The Top 50 ETFs was created in summer 2014 as a list of long-term building blocks for your portfolio. The list is designed to be a toolkit of useful and cost-effective exchange traded funds (ETFs). These are passive funds that are traded on the stock market and are growing in popularity among private self-directed investors. In 2014, we first identified the best indices to track and then went in search of minimal tracking difference, low costs and good liquidity for each ETF selection.
This year we have fine-tuned the selection by asking a panel of six expert ETF analysts to make recommendations. Our panel members are:
■ Christopher Aldous, managing director at Charles Stanley Pan Asset
■ ShaunPort, chief investment officer at Nutmeg
■ Adam Laird, passive investment manager at Hargreaves Lansdown
■ Alan Miller, chief investment officer and founder of SCM Direct
■ Ben Seager-Scott, director, investment strategy at TilneyBestinvest
■ Paul Taylor, chief executive officer at McCarthy Taylor
We asked our experts:
a) Are there any products on the list that you think shouldn't be there.
b) Are there any products that are really useful (or much cheaper) and should be considered.
We have also taken into account the many articles and recommendations on ETFs that the IC funds team has written over the past two years. This year’s selection includes 29 new products, which reflects the increased competition on charges and innovation within the industry.
Mr Seager-Scott says: “I think there are two different areas I think about when making my recommendations. Firstly, for the large, main indices which are all about volumes, we’ve seen an intensification of the price war so some of these are even cheaper than last year, as there’s not really much more you can do for these types of offerings. Second is the ever increasing range of ETFs out there as increasingly these provide options for either very targeted exposure (such as single-country or single sector) or some of the more sophisticated ‘smart beta’ strategies.”
Mr Miller says: “A substantial positive for those seeking to invest via ETFs is that the market continues to open up, with intense price competition between providers, which has resulted in significant price reductions for many of the standard index based products. This has been coupled with new and existing providers continuing to innovate and introducing a number of new ETFs, sometimes referred to as smart-beta products.”
For the full selection, viewable on desktop or tablet, click here.
For readers accessing this article on a mobile phone, click here for a mobile optimised version of the top 50 selection.