By Mark DeCambre
Hello, there. We’re baack! And so is market volatility. Where can you take cover in exchange-traded funds amid all this carnage? How has the year been so far for ETFs? We’ll discuss all those things and more in our first issue back since Thanksgiving and the start of the final month of 2021.
You know the drill: Send tips, or feedback, and find me on Twitter at @mdecambre or LinkedIn , as some of you are wont to do, to tell me what we need to be jumping on.
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|Top 5 gainers of the past week||%Performance|
|Vanguard Extended Duration Treasury ETF /zigman2/quotes/205711909/composite EDV||6.4|
|iShares 20+ Year Treasury Bond ETF /zigman2/quotes/206026314/composite TLT||4.9|
|SPDR Portfolio Long Term Treasury ETF /zigman2/quotes/209443811/composite SPTL||4.6|
|Vanguard Long-Term Treasury ETF /zigman2/quotes/201457689/composite VGLT||4.6|
|iShares 10-20 Year Treasury Bond ETF /zigman2/quotes/207703790/composite TLH||3.8|
|Source: FactSet, through Wednesday, Dec. 1, excluding ETNs and leveraged products . Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greate r|
…and the bad
|Top 5 decliners of the past week||% Performance|
|United States Oil Fund LP /zigman2/quotes/203483736/composite USO||-14.8|
|United States Natural Gas Fund LP /zigman2/quotes/205527422/composite UNG||-9.9|
|iShares GSCI Commodity Dynamic Roll Strategy ETF /zigman2/quotes/208581139/composite COMT||-9.5|
|iShares MSCI Chile ETF /zigman2/quotes/205935893/composite ECH||-9.3|
|Invesco DB Commodity Index Tracking Fund /zigman2/quotes/205569319/composite DBC||-8.9|
A bumper year for ETFs
CFRA’s Todd Rosenbluth tells us that demand for ETFs hasn’t abated amid the recent bout of volatility that has gripped the market, even before the omicron worries took choppy market action to a new level.
Rosenbluth notes that ETFs thus far in 2021, through the end of November, have attracted about $800 billion in new money. That is a stunning figure that crushes the old record of $504 billion, set last year — and we still have nearly an entire month to go. The current tally means that net inflows in ETFs were about $72 billion a month.
“Equity ETFs represent 79% of the ETF market and have been extremely popular in 2021, but fixed income ETFs have pulled in a strong 23% share of net inflows through the first 11 months,” says Rosenbluth, who heads up mutual fund and ETF research.
The analyst notes that fund provider Vanguard delivered the greatest number of funds among the top 10 providers, BlackRock’s /zigman2/quotes/207946232/composite BLK -1.04% iShares drew the most money.
“While Vanguard has had six of the 10 most popular ETFs to purchase in 2021, led by Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF… iShares had the most funds cross the $1 billion market,” Rosenbluth writes.
ETF expert Marc Knowles, director at Alpha FMC — an asset management consulting firm that works with 90% of the top 20 global asset managers by assets under management — says that he is advising such managers to adopt an ETF strategy.
Much of the growth in the ETF industry has come amid the boom in actively managed ETFs, the emergence of nontransparent vehicles and a raft of outright conversions of mutual funds into ETFs.
The ETF in the fridge
Precision farming, innovation around meats and non-meat creations are among some of the key elements of what some describe as the future of food. The trend is something that probably would have gotten Thomas Malthus pretty excited and now we’re looking at a new ETF that focuses on the subsector.
The folks at VanEck is kicking off the VanEck Future of Food ETF, with the ticker symbol YUMY, on the Intercontinental Exchange- /zigman2/quotes/209108507/composite ICE +0.75% owned New York Stock Exchange’s Arca platform.
The actively managed fund carries and expense ratio of 0.65%, which translates to a an annual cost of $6.50 for every $1,000 invested. Some of its biggest holdings will include alternative milk provider Oatly Group AB /zigman2/quotes/226726562/composite OTLY -0.83% , as well as Corteva Inc. /zigman2/quotes/212512039/composite CTVA +0.18% , an agricultural innovation company that was spun out of DowDuPont, as well as Givaudan /zigman2/quotes/204856375/delayed GVDNY +1.40% , a Swiss-based maker of flavors and fragrances, and Westchester, Ill.-based Ingredion Inc /zigman2/quotes/202017256/composite INGR +1.81% ., which develops modified starches, among sugars.
ETF for NFTs? Ofc!
There are plenty of ETFs pegged to crypto and blockchain but Defiance ETFs is targeting the much narrower segment of digital assets: nonfungible tokens, or NFTs. Sylvia Jablonski, co-founder and Chief Investment Officer of Defiance declared that NFTs “could be bigger than the internet.”