2015's Best New ETFs

12/23/2015 9:00 am EST

Focus: ETFs

Ben Johnson

Director of Global ETF Research, Morningstar

There have been 261 new exchange-traded launched into the United States market in 2015. Here, I take a look at the class of 2015 and call out what I believe are the two best launches of 2015, suggests Ben Johnson, editor of  Morningstar ETFInvestor.

Vanguard Tax-Exempt Bond ETF (VTEB)

This tax-exempt fund scores high marks across the board. This is the ETF share class of the firm’s (and the industry’s) first-ever municipal-bond index mutual fund.

VTEB tracks the S&P National AMT-Free Municipal Bond Index, the same index followed by long-standing exchange-traded fund incumbent iShares National AMT-Free Muni (MUB). At 0.12%, VTEB’s fee is less than half that charged by MUB.

While VTEB is nowhere near as liquid as MUB, early signs are promising, as the $111 million fund already sees 42,000 shares trade hands per day, on average.

As for questions of parentage, Vanguard is one of just a small handful of fund families with a Morningstar Stewardship Grade of A and I expect the firm plans to keep VTEB in its stable for a long time to come.

All told, VTEB is a compelling new option for investors seeking low-cost passive exposure to the municipal-bond market.

Goldman Sachs ActiveBeta US Large Cap Equity ETF (GSLC)

The ActiveBeta US Large Cap caught my attention when it was launched a few months back for a variety of reasons, but the first was its low fee.

At 0.09% (net of a 0.15% waiver that will last through at least September 14, 2016), the fund’s expense ratio is the lowest in the fast-growing field of multi-factor strategic-beta ETFs by a long shot.

A low fee and relatively modest factor bets make GSLC a potential low risk, medium reward (relative to a cap-weighted US large-cap exposure) proposition.

The fund has seen strong investor interest out of the gate. It has already amassed $207 million in assets and is seeing a fair amount of trading volume. These are promising signs that point towards long-run staying power for GSLC.

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