As much as 237 ETFs have been launched so far this year, taking the total count of available ETFs to 2,161 with an aggregate market cap of $2.80 trillion. The monumental growth in the ETF industry clearly hints at how the issuers are trying to come up with new concepts to draw investors’ attention.
For instance, no one takes interest in plain vanilla ETFs or market-cap weighted ETFs these days as products with several winning attributes designed to fight every type of market dynamics are coming on stream (read:
5 Picks to Ride on Smart Beta ETF Craze).
Issuers are in fact fine tuning every popular investment strategy to roll out products which are compatible with the ongoing market sentiments and are also likely to flourish over the long term. Against such a backdrop, it would be intriguing to take a look at which ETF ideas ruled the mind of issuers in 2016.
No investing area seems to be as appealing as dividend irrespective of the market conditions. Throughout 2016, we have seen a steady stream of product launches based on this strategy. While dividend appreciation ETFs like
Vanguard International Dividend Appreciation Index ETF VIGI, ProShares MSCI Emerging Markets Dividend Growers EMDV and Reality Shares Divcon Leaders Dividend ETF (LEAD) hit the market, high-dividend ETFs like Vanguard International High Dividend Yield Index ETF VYMI and Pacer Global High Dividend ETF PGHD also saw the light of the day. Apart from these, there were plenty of dividend-oriented products launched this year (read: 4 High Dividend ETFs Under $20). Low Volatility
Volatility has remained the only constant in the market in 2016. Probably this is why, issuers went ahead with the launches of low-volatility ETFs like
Natixis Seeyond International Minimum Volatility ETF MVIN, PowerShares S&P SmallCap High Dividend Low Volatility Portfolio (XSHD) and PowerShares DWA Momentum & Low Volatility Rotation Portfolio DWLV.
In fact, there was a flurry of high dividend low volatility ETFs launches this year, includingthe likes of
PowerShares S&P International Developed High Dividend Low Volatility ETF (IDHD), Legg Mason Low Volatility High Dividend ETF LVHD and Legg Mason International Low Volatility High Dividend ETF (LVHI). Environmental, Social and Governance (ESG)
The socially responsible or ESG-based investing theme has been much in vogue as well. Equities that are associated with social factors like low carbon emissions and righteous business practices come under the socially responsible theme (read:
Guide to Socially Responsible ETFs ).
It is believed that ESG-based products are profitable over the
long term. As per the source, lesser focus on environmental issues by the companies may result in lawsuits, fines and damages.
As a result, we have funds like
SPDR SSGA Gender Diversity Index ETF ( ), SHE FlexShares STOXX US ESG Impact ETF ESG, FlexShares STOXX Global ESG Impact ETF (ESGG), Global X Conscious Companies ETF (KRMA), Global X S&P 500 Catholic Values ETF CATH, Columbia Sustainable US Equity Inc ETF (ESGS) and many more. One can also see the surge in rollouts of fossil-fuel ETFs including SPDR MSCI Emerging Markets Fossil Fuel Free ETF (EEMX) and SPDR MSCI EAFE Fossil Fuel Free ETF EFAX (read: How to Invest 'Fossil-Free' with This New ETF?). Multi-Factor
Factor-based products have been quite a trend in 2016. Both iShares and John Hancock came up with a suite of multi-factor ETFs targeting several sectors. For example, the consumer staple sector has received two products this year, namely,
JHancock Multifactor Consumer Stapl ETF (JHMS) and iShares Edge MSCI Mltfctr Cnsmr Staples CNSF. Niche ETFs
Niche ETFs also gained precedence in 2016. Issuers have come up with products like
PureFunds Video Game Tech ETF GAMR, SPDR S&P Internet ETF (XWEB), USCF Restaurant Leaders Fund MENU and PureFunds Drone Economy Strategy ETF IFLY. Fixed Income
Corporate bond funds also attracted issuers’ attention as is evident from the launch of
IQ Enhanced Core Bond US ETF AGGE, IQ Enhanced Core Plus Bond US ETF (AGGP), WisdomTree Fundamental US Corporate Bond WFIG, WisdomTree Fundamental US Short-Term High Yield Corp Bond SFHY and iShares US Fallen Angels USD Bond (FALN) (read: 5 Successful New ETFs of 1H16).
Apart from these, issuers explored other arenas of the fixed-income world, having unveiled products like
SPDR DoubleLine Short Duration Total Return Tactical ETF STOT, SPDR DoubleLine Emerging Markets Fixed Income ETF (EMTL) and Guggenheim Total Return Bond ETF ( GTO Quick Quote GTO - Free Report) . Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>