IndexUniverse’s ETF Analytics, a service that rates every exchange-traded fund that has been on the market for at least six months, is gaining traction among financial advisors and others looking for independent advice on investing in this trillion-dollar-plus marketplace.

Matt Hougan, an IndexUniverse executive vice president who has spearheaded the development of ETF Analytics, says the tool has been out for about a year and now has hundreds of subscribers, who primarily are financial advisors or ETF strategists.

“In terms of reception, it's been good,” comments Hougan. “We definitely have a core group of initial users. Some large companies have made major moves into it. U.S. Trust is an example that uses it extensively throughout their organization, and we have a number of other large wins coming in the remainder of the year that we are excited about.”

There’s no debate that San Francisco-based IndexUniverse has made a big commitment to the product. “There’s been millions of dollars in data and technology work and a huge amount of training to develop this team. So it has been a big investment,” Hougan notes. “There's a lot of money invested in the ETF market, more than a trillion dollars. And we think a lot of it is not invested as well as it could be. So our goal is to help people make better choices.”

Hougan adds that as the ETF marketplace has grown, it’s become increasingly complex. “There are more funds opening, more funds closing and more sophisticated strategies than ever before. You have firms that were previously plain vanilla, like BlackRock, talking about hedged Treasury strategies, and it takes real analysis to understand the good and the potential bad in those sorts of scenarios. You definitely see lots of news stories about risks in ETFs, trading spreads in ETFs and levered and inverse ETFs driving market volatility. There’s a lot of bad information out there, but as the market continues to get more complex, you need clarity and insight.”

A subscription to ETF Analytics costs $2,000 a year for one user. IndexUniverse also offers enterprise-level deals that discount the per-user rate. In addition, individuals may subscribe on a monthly basis for $200. Anyone can visit IndexUniverse's Web site and get a two-week free trial.

A subscription actually offers several services, with the primary one being access to a tool that rates ETFs on an "A" to "F" scale based on whether they are well run and liquid.  The tool also assigns an ETF a “Fit” score between 1 and 100 that represents how well it captures the area of the market that it claims to represent. ETF Analytics rates about 1,500 ETFs.

Recently, ETF Analytics gave users the ability to download data so they can do some of their own comparisons. The service also recently rolled out Analyst Picks and Analyst Opportunities, which are recommends the single best ETF in every market category.

ETF Analytics also offers a monthly Webinar in which ETF Analytics staff review new ETFs and help people digest which ones might be useful for them. The service also includes a daily call for subscribers during which staff review current ETF news. The next add-on will be a newsletter for subscribers.

But what distinguishes ETF Analytics the most is that subscribers can call its analysts for advice. "We have a team of 10, the largest independent ETF research team in the world,” Hougan says. “It's a big group. Subscribers can call them at any time if they want individual consulting and analysis or further information on what the tool is saying. We have experts in each asset class as well as an expert in ETF trading who used to be a market maker himself. It's a complete due-diligence solution if they want a third-party opinion that's on their side just trying to help them make the right decision."

Hougan maintains that no competitor offers the institutional quality analysis that ETF Analytics does. “Often, ETFs aren't what they say they are and investors need to understand that. We're more or less the only ones that make that clear.”