ETF Investing
In an effort to shed more light on some of the more compelling products to hit the Street over the years, we’ve highlighted 25 unique ETFs that warrant a closer look from anyone looking to diversify their portfolio:
25. Cambria Shareholder Yield ETF (SYLD )
- Launched: 5/14/2013
- Expense Ratio: 0.59%
- Investment Thesis (In a Nutshell): This fund is comprised of companies that return free cash flow to shareholders, not just through dividends but also through share repurchases and debt repayments.
24. Spin-Off ETF (CSD )
- Launched: 12/15/2006
- Expense Ratio: 0.66%
- Investment Thesis (In a Nutshell): This ETF offers an easy and cost-efficient way to gain exposure to domestic and foreign companies that have been spun-off within the last two years.
23. The Forensic Accounting ETF (FLAG )
- Launched: 1/30/2013
- Expense Ratio: 0.85%
- Investment Thesis (In a Nutshell): This ETF offers exposure to the S&P 500 Index with a twist – the fund excludes companies with financial “red flags,” including those with aggressive revenue recognition practices.
22. IPOX-100 Index Fund (FPX )
- Launched: 4/12/2006
- Expense Ratio: 0.60%
- Investment Thesis (In a Nutshell): This ETF targets companies that have recently undergone an Initial Public Offering (IPO) and have been trading less than 1,000 days on the market.
21. U.S. Market Neutral Anti-Beta Fund (BTAL )
- Launched: 9/13/2011
- Expense Ratio: 0.99%
- Investment Thesis (In a Nutshell): This fund allows investors to make a bearish bet on U.S. equity markets without actually opening a short position; the underlying methodology allows the ETF to profit as long as low-beta stocks are outperforming their high-beta counterparts.
20. IQ Merger Arbitrage ETF (MNA )
- Launched: 11/17/2009
- Expense Ratio: 0.77%
- Investment Thesis (In a Nutshell): This fund follows a strategy that looks to invest in domestic and foreign companies for which there has been an announcement of a takeover.
19. Barclays ETN+ S&P VEQTOR (VQT )
- Launched: 8/31/2010
- Expense Ratio: 0.95%
- Investment Thesis (In a Nutshell): This fund utilizes a dynamic strategy to allocate exposure across large cap U.S. equities, volatility futures, and cash, depending on the current market environment.
18. All Cap Insider Sentiment Shares (KNOW )
- Launched: 12/8/2011
- Expense Ratio: 0.65%
- Investment Thesis (In a Nutshell): This ETF employs a quantitative methodology to select securities with the most favorable insider sentiment, as tracked by stock purchases and increases in holdings by company insiders.
17. TrimTabs Float Shrink ETF (TTFS )
- Launched: 10/5/2011
- Expense Ratio: 0.99%
- Investment Thesis (In a Nutshell): This ETF follows a liquidity-based investment approach that focuses on stocks with a decreasing number of outstanding shares that also boast improving fundamentals.
16. MSCI Emerging Markets Equity Fund (DBEM )
- Launched: 6/9/2011
- Expense Ratio: 0.65%
- Investment Thesis (In a Nutshell): This fund provides exposure to a broad universe of emerging markets equities with a twist – DBEM mitigates foreign currency-risk through the use of derivatives, making it easy to invest abroad while maintaining U.S. dollar-denominated exposure.
15. Madrona Forward International ETF (FWDI )
- Launched: 6/21/2011
- Expense Ratio: 1.25%
- Investment Thesis (In a Nutshell): This ETF offers exposure to a basket of global equities but doesn’t adhere to a traditional market capitalization-weighted methodology; instead, FWDI relies on a proprietary weighting approach that is more concerned with a company’s future earnings and not its market cap.
14. Pring Turner Business Cycle ETF (DBIZ )
- Launched: 12/28/2012
- Expense Ratio: 1.61%
- Investment Thesis (In a Nutshell): This fund relies on a sector rotation strategy designed to overweight the asset classes that are best positioned for outperformance during each of the stages of the business cycle.
13. Top Guru Holdings Index ETF (GURU )
- Launched: 6/4/2012
- Expense Ratio: 0.75%
- Investment Thesis (In a Nutshell): This ETF tracks a dynamic benchmark that looks to replicate the top equity holdings of the biggest hedge fund managers as tracked by official SEC filings.
