality factor would be given more weight, while the value factor would be emphasized more in a recovery. Although OppenheimerFunds has long offered smart-beta ETFs, it was among the last issuers to roll out its own family of factor and multifactor ETFs, and it made sure it did so in a differentiated way and at a reasonable price that’s in line with the costs of competing funds.

  • Arrow DWA Country Rotation ETF (DWCR)
  • Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB)
  • NuShares Enhanced Yield 1-5 Year U.S. Aggregate Bond ETF (NUSA)
  • Alpha Architect Value Momentum Trend ETF (VMOT)
  • QuantX Dynamic Beta US Equity ETF (XUSA)

 

Best New Active ETF: AI Powered Equity ETF (AIEQ)

Awarded to the most important new actively managed ETF launched in 2017, regardless of asset class.

AIEQ is the first actively managed ETF to harness the power of artificial intelligence throughout the investment process. AIEQ uses a quantitative proprietary model from EquBot that runs on IBM’s Watson platform. The supercomputer helps the fund managers analyze millions of pieces of data, including regulatory filings, quarterly releases, news articles and social media postings—something that’d be impossible for humans to do manually. Using this data, the managers then choose 30-70 stocks to hold based on upside potential and correlations with each other. While AIEQ relies heavily on its quantitative models, it’s still an actively managed fund, and so the fund managers ultimately decide what stocks go into the portfolio. AIEQ’s futuristic approach to investing prompted the awards committee to select it as the best new active ETF of 2017.

Finalists included:

  • Principal Active Global Dividend Income ETF (GDVD)
  • Republican Policies Fund/Democratic Policies Fund (GOP/DEMS)
  • JPMorgan Global Bond Opportunities ETF (JPGB)
  • IQ Mackay Shields Municipal Insured ETF (MMIN)
  • U.S. Tax Reform Fund (TAXR)

 

Thematic ETF of the Year: Global X Robotics & Artificial Intelligence ETF (BOTZ)

Awarded to the most important “thematic” ETF of 2017, as measured by its ability to capture important macro plays that can lead to specific portfolio outcomes.

BOTZ offers exposure to a rapidly emerging technological theme of robotics and artificial intelligence around the globe. Launched in September 2016, BOTZ entered 2017 with some $5 million in assets under management, fairly normal for a three-month-old ETF. However, to say 2017 was a blockbuster year would be an understatement. Not only did the fund attract nearly $1.5 billion in new assets, BOTZ registered a whopping gain of 58% for the year. The idea of robots in the workplace and in our homes is no longer viewed as science fiction. Robotics/artificial intelligence is not only accepted as the future, but is being embraced by nearly every industry in the world. The demand is real, and the companies BOTZ offers exposure to are leading advances and profiting in the space. This is not a theme that will fade anytime soon.

Finalists included:

  • ARK Innovation ETF (ARKK)
  • Emerging Markets Internet & Ecommerce ETF (EMQQ)
  • Oppenheimer Global ESG Revenue ETF (ESGF)
  • Republican Policies Fund/Democratic Policies Fund (GOP/DEMS)

 

Best New ESG ETF: VanEck Vectors Green Bond ETF (GRNB) & KraneShares MSCI China Environment ETF (KGRN)

Awarded to the most important ESG ETF launched in 2016.

Whereas most ESG fixed-income ETFs simply rank bonds by the ESG characteristics of the companies issuing them, GRNB allows investors to invest in specific eco-friendly corporate activities. The bonds in GRNB’s portfolio finance environmentally friendly projects such as solar installations, wind farms, zero-emissions public transportation and energy-efficient building upgrades.

KGRN, meanwhile, is the first ESG ETF specifically designed to capitalize on the Chinese clean energy boom. China is already the world’s largest and fastest-growing market for renewable energy, and the country plans to spend $360 billion by 2020 to build out its clean-energy capacity even further. The fund tracks Chinese companies of all sizes and industries, so long as they derive at least half their revenues from eco-friendly products and services.

Finalists included:

  • Inspire Global Hope ETF (BLES)
  • NuShares ESG U.S. Aggregate Bond ETF (NUBD)
  • iShares ESG USD Corporate Bond ETF (SUSC)

 

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