Best New Commodity ETF – 2016
Awarded to the most important commodity ETF launched in 2016. Note: Importance is measured by the overall contribution to positive investor outcomes. The award may recognize ETFs that open new areas of the market, lower costs, drive risk-adjusted performance or provide innovative exposures not previously available to most investors. Only ETFs with inception dates after Dec. 31, 2015, are eligible. ETF must be classified by FactSet as a Commodity ETF to qualify.
- Elkhorn Commodity Rotation Strategy ETF (DWAC): The first purely tactical commodity ETF in the market, DWAC uses Dorsey, Wright & Associates’ Relative Strength score to choose five commodities positioned to outperform. Its roll methodology accounts for contango as well.
- Elkhorn Fundamental Commodity Strategy ETF (RCOM): If relative strength is not your thing, RCOM uses an active strategy to select commodities that will beat the broader Dow Jones RAFI Commodity Index … without massive tracking difference. As a bonus, it’s structured as an open-ended fund, so there’s no K-1.
- iPath Series B S&P GSCI Crude Oil ETF (OILB): OILB just offers traditional crude oil futures exposure in an ETN wrapper. But that’s saying something! By using an ETN instead of direct futures exposure, you avoid futures tax treatment and never get a K-1. For taxable accounts, it’s a winner, and at 0.45% in fees, a relatively cheap one.
- ProShares K-1 Free Crude Oil Strategy ETF (OILK): The name kind of gives this one away: Like OILB, it offers crude oil exposure without the K-1 you get with traditional ETFs. Unlike OILB, it’s an ETF, which means different tax treatment, but no credit risk from the issuer.
- VelocityShares 3x Inverse Crude Oil ETN (DWT): DWT replaced the beloved DWTI, which as shut down in December. It offers a way to punt on oil’s price collapse. The new product has a different underwriting bank than DWTI (Citigroup instead of Credit Suisse), and a higher fee, but has still proved popular.
Best New Currency ETF – 2016
There were no currency ETFs launched in 2016, so this category will not be awarded this year.
Best New Alternatives ETF – 2016
Awarded to the most important alternatives ETF launched in 2016. Note: Importance is measured by the overall contribution to positive investor outcomes. The award may recognize ETFs that open new areas of the market, lower costs, drive risk-adjusted performance or provide innovative exposures not previously available to most investors. Only ETFs with inception dates after Dec. 31, 2015, are eligible. ETF must be classified by FactSet as an Alternatives ETF to qualify.
- First Trust Alternative Absolute Return Strategy (FAAR): FAAR won plaudits for taking a direct view on the alternatives space: Be active. The actively managed fund provides broad-based, long/short exposure to the commodities patch. Thanks to clever structuring, it doesn’t distribute a K-1 at tax time, and is treated as a ’40 Act ETF.
- JPMorgan Diversified Alternatives ETF (JPHF): “Finally a big name and well-thought-out entrant to the liquid alts space,” wrote one nomination paper, echoing a popular sentiment about an ETF some have called “the hedge fund killer.” The fund is the most popular new alternatives ETF launched this year.
- ProShares Managed Futures Strategy ETF (FUT): The FactSet write-up perfectly encapsulates this fund: “The ProShares Managed Futures Strategy ETF provides exposure to commodity, currency and Treasury futures, weighted by risk contribution to the portfolio. Price momentum determines whether the actively managed fund takes long or short positions in each contract.” At 0.76% fees, it’s priced right for this market.
- REX VolMAXX Long VIX Weekly Futures Strategy ETF (VMAX): The first ’40 Act funds to offer exposure to VIX futures. More than that, it uses weekly futures in an attempt (and historically, a result) to achieve a higher correlation to benchmark VIX than traditional products.
- VelocityShares VIX Tail Risk ETN (BSWN): This unique product pairs positive exposure to leveraged long-dated VIX futures with inverse exposure to short-term VIX, trying to hedge tail risk while mitigating the massive decay that hits most VIX products.