And The 2018 ETF.com Awards Winners Are …

Lara Crigger

Mar 28, 2019

Reviewed by: Lara Crigger

Edited by: Lara Crigger

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The sixth annual ETF.com Awards Thursday night in New York City honored products, people and companies that made a difference in the ETF industry in 2018. The 30 categories recognize everything from new funds to established products, as well as the issuers, service providers and end users who make the industry go round.

ETFGI's founder and managing partner Deborah Fuhr took home the Lifetime Achievement Award.

For more than 20 years, Fuhr has been one of the world's foremost experts on ETFs, delivering in-depth, comprehensive insight sought by fund issuers, investors, institutions and asset managers alike. When she’s not amassing and analyzing data on the global ETP market, she’s also advocating on behalf of greater gender diversity in the industry via Women in ETFs, the mentorship and networking organization she helped found.

"I love taking on new things that force you to learn something new," said Fuhr. "The landscape is changing so quickly, and data is very important. Providing good data and insights is key. I’m hopeful there’s still a lot more to come."

Fuhr faced off against some of the most important movers and shakers in the industry:

Reggie Browne, Cantor Fitzgerald
Marie Chandoha, Charles Schwab Investment Management
Blake Grossman, ThirdStream Partners
Joanne Hill, Cboe Vest

It was also a good night for J.P. Morgan, which took home three awards for its JPMorgan BetaBuilders Japan ETF (BBJP): ETF Of The Year, Best New ETF and Best New International/Global Equity ETF.

The fund, which provides low-cost, market-cap-weighted exposure to Japanese equities, isn't exciting in and of itself. But the sheer speed at which BBJP grew its assets blew everyone away: Within a month's time, BBJP had accumulated more than $1 billion in assets under management, making it the second-fastest U.S. ETF ever to hit the billion-dollar club.

Much of those assets came from J.P. Morgan's existing client base, in a "bring your own assets" approach that has become ETFs' latest defining trend. As of March 22, 2019, BBJP racked up an impressive $3.3 billion in assets.

The three sets of finalists are as follows:

ETF Of The Year

Best New ETF

Best New International/Global Equity ETF

Here’s a rundown of this year’s other awards…

Most Innovative New ETF: Breakwave Dry Bulk Shipping ETF (BDRY); Innovator S&P 500 Buffer ETFs (Series) (BJUL) (TIE)

Awarded to the most groundbreaking and disruptive ETF launched in 2018. This is an ETF that is pushing the envelope in terms of what kinds of exposures can be packaged into an ETF.

Innovation in ETFs can come in many forms, and in 2018, it came in the form of new and novel access from two radically different ETFs.

The Breakwave Dry Bulk Shipping ETF (BDRY), which tracks dry bulk freight futures, now allows any investor with a brokerage account to access a key commodity market segment that, until now, has mostly been off-limits. (Dry bulk freight refers to the transportation of dry cargo such as grain and iron ore.)

Meanwhile, the Innovator S&P 500 Buffer ETF - July (BJUL)—the first in a series of similar ETFs—is an actively managed fund that offers access to the price return of the S&P 500, while capping gains and limiting potential losses in a so-called buffer strategy. What makes BJUL and this entire series innovative is the extensive use of FLEX options to deliver a defined outcome in a way only previously available in structured products and annuities.

Finalists included:

Best New U.S. Equity ETF: Vanguard ESG U.S. Stock ETF (ESGV)

Awarded to the most important U.S. equity ETF launched in 2018.

Environmental, social and governance (ESG) investing is a snowball teetering on top of a mountain, and in 2018, Vanguard gave it a big push with the Vanguard ESG U.S. Stock ETF (ESGV). ESGV offers socially responsible investing in a uniquely Vanguard package. With over 1,500 stocks, the ETF boasts broad diversification at a price point of just 0.12%, making ESGV (at the time of its launch) the cheapest ESG U.S. equity ETF on the market, and one of the cheaper total U.S. market ETFs, period.

The result is a dirt-cheap total market fund with performance nearly identical to that of the much bigger Vanguard Total Stock Market ETF (VTI), but without any of the stocks that give ESG-minded investors pause. So rather than having to choose between principles and performance, investors could use ESGV as a replacement for some or all of their existing VTI allocation, headache-free. If anybody could make ESG investing go mainstream, it’s Vanguard, so we’re eager to see if ESGV lives up to that potential.

