Vanguard

First Trust has quietly become one of the biggest revenue makers in the ETF industry. That's despite the company's noticeably higher fees and controversial ...

"I always found that the advisors that were based in Chicago were much bigger users of First Trust products," Psarofagis said. (In October 2020, Bowen donated $1 million to Preserve America, a super PAC launched to support Trump in the final months of his reelection campaign.) "They have unique strategies that you can't get elsewhere," said Dan Sondhelm, the CEO and founder of Sondhelm Partners, an asset-management consulting firm. The fund outperformed nearly 70% of ETFs in its Morningstar category for the 10-year period, according to late-May figures. In the five- and 10-year period ended May 16, it returned 9.28% and 12.01%, respectively, according to Morningstar data. Since then, the firm has employed a take-it-or-leave-it approach that seems to have worked. As most ETF managers are slashing fees on their products to compete on cost, First Trust charges some of the most expensive prices in the industry. Many asset-management CEOs have publicly supported these moves, in part to attract a younger clientele and shed an old boys-club image that has dogged the industry for decades. On the other hand, employees at a public money manager "could get fired for doing something like that," he said. In 2017, Bowen jokingly told an admiring crowd at the Fearless Investing Summit that his company was "privately held, so if you hate me, I could care less." Apart from some angry Twitter replies, Wesbury's and Stein's comments haven't seemed to get them in trouble with the company or its clients. Its exchange-traded-fund revenues are now within striking distance of the passive-investment giant Vanguard, and the firm has secured a steady flow of assets through financial-advisor channels.