7 New ETFs To Consider if You Want To Play Today’s Top Trends
InvestorPlace - Stock Market News, Stock Advice & Trading Tips These recently-launched ETFs offer diversification as well as the opportunity to benefit from the emerging industries and trends. The post...
Exchange-traded funds (ETFs) are enjoying a surge in popularity. After a glorious 2020, the ETF market witnessed a boom in 2021, with record inflows of over $900 billion coming into the funds listed on U.S. exchanges. As of Dec. 31, 2021, there were nearly 2,800 U.S.-listed ETFs, with more than $7 trillion under management.
Among around 450 ETF debuts in the past year, there were numerous new thematic funds. They provide exposure to disruptive sectors such as meme stocks, cryptocurrencies, and the metaverse.
Yet, not everything is rosy in the ETF industry. For instance, in 2021 over 100 ETFs were shut down, representing the highest launch/close ratio over a decade.
While ETFs overall represent an inexpensive and practical way to invest in different classes, new funds come with uncertainty, just like any new investment vehicle. Recently listed ETFs are generally smaller funds without a proven track record of performance. Therefore, potential investors should conduct their share of due diligence on what exactly the fund offers and how it could potentially perform.
For starters, investors should check the ETF issuer and fund manager's expertise. In addition, exploring the ETF's investment objective, holdings and expense ratio could give an idea of whether the fund suits your portfolio's risk/reward profile.
That said, here are seven new ETFs that keep on the radar screen in the rest of the year:
- First Trust S-Network Streaming & Gaming ETF (NYSEARCA:BNGE)
- Global X AgTech & Food Innovation ETF (NASDAQ:KROP)
- Grayscale Future of Finance ETF (NYSEARCA:GFOF)
- iBET Sports Betting & Gaming ETF (NASDAQ:IBET)
- JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI)
- Pacer Global Cash Cows Dividend ETF (CBOE:GCOW)
- SonicShares Global Shipping ETF (NYSEARCA:BOAT)
7 New ETFs: First Trust S-Network Streaming & Gaming ETF (BNGE)
52-Week Range: $23.81 – $26.47
Expense Ratio: 0.70% per year
Today's first fund is the First Trust S-Network Streaming & Gaming ETF, which provides exposure to companies in content streaming, eSports, and iGaming. The passively managed fund tracks the returns of the S-Network Streaming & Gaming Index.
BNGE currently has 45 holdings. Industry exposure includes entertainment (45.71%), hotels, restaurants, and leisure (20.97%), as well as semiconductors and semiconductor equipment (12.46%). The top 10 companies account for more than 46% of net assets of $2.5 million.
Interactive entertainment publishers Activision Blizzard (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA); Japan-based Nintendo (OTCMKTS:NTDOY); and Chinese names, Tencent Holdings (OTCMKTS:TCEHY) and NetEase (NASDAQ:NTES), lead the names on the roster.
In terms of country weightings, the U.S. has the highest slice with 53.14%, followed by China (18.61%), Japan (9.24%), Sweden (5.10%), and Australia (4.63%).
BNGE initially started trading at $24.46 on Jan. 25. Since then, it has been volatile, and currently changes hands at around $23.
Global X AgTech & Food Innovation ETF (KROP)
52-Week Range: $17.30 – $25.00
Dividend Yield: 0.43%
Expense Ratio: 0.50% per year
Dynamics around food production and consumption are changing. For instance, the global agricultural robot market is expected to reach nearly $16 billion by 2028, almost four times the market size in 2020, according to a recent study of Vantage Market Research.
The Global X AgTech & Food Innovation ETF is a thematic fund. It invests in global names that focus on innovation and technologies in the agriculture and food industries.
KROP, which has 29 holdings, tracks the Solactive AgTech & Food Innovation Index. The top 10 holdings comprise around 77% of net assets of $5.5 million. Consumer staples (44.8%) lead in the sectoral breakdown, followed by materials (37.3%) and industrials (11.6%).
The fund is heavily weighted toward two stocks: Corteva (NYSE:CTVA) with 17.8% and Canadian Nutrien (NYSE:NTR) with 15.7. Both names offer seed and crop input and services. Next comes the meat-free protein food company Beyond Meat (NASDAQ:BYND) and Sweden-based oat drinks name Oatly (NASDAQ:OTLY).
KROP was first listed in mid-July 2021 and saw an all-time-high (ATH) of $25.00 on Aug. 10. Yet, it recently hit a record low at around $17.30 on Jan. 28. The ETF is currently trading at around $18, down about 8% YTD.
7 New ETFs: Grayscale Future of Finance ETF (GFOF)
52-Week Range: $22.61 – $28.52
Expense Ratio: 0.70% per year
Next is the Grayscale Future of Finance ETF, which invests in digital economy companies. The fund tracks the Bloomberg Grayscale Future of Finance Index. It started trading on Feb. 1.
GFOF has 22 holdings, and net assets are currently around $8 million. The top 10 holdings account for around 60% of the portfolio.
In terms of sectoral allocation, software makes up the largest portion with 37.71%. Next are capital markets (25.85%), IT services (17.45%), and banks (7.97%).
Around 63% of the holdings are from the U.S. Then come Canada-based stocks (14.1%), followed by those from Israel (5.9%), the U.K. (4.6%), and Germany (3.95%).