Finalists included:

Best New U.S. Fixed-Income ETF: iShares ESG U.S. Aggregate Bond ETF (EAGG)

Awarded to the most important fixed-income ETF launched in 2018.

Though environmental, social and governance (ESG) investing options are increasing in the equity space, among fixed-income ETFs, they remain relatively rare. That's what makes the iShares ESG U.S. Aggregate Bond ETF (EAGG) so attractive: It's an ESG take on the famous, broad-based Bloomberg Barclays U.S Aggregate Bond Index (the "Agg"). Bonds of corporations and other institutions are weighted based on their ESG score, and bonds of tobacco and weapons companies are excluded. EAGG optimizes its holdings to maintain marketlike exposure to the investment-grade bond space, giving investors the ability to support ESG causes in their fixed-income portfolio without deviating too much from their market. And it all comes at just 0.10%.

Finalists included:

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.

Finalists included:

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.

Finalists included:

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.

Finalists included:

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%.

Finalists included:

Best New Smart-Beta or Factor ETF: iShares Evolved U.S. Sector ETFs (Series) (IECS)

Awarded to the most important new ETF launched in 2018, regardless of asset class, that uses a quantitative, research-driven approach to attempt to deliver superior long-term risk-adjusted returns.

Artificial intelligence (AI) is at the core of what makes the iShares Evolved U.S. Sector ETFs the best in smart-beta innovation in 2018. The Evolved sector series includes seven different funds in all—the iShares Evolved U.S. Consumer Staples ETF (IECS) is a mere representative of the entire series for the purpose of this award.

With the use of AI—including machine learning, natural language processing and text analysis—iShares sifts through big data to group similar companies based on key business drivers; any given company may fall into more than one sector portfolio in the Evolved series, and is weighted accordingly. As such, the suite tackles the reality that, in today’s highly connected economy, some companies may fit in more than one traditional GICS sector classification. The Evolved ETFs offer a new way to slice and dice sectors that are dynamic and ever-changing—and for just 0.18% apiece.

Finalists included:

Best New Active ETF: Vanguard U.S. Multifactor ETF (VFMF)

Awarded to the most important new actively managed ETF launched in 2018, regardless of asset class.

Despite being known for its pioneering index funds, Vanguard has a long history in active management. Until recently, however, it hadn't launched any actively managed ETFs. So it was big news when the issuer rolled out its first suite of active ETFs in February 2018. The largest of these is the Vanguard U.S. Multifactor ETF (VFMF), which invests in U.S. equities exhibiting value, momentum, quality and low-volatility characteristics. It offers Vanguard's signature broad diversification, selecting holdings across the size spectrum and evaluating them based on a quantitative model. Best of all, VFMF is extremely low-cost, with an expense ratio of just 0.18%. Only a handful of active U.S. stock ETFs come cheaper, most of which are Vanguard's own single-factor funds.

Finalists included:

Best New ESG ETF: Goldman Sachs JUST U.S. Large Cap Equity ETF (JUST)

Awarded to the most important ESG ETF launched in 2018.

In an increasingly “greenwashed” field of ESG funds that are socially responsible in name only, the Goldman Sachs JUST U.S. Large Cap Equity ETF (JUST) attempts to truly capture investors’ priorities. The fund’s benchmark starts with a series of public opinion surveys, in which respondents identify the business practices that most matter to them—everything from how companies treat their workers to the eco-friendliness of their supply chain. Large-cap stocks are then ranked and weighted by the behaviors most important to respondents, and the index is reconstituted each year based on that year’s survey results. As such, JUST evolves as investors’ concept of social justice changes, so that its portfolio always reflects whatever matters most to investors in the moment it matters most.

Finalists included:

Thematic ETF of the Year: VanEck Vectors Video Gaming and eSports ETF (ESPO); EventShares U.S. Policy Alpha ETF (PLCY) (TIE)

Awarded to the most important “thematic” ETF of 2018, as measured by its ability to capture important macro plays that can lead to specific portfolio outcomes.

There was a tie for Thematic ETF of the Year, with the VanEck Vectors Video Gaming and eSports ETF (ESPO) and the EventShares U.S. Policy Alpha ETF (PLCY) each claiming the prize. Both funds are groundbreakers, in their own ways.

