Displaying items by tag: ETFs

Cboe Global Markets has listed five spot Ethereum ETFs set to begin trading in the US on July 23, 2024. Following the SEC's approval of Bitcoin ETFs earlier this year, market participants are eager for the new Ethereum ETFs.

 With Ethereum's market cap second only to Bitcoin, issuers such as Fidelity, iShares, Bitwise, VanEck, 21Shares, Invesco Galaxy, Franklin Templeton, and Grayscale have already listed Bitcoin ETFs and are now expanding to Ethereum. 

This move marks a significant milestone for institutional and retail crypto investments, reflecting growing global interest in cryptocurrency ETFs.

Finsum: Cryptos will be powered by its ability to enter more mainstream financial products over the coming decade. 

WisdomTree has partnered with Trading 212 to introduce six ETF model portfolios, allowing UK and European retail investors to access pre-built core and thematic portfolios through the Trading 212 app. 

The three core portfolios—Conservative, Moderate, and Aggressive—offer diversified exposure to equities, bonds, and commodities. Additionally, investors can choose from Multi-Thematic, Tech, and Environmental thematic portfolios. 

This collaboration aims to simplify portfolio building for retail investors by leveraging WisdomTree's institutional expertise to help meet long-term investment goals. Trading 212 manages £4bn in client assets with 3 million funded accounts.

Finsum: Thematic models might be a way to get into technology as it’s poised to rally with interest rates settled or about to be cut. 

Vanguard’s low-cost ETFs are immensely popular, with options like Vanguard Total Stock Market ETF and Vanguard S&P 500 ETF leading the pack. However, there are other notablev ETFs that can enhance your portfolio if you venture beyond these well-known choices:

VBR, a Gold-rated ETF, focuses on small-cap value stocks and charges an exceptionally low 0.07% expense ratio. This ETF has consistently outperformed its category peers, despite small-cap value funds being out of favor for many years.

BNDX, a Silver-rated ETF, offers exposure to the global bond market, complementing a U.S.-heavy bond allocation. It invests in a diverse portfolio of foreign investment-grade bonds, hedging against currency risk, with an equally low expense ratio of 0.07%.

Finally, VT provides exposure to nearly 10,000 stocks worldwide, including U.S., foreign, and emerging markets, making it one of the broadest stock ETFs available. With its diverse mix, it can serve as a comprehensive, standalone stock investment for long-term portfolios.

Finsum: The last one to consider might be a momentum fund as interest rates drop and growth picks up. 

Active ETFs have surged in popularity, dominating new launches, inflows, and headlines in the ETF market. At the 2024 Morningstar Investment Conference, industry experts discussed how active ETFs are reshaping the investment landscape.

Nicole Hunter from Dimensional Fund Advisors highlighted DFA’s aggressive entry into active ETFs, converting $30 billion from mutual funds and now holding over $140 billion in assets across 38 active ETFs. T. Rowe Price noted that although active ETFs account for only 5% of ETF assets, they represent 70% of recent launches.

 Despite their growth, active ETFs also face a high closure rate, with over 100 shutting down last year. The panelists discussed the benefits of ETFs, including tax efficiency and transparency, while also acknowledging that traditional mutual funds still have their place in the market.

Finsum: Some volatility is hard to read but both geopolitical and interest rates are relatively easy to capitalize on for active funds. 

Buffer ETFs have grown rapidly since 2018, now totaling 159 with nearly $38 billion in assets. They attract financial advisors by offering downside protection for the first 10% to 15% of losses while allowing market gains, making them popular during volatile periods like 2022.

Experts point out that these ETFs are easier to rebalance and offer daily liquidity compared to structured notes and annuities. However, buffer ETFs cap potential gains, limiting profits when the market rises, and their performance can be affected by market timing.

They typically have a defined 12-month outcome period, and buying or selling mid-series can negate initial protections and caps. Despite their benefits, buffer ETFs have higher fees and might not pay dividends, making them less suitable for long-term investors compared to direct equity investments.

Finsum: Sometimes it’s worth paying higher fees or sacrificing a little alpha to hedge some volatility