Cathie Wood, founder, CEO, and CIO, ARK Investment Management
ARK Investment Management may have been the biggest winner of the ongoing bitcoin fever so far.
Wood got in on bitcoin almost three years ago at $250 per coin through the Bitcoin Investment Trust. Bitcoin is valued at around $10,000 per coin today.
The two Ark exchange-traded funds invested in the cryptocurrency took the crown for top-performing ETFs in 2017 among products that don’t have inverse or leveraged strategies, according to Lipper.
The $584m ARK Innovation ETF (ARKK) and the $370m ARK Web X.0 ETF (ARKW) returned 90.38% and 88.56%, respectively, Lipper data shows.
Wood left AllianceBernstein after 12 years to form the emerging tech-focused ETF firm in 2014, where she initially dived into the not-so-popular actively managed equity ETF space before adding a slate of index ETFs.
Today she is still the majority owner of ARK, but her endeavor attracted a 16% minority investment last year from NAMA Investment Partners, a wholly owned subsidiary of largely Asia-based Nikko Asset Management.
Resolute Investment Managers, the parent company of American Beacon Advisors, took a 23% stake in 2016.
The minority stakes gave the firm strong corporate backing and distribution opportunities through Japan, the Asia-Pacific region and the US.
Ark subadvises the NikkoAM Global Fintech Equity Fund, launched at the end of 2016. Ark’s efforts earned the “Morningstar Fund of the year 2017 Global Equity Award” in Japan.
Marie Chandoha, president and CEO, Charles Schwab Investment Management
2017 marked a year of growth for Charles Schwab Investment Management.
In an era of fierce competition and fee compression, the firm made a name for itself by continuously slashing fees on its suite of ultra-low-cost funds. Under Chandoha’s leadership, Schwab experienced 65.8% growth in exchange-traded fund assets year over year, strengthening its position as the fifth largest ETF provider overall.
In February 2017, Schwab cut expenses on its entire lineup of market cap-weighted index mutual funds and fundamental index mutual funds, making them as cheap as their Schwab ETF equivalents. The firm also eliminated all investment minimums for market-cap index mutual funds and unified the products under a single share class.
This paid off as flows from smaller investors increased almost five-fold since, from $48.5m to $249m among clients with accounts ranging between $50,000 and $100,000, according to Schwab.
The launch of the Schwab 1000 Index ETF (SCHK) in October was also a testament of the firm’s embrace of low cost. SCHK gives exposure to America’s largest 1000 stocks for only five basis points – half the cost of the closest competitor. The ETF took in almost $300m assets since its launch.
Bruno del Ama, founder and CEO, Global X Funds
Global X Funds was the fastest growing ETF provider by net new flows in 2017, according to ETF.com.
The firm kicked off 2017 with $3.8bn in assets and ended the year with more than double — $8.6bn.
Global X gained popularity with its thematic ETFs, notably the $2.2bn Global X Robotics & Artificial Intelligence ETF (BOTZ), which took in $1.37bn in assets last year, and the $1bn Global X Lithium and Battery Technology ETF (LIT), which took in $824m, according to ETF.com.
Under del Ama’s leadership, some Global X ETFs were made available on Schwab’s commission-free platform to boost distribution. Del Ama was also instrumental in hiring Merrill Lynch Wealth Management’s star ETF model maker Jon Maier at a time when advisers are flocking to model portfolios. Maier has since developed three models illustrating how financial advisers can use the firm’s offerings, especially its thematic ETFs (FA, 12/11).
Andy Arnott, president and CEO, John Hancock Investments
John Hancock posted $28bn in gross sales and nearly $5bn in net sales in 2017. The sales success went hand in hand with Arnott’s leadership.
The firm redesigned its sales model with the use of advanced analytics to optimize territory assignments to provide better coverage. More than 80% of funds had fee cuts under Andy’s leadership, including funds in all asset categories, target-date funds, and 529 plan portfolios.
The firm achieved a five-year organic growth rate of 98.8%, versus an industry average of just 4.3%, among intermediary-sold funds, according to Strategic Insight. Its suite of smart beta ETFs—with indices designed by Dimensional Fund Advisors – surpassed $1bn in assets under management in just two years.
In December 2017, the firm appointed Arnott head of Manulife’s wealth and asset management business in the US and Europe to align the resources that Manulife, Hancock’s parent company, uses for its institutional clients with Hancock’s retail and retirement resources in a bid to better serve clients.