Despite the current high levels of volatility on Wall Street, new exchange-traded funds (ETFs) continue to hit the market in astonishing numbers. In fact, according to Bloomberg, year-to-date numbers suggest 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 by Brown Brothers Harriman indicates that:
“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 in over 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 in size and have a poor trading history. It is therefore necessary to carry out a more thorough prior check.
1. Global X Green Building ETF
- Current price: $23.06
- 52 week range: $22.62 – $25.38
- Expense ratio: 0.45% per annum
Creating sustainable built environments is a priority for governments and private companies. The World Green Building Council (WorldGBC) states that:
“Green building practices…encompass the design, planning, construction, operation, and recycling or renewal at the end of a building’s life.”
According to forecasts, 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 development, management materials, technologies or services related to green buildings. The products and services of these companies generally increase the energy efficiency of buildings and reduce carbon. 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 the industrial sector (13.9%) and the consumer discretionary sector (4.6%).
Companies from Japan and the United States have the largest share, with 24% and 20% respectively. This is followed by stocks from France (11.7%), Singapore (8%), Hong Kong (7.3%), the United Kingdom (7.3%) and Finland (4.5%).
Major stocks include China Overseas Land & Investment, Finnish elevator and escalator group Kone Oyj (HE:), French electrical component maker Legrand (EPA:), Carrier Global (NYSE: ), which makes heating, ventilation and air conditioning (HVAC) and security products, and Singapore-based real estate investment trust (REIT) Capitaland Investment (SGX:).
GRNR stock is currently trading at $23, down more than 9% from the intraday high of $25.38 hit on April 19. Long-term investors who want to participate in the growth of the green building ecosystem could further research this fund.
2. AdvisorShares Managed Bitcoin Strategy ETF
- Current price: $19.44
- 52 week range: $18.98 – $26.26
- Expense ratio: 1.61% per annum
Cryptocurrencies have been under heavy pressure so far in 2022. For example, and 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 their desire 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, fixed income short term and cash. The fund manager coordinates the timing and amount of exposure to each asset class within the fund.
CRYP currently has three main holdings, namely ProShares Bitcoin Strategy ETF (NYSE:), Valkyrie Bitcoin Strategy ETF (NASDAQ:) and BlackRock. Liquidity Funds Treasury Trust Fund Institutional Shares (NASDAQ:TTTXX).
This actively managed fund began trading at the end of April, and its net assets do not exceed $1 million. CRYP might be of interest to readers who want to add some bitcoin exposure to their long-term portfolios. However, they should note the high expense ratio.