ETF Awards: Best, Worst and What to Watch in 2014

By Eric Balchunas - 2013-12-19T16:50:25Z

Photograph by Nicholas Kamm/AFP via Getty Images

Company Symbol % Change
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Best U.S. Fixed-Income ETF

PowerShares Senior Loan Portfolio (BKLN)

Before this year, many investors didn’t know what a senior loan was. (For those who still don’t know, it’s basically a high-yield bond with a floating interest rate.) What investors did know was that a yield of 4 to 5 percent was hard to find. It was especially attractive in a fund that didn’t have much to fear from the possibility of rising interest rates, because senior loans float with those rates. The $4.8 billion that flowed into BKLN in 2013 was rewarded with a 4 percent return. 

Among the poorest performers in fixed income was the iShares TIPS Bond ETF (TIP), which lost 8.9 percent with a 1 percent yield. (Yield is the income an ETF pays out, while total return includes fluctuations in market value.) It also lost $7.3 billion in cash as investors pulled out of any ETF holding bonds with maturities over 2 to 3 years.