The exchange traded fund universe continues to expand, with many new options coming to market in the past year.
Seven ETF pundits came together for a panel on Monday, The Best New ETF of 2017: We Present, You Decide, at the Inside ETFs conference, to debate their favorite new ETF of the past year.
The winner was Matt Hougan, CEO Inside ETFs, who highlighted the USCF SummerHaven SHPEI Index Fund (BUY) . BUY tries to reflect the performance of the SummerHaven Private Equity Strategy Index, which attempts to replicate the long-term return characteristics of diversified private equity allocations. The fund utilizes a proprietary methodology that focuses on companies with low enterprise value to earnings before interest, taxes, depreciation, and amortization ratios; low net equity issuance; low market capitalization; and moderate profitability.
Eric Balchunas, ETF Analyst Bloomberg Intelligence, selected the iShares Edge Investment Grade Enhanced Bond ETF (Cboe:IGEB) as his favorite pick of 2017. The Edge Investment Grade Enhanced Bond ETF tries to reflect the performance of the BlackRock Investment Grade Enhanced Bond Index, which is comprised of investment-grade corporate debt and screens out debt with the highest probability of default and then optimizes to improve risk-adjusted returns by weighting more heavily toward bonds with attractive default-adjusted spreads.
Ben Johnson, Director of Global ETF & Passive Strategies Morningstar, saw opportunity in the newly launched Vanguard Total Corporate Bond ETF (VTC) . The Total Corporate Bond ETF acts like a fund-of-funds and will try to reflect the performance of the Bloomberg Barclays U.S. Corporate Bond Index, which includes investment-grade, fixed-rate, taxable corporate bonds issued by industrial, utility and financial issuers.
Elisabeth Kashner, Director of ETF Research FactSet, argued that the iShares Core MSCI International Developed Markets ETF (IDEV) was the best new 2017 launch. The international developed markets ETF tries to reflect the performance of the MSCI World ex USA Investable Market Index, which is comprised of small-, mid- and large-cap developed market equities outside the United States.
Tom Lydon, Editor & Publisher ETF Trends, picked out the VanEck Vectors NDR CMG Long/Flat Allocation ETF (LFEQ) . LFEQ can provide investors with an investment solution that offers a systematic approach to preserve capital by increasing cash when market health is weak while participating in uptrends with a full allocation to equity through technical indicators. The ETF strategy tries to reflect the performance of the Ned Davis Research CMG US Large Cap Long/Flat Index, which follows trade signals that dictates the portfolio’s equity allocation ranging from 100% fully invested or “long” S&P 500 exposure to 100% in cash or “flat” Solactive 13-week U.S. T-Bills.
Dave Nadig, CEO ETF.com, focused on the Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB) . GIGB tracks the Citi Goldman Sachs Investment Grade Corporate Bond Index and only holds bonds with at least one year to maturity and a minimum rating of BBB-. The bond ETF also applies a fundamental screen to measure issuers by operating margin and leverage.
Todd Rosenbluth, Senior Director, ETF & Mutual Fund Research CFRA, highlighted the Davis Select Worldwide ETF (DWLD) . DWLD is an actively managed international ETF that focuses on long-term global opportunities by incorporating Davis Advisors’ judgement experience, high conviction, low turnover, accountability and alignment. The Davis team will also screen for fundamental characteristics, including cash flows assets and liabilities, and other criteria.