The Elston Top Fifty has been designed to cover the major asset class exposures used by decision-makers when constructing multi-asset portfolios.
Elston has broken up the four major asset classes – equities, bonds, alternatives and cash & equivalents into 130 more granular exposures. Quantitatively-screened, it is a list of the most efficient ETFs for 50 distinct asset class exposures.
Efficiency is determined from a mix of rolling historic statistical characteristics comparing each ETF to their respective indices, such as tracking difference, tracking error, hurst exponent and kurtosis.
Speaking to ETF Stream, Henry Cobbe, head of research at Elston Consulting, commented: "The funds sectors and other existing categorisation systems are way too broad and clumsy for the precise world of ETF investing, so we took a deep breath and developed our own exposure classification system that is much more granular than existing methodologies.
"Then it is about screening for the best ETFs for that given exposure, and for that we are using Trackinsight data.
"The primary idea is to help decision-makers navigate the thousands of ETFs available to focus on screened ETFs they need to build and manage a multi-asset portfolio.
"But it makes sense to recognise the ETF providers that have developed high quality product with an award – not for the direction of that ETF’s performance, but for the efficiency of an ETF to its index."
Jean-René Giraud, CEO of Trackinsight, said: "We have developed a global ETF analysis platform to empower and inform investors. We welcome Elston’s move to create an index exposure classification system that is specific to ETFs and are delighted to be providing the analytics that underpins the Elston Top Fifty for UK-based decision-makers."
Sam Ridley, managing director of ETF Stream, added: "We are passionate about educating investors, advisers and a wider audience about ETFs so are delighted to be supporting this research initiative across our publications."
To preview the Elston Top Fifty (free extract) click here, to buy the full report detailing the Elston Top Fifty ETFs for multi-asset investors and research teams click here. Contact Elston to buy the full list of all ETFs that were evaluated for an award.
The Elston Top Fifty is proprietary to Elston Consulting and is produced in association with ETF Stream using Trackinsight data.