Exchange Conference Showcases Vegan and Vice ETFs
The exchange-traded fund (ETF) industry is going gangbusters. In 2021, the industry launched 462 ETFs, a 43% surge over the 323 launched in 2020, according to Morningstar. With a total of 2,884 U.S ETFs and other exchange-traded products (ETPs) at the end of 2021, the funds launched over the past two years make up more than one-quarter of all trading ETFs.
So far this year, as of April 18, 2022, 119 ETFs have launched, said Morningstar. Many track very specialized market niches. At the recent “Exchange: An ETF Experience” conference in Miami Beach, Florida, many sponsors that launched ETFs over the past 24 months presented their wares. Here are some interesting ETFs that were presented at the conference.
- The market for exchange-traded funds (ETFs) continues to grow rapidly, with sponsors continuously launching innovative funds.
- At the recent “Exchange: An ETF Experience” conference, ETF sponsors presented funds that they have launched ETFs over the past 24 months.
- New funds to keep an eye on include ETFs tracking plant-based foods, sin stocks, residential real estate, and ecommerce in India.
VegTech Plant-based Innovation & Climate ETF (EATV)
The VegTech Plant-based Innovation & Climate ETF (EATV) is an actively managed fund focused on the shift occurring in the global food supply system. In an effort to positively affect climate change and food security across the globe, it primarily invests in companies involved in the creation of animal-free, alternative-protein products made with plants and plant-derivates.
The alternative protein market is expected to reach $290 billion by 2035, according to Boston Consulting Group. Meticulous Research said in 2021 that the alternative protein market is expected to grow at a compound annual growth rate (CAGR) of 12.4% from 2022 through 2029, reaching $36.61 billion by 2029.
Launched in December 2021, this all-capitalization global portfolio holds 40 stocks spread out among plant-based food and beverage firms (58%); agricultural technology and science (18%); plant-based materials, climate, and other (14%); and cultivated meat and precision fermentation (7%). EATV’s expense ratio is 0.75%.
B.A.D. ETF (BAD)
The BAD Investment Company launched the B.A.D. ETF (BAD) in December 2021. The name is not a comment on the advisor’s investing skills but rather a play on the market segments it tracks. B.A.D. stands for betting (casinos, gaming, and online gaming companies); alcohol/cannabis (alcoholic beverage manufacturers and distributors, along with cannabis companies); and drugs (pharmaceutical and biotechnology companies).
This large-cap fund falls says that it’s an antidote to the proliferation of environmental, social, and governance (ESG) funds hitting the market. The fund is good for recessionary times because people need to keep taking pharmaceuticals no matter the economy, and alcohol is a defensive sector, according Tommy Mancuso, president and founder of the Bad Investment Company. It holds 57 stocks and charges an expense ratio of 0.75%.
Home Appreciation U.S. REIT ETF (HAUS)
The Home Appreciation U.S. REIT ETF (HAUS), the first actively managed, pure-play ETF that invests in U.S. residential real estate investment trusts (REITs), hopes to capture the upside from the current national housing shortage. These companies derive their revenue from ownership and/or management of residential properties.
“In times of rising rates and inflation, REITs have historically outperformed the stock market,” said David Auerbach, managing director at the fund’s sponsor, Armada ETF Advisors. That’s because REITs are required to distribute at least 90% of their taxable income to their shareholders annually.
As of March 31, the fund, which launched in February, reported a 30-day SEC yield of 1.88%. The expense ratio is 0.6%.
India Internet & Ecommerce ETF (INQQ)
The India Internet & Ecommerce ETF (INQQ) seeks to track the growth of the India’s growing middle class that is purchasing smartphones and gaining affordable access to shopping on the internet. This fund of mostly mid-cap stocks launched April 6 and has an expense ratio of 0.86%.
“India is the third-largest economy and fastest-growing major economy on the globe,” said Kevin T. Carter, founder and chief investment officer of EMQQ Global, the fund’s sponsor. “We expect 30% growth in retail internet sales over the next 12 months.”
The Bottom Line
The ETF market continues to grow at a fast pace. Many of the new funds being launched track market segments previously not available as ETFs. For investors looking to invest in market segments that may not correlate closely to the broader U.S. stock market, some of the latest releases deserve a look.