Despite the current high levels of volatility on Wall Street, new exchange-traded funds (ETFs) are still hitting the market in astonishing numbers. In fact, according to Bloomberg, year-to-date numbers suggest that new ETF launches are on track to outpace last year’s historic boom.
Among the newcomers, many thematic funds provide access to emerging investment themes. A recent survey of Brown Harriman Brothers said:
“84% of global ETF investors plan to increase their ETF allocations, up 12% from 2021 results” and “38% of respondents plan to allocate 11-20% of their portfolio to thematic ETFs over the for the next five years”.
Today’s article features two new funds that could help readers diversify their portfolios and take advantage of emerging market trends. However, we must remind our readers that these new ETFs are generally small with little trading history. Therefore, additional due diligence is required.
1. Global X Green Building ETF
- Current price: $23.06
- 52 week range: $22.62 – $25.38
- Spending rate: 0.45% per year
Creating sustainable built environments is high on the agenda of governments and private companies. The World Green Building Council (WorldGBC) declares that:
“Green building practices…encompass the design, planning, construction, operation and recycling or renewal at the end of a building’s life.”
Forecasts suggest that the global market for green building materials could reach $635 billion by 2030. Such an increase would mean a compound annual growth rate (CAGR) of more than 10%.
Therefore, first on today’s list is the Global X Green Building ETF (NASDAQ:). It invests in companies that derive at least half of their revenue from the development of green buildings, management materials, technologies or services. The products and services of these companies generally contribute to increasing the energy efficiency of buildings and reducing carbon emissions. The fund was launched in April 2022 and has only $2.4 million in net assets.
GRNR has 74 holdings, of which the top 10 represent more than a third of the portfolio. More than 80% of companies come from the real estate sector (80%), followed by industrials (13.9%) and consumer discretionary (4.6%).
Meanwhile, companies from Japan and the United States hold the largest share, with 24% and 20%, respectively. Next come stocks from France (11.7%), Singapore (8%), Hong Kong (7.3%), the United Kingdom (7.3%) and Finland (4.5%).
Major names include Land and Overseas Investment in China; Finnish elevator and escalator group Kone Oyj (HE:); French manufacturer of electrical components Great (EPA:); Global Carrier (NYSE:), which manufactures heating, ventilation and air conditioning (HVAC) products as well as security products; and Singapore-based real estate investment trust (REIT) Capital and investment (SGX:).
GRNR is currently trading at $23, down more than 9% from its April 19 intraday high of $25.38. Long-term investors wishing to participate in the growth of the green building ecosystem could further research the fund.
2. AdvisorShares Managed Bitcoin Strategy ETF
- Current price: $19.44
- 52 week range: $18.98 – $26.26
- Spending rate: 1.61% per year
Cryptocurrencies have come under significant pressure so far in 2022. For example, they have lost around 35% and 51%, respectively.
Yet despite the current uncertainty in the digital asset space, a recent study found that of 600 financial advisors surveyed, 46% were interested in investing in crypto stocks, such as Coinbase global (NASDAQ:). Similarly, nearly 45% indicated they want to invest directly in crypto assets like Bitcoin.
Next on today’s list is the AdvisorShares Managed Bitcoin Strategy ETF (NYSE:), which invests in US-listed ETFs that focus on bitcoin futures, short-term fixed income securities and cash. The fund manager coordinates the timing and amount of exposure to each asset class within the fund.
CRYP currently holds three main holdings, namely the ProShares Bitcoin Strategy ETF (NYSE:); the Valkyrie Bitcoin Strategy ETF (NASDAQ:); and the BlackRock Liquidity Funds Treasury Trust Fund Institutional Equity (NASDAQ: TTTXX).
This actively managed fund started trading at the end of April and the net assets are only less than $1 million. CRYP might appeal to readers looking to add Bitcoin exposure to their long-term portfolios. However, they should note the high expense ratio.