ESPO, which tracks global video gaming companies, is the first ETF to include esports in that definition, including league operators, streaming services and platform providers. PLCY, meanwhile, is an actively managed fund that chooses its holdings based on how the companies will be affected by U.S. government regulations, trade policies and fiscal spending. Launched in 2017, PLCY was revamped in April 2018 to combine the objectives of three different funds that focused on policy from partisan and tax perspectives.

Finalists included:

ETF Issuer of the Year: J.P. Morgan Asset Management

Awarded to the ETF issuer that has done the most to improve investor outcomes through product introductions, product performance, fund management, asset gathering, investor support and innovation in 2018.

J.P. Morgan Asset Management's success story happened slowly, then all at once. After years of quietly building up an ETF presence, it punctuated 2018 with blockbuster flows into its plain-vanilla, low-cost "BetaBuilders" ETF suite. In less than a year, the five ETFs, which covered core asset allocation categories at a fraction of the cost of their competitors, had attracted more than $10 billion in new assets. As of March 1, 2019, the firm's total assets under management had grown to $26 billion.

Costs matter, as does knowing there's a market for your products, making J.P. Morgan's “ETF Issuer of the Year” a well-deserved win. We’re looking forward to what’s next from the company.

Finalists included:

Most Innovative ETF Issuer of the Year: Impact Shares

Awarded to the ETF provider that has launched the most innovative and groundbreaking ETFs in 2018.

When it comes to impact investing, newcomer Impact Shares talks the talk and walks the walk. As the industry's first tax-exempt nonprofit 501(c)(3) organization, Impact Shares donates 100% of its advisory fees back to the charities and nonprofit organizations it works with, less operating expenses and working capital. In this way, investors can provide twofold support to the causes they believe in, both through investing in the companies advancing each charity's targeted cause and spurring the cash donation of the management fees.

So far, Impact Shares has partnered with the NAACP on its initial fund, the Impact Shares NAACP Minority Empowerment ETF (NACP); the YWCA on the Impact Shares YWCA Women’s Empowerment ETF (WOMN); and the UN Capital Development Fund for the Impact Shares Sustainable Development Goals Global Equity ETF (SDGA).

Finalists included:

New ETF Issuer of the Year: Defiance ETFs

Awarded to the new ETF issuer that has done the most to improve investor outcomes through product introductions, product performance, fund management, investor support and innovation.

As its name implies, 2018’s ETF Issuer of the Year, Defiance ETFs, aims to disrupt. The firm's funds poke at themes that are cutting edge and that the big boys seem to be ignoring. The digital world morphs daily into new directions and themes, and Defiance recognizes this, launching ETFs to represent the hot new tech trend faster than established ETF players.

In August, the firm debuted with its Defiance Future Tech ETF (AUGR), which tracks global virtual/augmented-reality-related companies; one month later, it followed up with its Defiance Quantum ETF (QTUM), which invests in quantum computing companies. Then, in November, Defiance filed for seven more ETFs, including the Defiance Next Gen Connectivity ETF (FIVG), which launched in March 2019.

ETFs have been the No. 1 disruptor in the investment space for a while now; they could even be considered defiant, in some ways. In that respect, Defiance ETFs is keeping the tradition alive.

Finalists included:

Index Provider of the Year: MSCI

Awarded to the index provider that has done the most to improve investor outcomes through index introductions, research, advisor support and more in 2018.

For more than 40 years, MSCI has excelled at developing, constructing and managing indices. The firm first entered the space in the late 1960s with global equity indices, and today offers more than 150,000 indices with an estimated $12.5 trillion in total equity assets benchmarked to them globally (according to the company, as of late 2017). A powerhouse among index providers, MSCI casts a long shadow in the ETF space as well, counting more than 900 ETFs from myriad providers around the globe tied to one of its benchmarks.

Finalists included:

Morningstar
S-Network Global Indexes
Solactive AG

Index of the Year: WisdomTree U.S. Multifactor Index

Awarded to the index that has done the most to provide new ways of considering investment strategies, opportunities or ideas in 2018.

The WisdomTree U.S. Multifactor Index offers a unique take on the growing field of multifactor benchmarks. This index scores the 800 largest U.S.-listed stocks based on a composite of two fundamental factors (value and quality) and two technical factors (momentum and correlation to the broader market), making it one of the only smart-beta ETFs to incorporate correlations into its selection process. The top 25% are then included in the benchmark, and weighted by overall factor score and the inverse of their 12-month volatility.

