This was a big year for new exchange-traded funds, or ETFs, the popular investments that make it easy to buy a basket of stocks, cryptocurrencies or other assets.
Numerous bitcoin ETFs launched in 2021, with more likely in 2022. Several experts even predict that there could be new ETFs for ethereum and other cryptocurrencies.
Expect even more esoteric funds to launch as well.
Fund company Defiance just debuted a new digital revolution ETF geared towards companies that are doing more business with non-fungible tokens, or NFTs, the digital assets stored on a blockchain that have become popular in the art and collectibles world.
Other passively run ETFs based on indexes continue to remain popular. Ark Invest’s Cathie Wood just launched a new fund tied to an index of companies that score well for corporate transparency.
Ark also has a family of actively run ETFs, where managers pick individual stocks or other assets instead of relying on indexes.
More actively managed ETFs to rival passive index funds
Natixis Investment Managers said in a recent report that it expects the amount of assets in actively run ETFs to double in 2022 from this year. And more companies are looking to launch actively managed ETFs that focus on niche sectors of the stock market.
Fund firm VanEck, one of the asset managers that recently launched a bitcoin futures ETF, also has a new actively run ETF geared towards agricultural technology.
That fund, named the VanEck Future of Food ETF, has the quirky ticker symbol YUMY and owns shares of companies like indoor farming firm AppHarvest, plant-based milk producer Oatly and tractor maker Deere.
There should be more active international ETF launches, too.
Mutual fund giant Vanguard said late last month that it plans to introduce a China Select Stock Fund, which will buy shares of companies based in the world’s second-largest economy and won’t be based on an index.
“An active approach to investing in China, coupled with the ability to invest in a wide range of both onshore and offshore Chinese equities, will provide the fund’s portfolio managers flexibility to help navigate the dynamics of potential market constraints and a rapidly shifting geopolitical landscape,” Vanguard said in a news release.
The ETF boom is likely to continue fueling strong gains for the big financial firms that dominate the market. Along those lines, shares of iShares owner BlackRock, SPDR ETF provider State Street and top fund manager Invesco are each up about 30% so far this year.
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