JEPI, TBIL: 2023 etf.com Award Winners' Paths Varied

With a month left before the next annual etf.com awards, a look back at how some of last year’s winners are doing shows at least one thing: while 2022's momentum largely carried over into 2023, not all strategies have resonated with investors and financial advisors.

The 2022 ETF of the Year, the JPMorgan Equity Premium Income ETF (JEPI), carried its momentum into 2023, delivering a 15% 12-month return and growing to nearly $33 billion.

The actively managed strategy, which grew by 34% over the past year, has become the darling of financial advisors since it was launched in 2020 because of the safety-rail strategy that appeals to risk-averse investors.

The covered call strategy, which comes with an expense ratio of 35 basis points, has pretty much delivered as promised during its relatively short existence.

JEPI Investors Find Low Volatility Isn't Always a Blessing

As investors have realized, the promise of lower volatility can cut both ways.

During its first full calendar year in 2021, JEPI gained 22%, less than the S&P 500's 29% gain. The following year, the strategy limited losses to just 3.5%, while the S&P dropped 18%.

Last year’s performance provided a more extreme contrast with JEPI gaining 9.8%, while the S&P gained 26%. The trend continues this year, with JEPI's 4.5% gain trailing the S&P 500's 7.9% rise.

TBIL's AUM Tripled to $3 Billion

It was a big first full year for the US Treasury 3 Month Bill ETF (TBIL), which saw its assets more than triple to nearly $3 billion over the past 12 months. TBIL won last year's award for best new ETF.

Launched in August 2022 by F/m Investments as a first-of-its-kind strategy, TBIL is designed to track the 3-month tenor of the yield curve.

The fund, which charges 15 basis points, tracks an index that holds just the on-the-run 3-month US Treasury Bill, which is the most recently issued and most liquid 3-month Treasury Bill.

PABU Still Gaining Traction

Among the biggest launches of 2022, last year’s Best New ESG ETF, the iShares Paris-Aligned Climate MSCI USA ETF (PABU), continues to gain traction in an environment that has turned chilly for many ESG strategies.

The $1.8 billion PABU, which charges 10 basis points, tracks an index of U.S. large- and mid-cap companies that are weighted based on criteria similar to the Paris Climate Agreement and carbon reduction goals.

PABU's 30% gain last year outpaced the S&P 500 and it's 2024 year-to-date 7.4% increase almost matches the broader S&P 500.

CGGR's Active Strategy Outperforming

The market continues to embrace last year’s Best New U.S. Equity ETF, the Capital Group Growth ETF (CGGR), which has swelled to $4.9 billion since its February 2022 launch.

The fund’s assets are up 172% over the past year.

CGGR, which charges 39 basis points, follows an actively managed strategy that invests across the market capitalization spectrum of U.S. companies.

CGGR, which gained 42% last year and is up 12% this year, was among the first six ETFs launched by Capital Group.

SCMB: Smaller, Cheaper in Fixed Income Space

The Best New U.S. Fixed Income ETF last year, the Schwab Municipal Bond ETF (SCMB), offers dirt-cheap exposure to a broad index of domestic tax-exempt debt.

Despite an expense ratio of just 3 basis points, the ETF launched in October 2022 has grown to just $283 million.

Low cost aside, SCMB is living in the shadow of the $36.8 billion iShares National Muni Bond ETF (MUB), which tracks the same index and charges 5 basis points.

Dimensional's DFSV Offers Actively Managed Small Value

Last year’s Best New Active ETF, the Dimensional US Small Cap Value ETF (DFSV), has grown to $2.7 billion from its February 2022 launch.

The actively managed strategy, which charges 31 basis points, targets smaller companies showing strong value characteristics. DFSV gained 19% last year and is down 1.3% this year.

Issuer of the Year, Dimensional, Grows Assets

Commonly referred to as DFA among the hordes of financial advisor loyalists who subscribe to the active management strategies, Dimensional Fund Advisors earned the title of ETF Issuer of the Year last year and continues to build on that momentum.

The $677 billion asset manager was primarily managing mutual funds until entering the ETF space in 2020. A year ago, DFA was offering 30 active ETFs that combined for more than $84 billion under management.

Today, the numbers are 38 ETFs and $125 billion, including $31 billion worth of net inflows and eight new ETFs in 2023.

Founded in 1981 by David Booth, Rex Sinquefield and Larry Klotz, DFA built a solid reputation in the area of actively managed thematic strategies.