The result is a benchmark that goes beyond the same old securities and sectors; instead, the WisdomTree U.S. Multifactor Index is heavy in software (14%), insurance (13%) and health equipment (10%). This index also underpins the $101 million WisdomTree U.S. Multifactor Fund (USMF).

Finalists included:

Bloomberg Barclays Global Aggregate + China
Cboe S&P 500 Buffer Protect Index Series
JUST U.S. Large Cap Diversified Index
Solactive Sharing Economy Index

ETF Liquidity Provider of the Year: Jane Street

Awarded to the ETF liquidity provider (including market maker, authorized participant, agency broker, etc.) that has done the most to improve investor outcomes through education, support, services, innovation and outreach.

Liquidity providers play a vital role in the ETF ecosystem, enabling buyers and sellers find each other in the most efficient way possible. This year’s winner, Jane Street, has grown rapidly in the past few years, and now boasts more than 90 dedicated ETF traders, doing over $6.5 billion in business a day. Commenters noted Jane Street’s commitment to helping not just the giant ETF issuers, but new entrants with small funds, where liquidity can mean the difference between growth or closure.

Finalists included:

Cantor Fitzgerald
Citadel Securities
Flow Traders
Virtu Trading

ETF Custodian of the Year: Brown Brothers Harriman

Awarded to the ETF custodial firm offering the best and most innovative service to clients.

With more than $52 billion in ETF assets under custody, Brown Brothers Harriman (BBH) has proven itself a capable one-stop shop for the ETF industry. Over the past 15 years, the firm has partnered with 39 asset managers and ETF sponsors around the globe, working with large, established players and small, innovative newcomers alike. Known for rolling up its sleeves, BBH’s experts partner with prospective issuers throughout the life cycle of a fund, guiding ETFs from concept to launch and beyond.

Finalists included:

BNY Mellon
JPMorgan Chase Bank
State Street
U.S. Bank

Best Online Broker for ETF-Focused Investors: Charles Schwab

Awarded to the online brokerage offering the best package for ETF-focused investors. This award considers commission-free trading options, education materials, supporting services and other factors.

Four-time winner Charles Schwab offers something for every kind of investor. Its commission-free ETF pool now tops 500 products (22 of which are Schwab’s proprietary offerings), while its automated investment platform now includes free offerings for clients of any size. It also offers a 0.28% robo-advisor model for larger clients that brings a certified financial planner into the mix. For more DIY types, Schwab offers everything from model portfolios to comprehensive fund-by-fund research. Whatever comes next for ETF investors, Charles Schwab is sure to be in the middle of it.

Finalists included:

Fidelity
Merrill Lynch
Robinhood
Vanguard

Best ETF Issuer Website: iShares by BlackRock

Awarded to the most informative and user-friendly website of an ETF issuer.

BlackRock’s iShares unit once again wins Best ETF Issuer Website, as it has every year since the ETF.com Awards began. The site has recently undergone a bit of a facelift, and while it’s well-designed and easy to understand, the sheer volume of choices and information on the main page are even vaster than before. Visitors can search for individual funds, research, investment ideas, educational papers, thought leadership and much, much more. Highlights of the website include a fund screener tool that allows you to compare up to four iShares ETFs and an excellent daily blog written by the company's ETF thought leaders.

Finalists included:

Best Index Provider Website: MSCI

Awarded to the most informative and user-friendly website by an index provider.

MSCI has won the award for Index Provider Website before, which isn’t surprising. The intuitively designed site showcases not only the index provider’s extensive product offering, but its depth of expertise, informed by its 50+ years of experience in the index business. On the site, visitors can access MSCI’s vast library of research through blogs and research papers, as well as learn more about its product offerings in five core categories: global investing, factor investing, risk management, real estate and ESG research. MSCI's site also lets visitors search for returns for its cap-weighted regional, country and sector indexes, for up to a 10-year period. The data are robust and the site tools easy to use, giving investors the means with which to educate themselves on a wide range of investment topics.

Finalists included:

Alpha Architect
Benchmark Investments
Indxx
S&P

Best ETF Issuer Capital Markets Desk: iShares by BlackRock

Awarded to the ETF issuer providing the most useful support to advisors for ETF trading.

Capital markets desks have enormous influence over every trade: working with authorized participants to enable effective arbitrage; helping institutions connect with counterparties; or just working with portfolio managers to help manage internal liquidity. Returning champ iShares by BlackRock takes the prize again for its 25-year tradition of capital markets excellence. Commenters gave BlackRock particular kudos for their commitment to a holistic trading experience, working with advisors to execute trades with different issuers and manage portfolios reaching far beyond iShares ETFs.

