Best New International/Global Fixed-Income ETF: Vanguard Total World Bond ETF (BNDW)
Awarded to the most important international or global fixed-income ETF launched in 2018.
Vanguard knows bonds: It launched the first bond index fund all the way back in 1986, entering an asset class that had been the sole purview of active managers. And while the Vanguard Total World Bond ETF (BNDW) may not be as revolutionary as the Vanguard Total Bond Market Index Fund was 33 years ago, BNDW still deserves praise for providing investors with exceptionally low-cost exposure to the global investment-grade bond market.
BNDW gets its exposure by holding two other Vanguard ETFs, the Vanguard Total Bond Market ETF (BND), a U.S. investment-grade bond ETF, and the Vanguard Total International Bond ETF (BNDX), an ex-U.S. investment-grade bond ETF. It doesn’t charge anything extra on top of the fees for those two funds, meaning investors get to hold the equivalent of nearly 13,000 bonds across the globe for a mere 0.09% per year.
- Franklin Liberty International Aggregate Bond ETF (FLIA)
- Invesco BulletShares 2021 USD Emerging Markets Debt ETF (BSAE)
- iShares Global Green Bond ETF (BGRN)
- WisdomTree Yield Enhanced Global Aggregate Bond Fund (GLBY)
Best New Commodity ETF: iShares Bloomberg Roll Select Commodity Strategy ETF (CMDY)
Awarded to the most important commodity ETF launched in 2018.
The iShares Bloomberg Roll Select Commodity Strategy ETF (CMDY) doesn't reinvent the wheel, but it does a lot of good things very well. For starters, it offers broad commodity exposure, holding futures contracts for 20 commodities across the agriculture, energy and metals sectors, and weighting commodities by production and liquidity. Secondly, it is designed to reduce the costs of holding those futures, by selecting contracts specifically to minimize contango and maximize backwardation. Thirdly, it forgoes the annual Schedule K-1 form, which can lead to tax headaches for investors; instead, CMDY is structured as an open-ended ETF, on which investors pay the usual long- and short-term capital gains rates. Finally, at 0.28%, it's one of the cheapest broad-based commodity ETFs around.
- GraniteShares Platinum Trust (PLTM)
- iShares Gold Strategy ETF (IAUF)
- Perth Mint Physical Gold ETF (AAAU)
- SPDR Gold MiniShares Trust (GLDM)
Best New Alternatives ETF: VanEck Vectors Real Asset Allocation ETF (RAAX)
Awarded to the most important alternatives ETF launched in 2018.
Real assets, though often volatile, are often touted as good portfolio diversifiers, as well as great for hedging against rising inflation. The actively managed VanEck Vectors Real Asset Allocation ETF (RAAX) delivers a broad mix of real assets, investing in ETFs with exposure to REITs, commodities, natural resource equities, MLPs, infrastructure and more.
What sets RAAX apart is its laser focus on defense: The fund is designed with downside risk management and lower volatility in mind. To that end, the portfolio manager turns to various technical, sentiment and macro indicators to make allocation decisions across various assets, looking for those assets with better expected returns. Those allocation decisions include the ability to move the portfolio up to 100% into cash or cash equivalents when market turbulence picks up, and downside protection becomes more important.
Best New Asset Allocation ETF: WisdomTree 90/60 U.S. Balanced Fund (NTSX)
Awarded to the most important ETF launched in 2018 that combines exposure to multiple asset classes.
The WisdomTree 90/60 U.S. Balanced Fund (NTSX) is an actively managed portfolio that uses futures contracts to construct what is effectively a leveraged 60/40 portfolio of U.S. equities and Treasuries. The fund places 90% of its assets in U.S. equities and the remaining 10% in Treasury futures contracts, the notional exposure of which equals 60% of the fund's assets. The resulting exposure is then equivalent to a 90/60 allocation to stocks and Treasuries, or a 60/40 allocation, leveraged 150%. As such, the strategy offers leverage in a controlled way, and the fund has effectively navigated a tricky three-month market window, outperforming both the S&P 500 Index and Treasuries. Better yet, this sophisticated strategy comes cheap, costing just 0.20%.