12. KLD 400 Social Index Fund (DSI )
- Launched: 11/14/2006
- Expense Ratio: 0.50%
- Investment Thesis (In a Nutshell): This fund offers a more “ethical” way to access the U.S. large cap equity universe; DSI looks to include companies that best exhibit positive environmental, social, and governance characteristics.
11. Accuvest Global Opportunities ETF (ACCU )
- Launched: 1/26/2012
- Expense Ratio: 1.81%
- Investment Thesis (In a Nutshell): This actively-managed ETF offers exposure to global markets by selecting countries that are positioned for outperformance using a proprietary multi-factor ranking model.
10. Permanent ETF (PERM )
- Launched: 2/7/2012
- Expense Ratio: 0.49%
- Investment Thesis (In a Nutshell): This ETF provides exposure to various core asset classes, including stocks, bonds, and precious metals; this strategy is designed to hold up during any sort of economic environment.
9. EcoLogical Strategy (HECO )
- Launched: 6/20/2012
- Expense Ratio: 0.95%
- Investment Thesis (In a Nutshell): This fund delivers targeted exposure to firms that are deemed to be favorably positioned to benefit from the growing eco-friendliness trend.
8. US Large Cap Alternator ETN (ALTL )
- Launched: 9/6/2012
- Expense Ratio: 1.00%
- Investment Thesis (In a Nutshell): This ETF offers exposure to U.S. large caps with a twist; relying on a relative strength-based strategy, this fund switches exposure to either the S&P 500 Total Return Index, the S&P 500 Low Volatility Total Return Index, or the S&P 500 Equal Weight Total Return Index.
7. Harvest CSI China A-Shares Fund (ASHR )
- Launched: 11/6/2013
- Expense Ratio: 0.82%
- Investment Thesis (In a Nutshell): This fund offers direct access to the China A-shares market, which has long been very difficult for foreign investors to access; the underlying assets include mainland Chinese equities, and not the firms found in most other China ETFs.
6. Nashville Area (NASH )
- Launched: 8/1/2013
- Expense Ratio: 0.49%
- Investment Thesis (In a Nutshell): This city-focused fund offers hyper-targeted exposure to publicly traded companies that are headquartered in Nashville, Tennessee.
5. Equal Risk Weighted Large Cap ETF (ERW )
- Launched: 7/31/2013
- Expense Ratio: 0.65%
- Investment Thesis (In a Nutshell): This ETF offers an alternative to the traditional market-cap weighted approach; ERW uses a proprietary methodology that weighs each underlying security based on its individual risk, rather than its market capitalization.
4. Horizons S&P 500 Covered Call ETF (HSPX )
- Launched: 6/24/2013
- Expense Ratio: 0.65%
- Investment Thesis (In a Nutshell): This ETF offers access to the S&P 500 Index with a twist – HSPX uses a covered-call strategy that allows it to generate additional income thereby reducing downside volatility when market conditions turn unfavorable.
3. Barron’s 400 ETF (BFOR )
- Launched: 6/4/2013
- Expense Ratio: 0.65%
- Investment Thesis (In a Nutshell): This fund provides exposure to America’s “most promising stocks” as the underlying index, the Barron’s 400, is comprised of the highest rated companies based on growth, valuation, and profitability.
2. Market Vectors BDC Income ETF (BIZD )
- Launched: 2/11/2013
- Expense Ratio: 8.33%
- Investment Thesis (In a Nutshell): This ETF allows investors to access a corner of the private equity market by providing exposure to a portfolio of business development companies, which are firms that invest in and lend money to growing businesses that are still far from being publicly-traded.
1. International BuyBack Achievers Portfolio (IPKW )
- Launched: 2/27/2014
- Expense Ratio: 0.55%
- Investment Thesis (In a Nutshell): This fund offers an international twist on the “buyback” strategy popularized by PKW; the underlying portfolio is comprised of companies that have reduced their number of shares outstanding by 5% or more over the past year through share repurchases.
The Bottom Line
As the ETF universe continues to expand, investors ought to take time to look under the hood of new offerings that don’t fit the “plain-vanilla” wrapper. While it’s true that most investors will opt for traditional index-based funds given their simplicity and cost-efficiency, there are dozens of offerings out there that might actually be a better fit for your portfolio if you take the time to uncover them.
Follow me on Twitter @SBojinov
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Disclosure: No positions at time of writing.