At the time of writing, GFOF is hovering around its 52-week low ($22.61), down about 20% from its Feb. 10 high of $28.52. Financial technology (fintech) names and cryptos have been under significant pressure in recent months. Interested readers could regard lower prices as an opportune entry point into some of the prominent names in the industry.
iBET Sports Betting & Gaming ETF (IBET)
52-Week Range: $10.86 – $14.86
Expense Ratio: 0.79% per year
A recent Mordor Intelligence report forecasts the gaming market to reach $315 billion by 2027. On the other hand, its value in 2021 was around $170 billion. Therefore, the segment gets significant investor interest.
Our next fund, the iBET Sports Betting & Gaming ETF, invests in sports betting and gaming sectors, including eSports and iGaming. It started trading in November 2021.
IBET holds a concentrated portfolio of 39 stocks, where the leading 10 holdings account for around 41.5% of assets. Ireland-based sports-betting and gaming company Flutter Entertainment (OTCMKTS:PDYPF), casino and resorts operator Las Vegas Sands (NYSE:LVS), Malta-based sports betting services provider Kambi Group (OTCMKTS:KMBIF), Swedish online gambling firm Evolution (OTCPK:EVVTY), and Penn National Gaming (NASDAQ:PENN) lead the stocks on the roster.
The ETF hit a 52-week low of $10.86 on Jan. 24. It currently trades around $12 territory, down close to 7% YTD. Potential investors who want to wager on the gaming industry could consider investing in IBET using a small part of their portfolio.
7 New ETFs: JPMorgan Equity Premium Income ETF (JEPI)
52-Week Range: $53.96 – $63.67
Dividend Yield: 8.73%
Expense Ratio: 0.35% per year
When market volatility increases, many investors look at funds that offer passive income. The next fund on our list is the JPMorgan Equity Premium Income ETF. It invests in large-capitalization (cap) U.S. shares and equity-linked notes (ELNs). The fund was first listed in May 2020.
The actively managed fund has 107 holdings. Healthcare is the largest sector with 12.3% of assets. Next are industrials (11.8%) and information technology (11.2%). Meanwhile, top 10 holdings account for around 16% of the net assets of $6.6 billion.
On Dec. 29, 2021, JEPI saw an ATH of $63.67, and returned 5% over the past year. In addition, the ETF price supports a generous dividend yield of over 8%. The fund currently hovers around $60 territory, down close to 5% YTD. We like the diversity of the fund, and believe it deserves your attention.
Pacer Global Cash Cows Dividend ETF (GCOW)
52-Week Range: $29.40 – $34.41
Dividend Yield: 3.95%
Expense Ratio: 0.60% per year
The Pacer Global Cash Cows Dividend ETF gives exposure to global large-cap companies which offer both high dividend payments and also have high free cash flow yields. Listed in February 2016, the fund tracks the Pacer Global Cash Cows Dividend Index.
The passively-managed ETF currently holds 101 stocks. Meanwhile, the top ten holdings comprise almost 22% of total net assets that is close to $220 million.
British American Tobacco (NYSE:BTI), Australian iron ore mining company Fortescue Metals Group (OTCMKTS:FSUGY), energy giant Exxon Mobil (NYSE:XOM), mining heavyweight Rio Tinto (NYSE:RIO), and oil major Shell (NYSE:SHEL) are among the top companies in the ETF.
Sector breakdown includes materials (18.2%), health care (18%), communication services (16.3%), consumer staples (15.4%), energy (15.4%), and some other industries with less exposure.
GCOW has gained 13% in the past 12 months and is up almost 6% YTD. The fund hit a 52-week high of $34.41 on Jan. 19.
Cash flows in the form of dividends can provide notable protection in an inflationary environment. Moreover, GCOW offers a juicy dividend yield of around 4%.
7 New ETFs: SonicShares Global Shipping ETF (BOAT)
52-Week Range: $24.49 – $33.39
Dividend Yield: 4.03%
Expense Ratio: 0.69% per year
According to the Organization for Economic Co-operation and Development (OECD), roughly 90% of the global trade is transported by sea freight. Given the recent supply chain issues, global shipping has been in the limelight.
Our last fund for today, the SonicShares Global Shipping ETF, offers a pure-play exposure to the international maritime shipping industry. The fund includes companies that transport goods and raw materials over the waves.
BOAT, which currently has 49 holdings, tracks the Solactive Global Shipping Index. The fund was first listed in August 2021, and net assets stand at $17.6 million.
Sub-sectors include Container Deep Sea and Offshore Shipping (63.7%), Dry Bulk Deep Sea and Offshore Shipping (17.7%), and Crude Oil Transportation (8.6%). Meanwhile, the top ten names account for almost half of the portfolio.
Companies in the fund mainly come from the U.S., Europe, Japan, and Hong Kong. Among the leading stocks are the Israel-based ZIM Integrated Shipping Services (NYSE:ZIM), Hong Kong-based Orient Overseas International (OTCMKTS:OROVY), Japanese Mitsui O.S.K. Lines (OTCMKTS:MSLOF), German Hapag-Lloyd (OTCMKTS:HPGLY), and Danish A.P. Moller-Maersk (OTCMKTS:AMKBY).
So far this year, BOAT has gained about 10% and hit a record high on Feb. 18. Maritime transport is indispensable for international trade. Therefore, BOAT is a bullish bet considering the growth projections of the global economy.
On the date of publication, Tezcan Gecgil did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.
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