What makes these funds special?
We are living in the age of exchange-traded funds, with the asset class growing at a steady clip in both size and valuation. There are more than 5,000 ETFs trading globally, and each year we see hundreds of more entrants into the market. And so far this year, a staggering $420 billion in new money has flowed into ETFs. While a few big names tend to dominate the ETF universe, there are always some new entrants to offer interesting new twists on investing because they have something unique to offer. Here are nine newly minted ETFs that stand out as some of the most interesting launches of 2017.
Vanguard Total Corporate Bond ETF (ticker: VTC)
Vanguard is a behemoth in the world of ETFs, but isn’t exactly the most aggressive issuer out there. The company makes its money by offering cheap but rather unsophisticated plays on the broad market. So it’s very noteworthy that Vanguard took a plunge into corporate debt this year with the VTC. It is a diversified fund that plays the entire universe of investment-grade bonds across both short and long durations — all with the typical cost-efficient structure of a Vanguard fund.
Expenses: 0.07 percent, or $7 annually on $10,000 invested
ProShares Decline of the Retail Store ETF (EMTY)
We all know about the pressure on brick-and-mortar retailers. After all, JCPenney Co. (JCP) and Sears Holdings Corp. (SHLD) are both down almost 70 percent in the last year, with no sign of help on the way. So it’s perhaps unsurprising that ProShares launched an ETF this year that is expressly designed to profit from the death of old-school retail stores, via short-selling the sector. With a launch in November, just before Black Friday and the holiday shopping season, it will be interesting to see how this thematic fund performs in the coming months.
Expenses: 0.65 percent
iShares U.S. Dividend and Buyback ETF (DIVB)
This intriguing fund is designed to focus on U.S. companies that are committed to returning capital to their shareholders through dividends and stock buybacks. There’s no shortage of dividend funds out there — and, in fact, iShares has a few of these in its existing fund family — but this is one of the few offerings out there that places a priority on buybacks as well. This allows for an interesting makeup. For instance, Apple (AAPL) is the No. 1 holding of the DIVB ETF despite a relatively meager dividend yield of about 1.5 percent. The reason, rather, is Apple’s $166 billion in buybacks since 2013.
Expenses: 0.25 percent
Global X Iconic U.S. Brands ETF (LOGO)
With a great ticker symbol and an intriguing strategy, this Global X fund zeroes in on companies that American consumers adore — regardless of performance or fundamentals. It’s an interesting idea in an age when brand loyalty and public perceptions seem to matter more than ever before. Current components include a list of popular stores and nameplates you’ll recognize — from Starbucks Corp. (SBUX) to Amazon.com (AMZN) to Marriott International (MAR). If consumer metrics remain strong in 2018, it stands to reason that these companies will benefit the most from spending in the coming months.
Expenses: 0.48 percent
EventShares Republican Policies Fund (GOP)
In a year when the White House and both chambers of Congress are controlled by the Republican Party, it is logical that someone decided to create a portfolio around the GOP agenda. Top holdings include a tiny coal stock, regional banks like Zions Bancorp (ZION) that could benefit from weaker regulation and industrial companies like Granite Contruction (GVA) that may benefit from potential infrastructure spending. In the interest of balance, there’s also a sister fund in the EventShares Democratic Policies Fund (DEMS) worth noting, but with a lack of political clout in Washington that doesn’t seem as noteworthy a launch.
Expenses: 0.75 percent
Schwab 1000 Index ETF (SCHK)
In this age of broad index funds, it’s interesting to see Charles Schwab taking its decades-old Schwab 1000 benchmark into the ETF space. This fund is based on an index of 1,000 large U.S. companies created by the investment firm back in 1991. There are a host of similar ways to play U.S. large caps, including funds benchmarked to the Dow 30, the Nasdaq 100 or the Standard & Poor’s 500. In many ways, this is just one more variant with 1,000 stocks instead of less in these other indexes. The super-cheap expense ratio and a unique twist on the large-cap index may give Schwab an edge in a crowded ETF marketplace.
Expenses: 0.05 percent
Nationwide Risk-Based U.S. Equity ETF (RBUS)
This risk-based fund is a twist on the “smart beta” trend that we’ve seen a lot in ETFs over the last few years. Rather than make the case for a very tactical and actively managed fund, RBUS simply layers on a level of analysis to refine its holdings. In this case, it’s metrics like the Sharpe ratio that identify volatility in a stock, and this risk-based fund is designed to steer investors away from the fastest-moving stocks out there. This trend toward helping investors mitigate risk and volatility is one that has come into force over the last year or two, and should continue in 2018.
Expenses: 0.3 percent
Graniteshares Gold Trust (BAR)
Sure, there are already two big options out there for investors who want to buy physical gold via the SPDR Gold Trust (GLD) and the iShares Gold Trust (IAU). However, the Graniteshares fund offers the same investment in physical gold for a lower cost. GLD charges 0.4 percent and IAU requires investors to pay 0.25 percent. It’s a heck of an uphill climb for the new BAR fund, however, with a meager $5 million under management a few months after launch. But it just goes to show that even the big guys can be undercut on cost.
Expenses: 0.2 percent
ProSports Sponsors ETF (FANZ)
When this fund debuted in July, it would have been fair to wonder why you would want to use pro sports as an investment filter. But in the intervening months, the NFL protests and political clashes between players and fans have caused a focus on the bottom line of the league, it may not be such a crazy idea after all. The FANZ follows a proprietary index of official sponsors across the four major sports of football, baseball, hockey and basketball. That includes obvious names like apparel giant Nike (NKE) as well as media partners like Fox parent News Corp. (NWS) that currently owns the rights to World Series broadcasts.
Expenses: 0.69 percent
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The 9 Most Interesting ETF Launches of 2017 originally appeared on usnews.com