Finalists included:

ETF Investor of the Year: Newfound Research

Awarded to a financial advisor, advisor team or institutional investor using ETFs to deliver high-quality portfolios in an innovative way.

Newfound Research, 2016's returning champion, brings a message of rational investing to every kind of investor. It's not just about their model ETF portfolios—which are simple, innovative and low-cost—but about educational outreach, beyond their existing client base. Co-founder and CIO Corey Hoffstein has been featured everywhere, from print to TV to even the digital realm, with Corey’s (too infrequent!) “Flirting with Models” podcast. In everything it does, Newfound brings a message of rational investing to all investors, no matter how large or small their asset base.

Finalists included:

Helios Quantitative Research
Horizon Investments
Ritholtz Wealth Management
Schwab Intelligent Portfolios

ETF Law Firm of the Year: Stradley Ronon

Awarded annually to the law firm that has done the most to push the ETF industry forward, including driving new and innovative products through the Securities and Exchange Commission, advocating for the industry and the rights of investors, and improving outcomes for investors.

While issuer CEOs may get the TV coverage, innovations in ETFs wouldn't be possible without the attorneys, who figure out new and inventive ways to package exposures. This year’s winner, Stradley Ronon, has plenty of practical expertise in doing just that. Led by the highly visible and universally respected Michael Mundt, Stradley Ronon’s work spans all the major issues facing the ETF market today, from helping active managers enter the space to working with the innovators behind several proposed nontransparent structures. Look at the industry’s biggest news stories, and you'll often find Stradley Ronon in the middle of them, such as client Invesco’s acquisition of Oppenheimer’s and Guggenheim’s ETF businesses.

Finalists included:

Chapman and Cutler
Dechert
Ropes & Gray
Thompson Hine

ETF Ticker of the Year: ProShares Pet Care ETF (PAWZ)

Awarded to the ETF with the best new ETF ticker. The ETF must have launched in 2018 to qualify.

PAWZ won hands-down for offering such a new take on the investing world, one that's laser-focused on our furry friends. PAWZ is the first fund centered on companies related to pet ownership, and it includes pet food makers, pet supply stories, veterinary service firms and more. With over 65% of Americans owning pets, and more than $60 billion spent in the space annually, PAWZ doesn't just have a good ticker, but also appears to have legs, with an idea that's crystal clear and noncontroversial.

Finalists included:

2018 People’s Choice Award: VanEck Vectors Video Gaming and eSports ETF (ESPO)

The winner of the People’s Choices Award was selected at the 2019 Inside ETFs conference in Hollywood, Florida.

ESPO's win shocked nobody—who could resist an ETF devoted to playing video games? Especially ESPO, which offers exposure not just to video game makers and publishers, but to the growing world of competitive video gaming, known as "esports." Some 380 million people are projected to watch esports matches this year alone. ESPO offers diversified exposure to the next generation of digital entertainment, all for the relatively low price of 0.55%. Clearly, that's an investment thesis the Nintendo generation can get behind.

Finalists included:

Methodology

ETF.com Award winners are selected in a three-part process designed to leverage the insights and opinions of leaders throughout the ETF industry.

Step 1

The awards process began with open nominations, which started Dec. 3, 2018, and closed Jan. 3, 2019.

Step 2

Following the open nominations process, the ETF.com Awards Nominating Committee—made up of senior leaders at ETF.com, Inside ETFs and FactSet—voted to select up to five finalists in each category. Votes were tallied on a majority basis. Ties were broken where possible with head-to-head runoff votes. If ties could not be broken, more than five finalists were allowed. Nomination voting concluded Jan. 14, 2019.

2018 Nominating Committee:

Matt Hougan, Chairman, Inside ETFs
Paul Britt, Senior Analyst, FactSet
Elisabeth Kashner, Director of ETF Research, FactSet
Dave Nadig, Managing Director, ETF.com
Drew Voros, Editor-in-Chief, ETF.com

Step 3

Winners from these finalists were selected by a majority vote of the ETF.com Awards Selection Committee, a group of independent ETF experts. Committee members recused themselves from voting in any category in which they or their firms appeared as finalists. Ties were decided where possible with head-to-head runoff votes.

2018 Awards Selection Committee: