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The ETF industry is seeing explosive growth in terms of both AUM and launches, thanks to the rise in "thematic investing” and craze for “smart beta”. It has seen 183 launches and 106 closures so far this year, taking the total number of ETFs to 2,318 and total assets to nearly $4 trillion in the U.S. market (read: U.S. ETFs Hit $4 Trillion in AUM: 4 Reasons Behind the Boom).
The rapid growth can be attributed to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and most importantly — low cost. Additionally, both existing and new issuers are active in bringing innovative products to the market, carving a highly specialized theme (or niche investment) and focusing on a narrow corner.
Below we highlight six ETFs that have been able to pull in more than $200 million in AUM and have huge potential to dominate the market in the coming months.
This is the most popular entrant of this year so far. It has amassed more than $1.5 billion in AUM since May 7. It offers access to the highest ESG rated large- and mid-cap US stocks within their industry. It follows the MSCI USA Extended ESG Leaders Index and holds 324 stocks in its basket with large concentration on the top firm with 7.6% allocation. Other firms hold less than 3% share. Sector-wise, information technology takes the largest share at 22.4% while healthcare, financials and communications round off the next two spots with double-digit exposure each. The fund charges an annual fee of 10 bps and trades in a heavy volume of 112,000 shares a day on average (read: 6 ESG ETFs Close to or Above the $1B Asset Mark).
This fund has amassed $1.4 billion in AUM since its debut on Mar 7. It follows the MSCI USA ESG Leaders Index, holding 325 securities in its basket with each making up for less than 7.7% of assets. Information technology is the top sector accounting for 28.6% share while consumer discretionary, healthcare and financials round off the next three spots. The fund charges 10 bps in fees per year and trades in average daily volume of 252,000 shares.
This is an actively managed ETF providing broad exposure to U.S. investment grade bonds. Holding 125 bonds in its basket, it has average maturity of 7.50 years and average duration of 5.63 years. U.S. Treasuries account for 31.3% of the assets while other and agencies make up for 28.8% and 25.3% respectively. The fund has gathered more than $540 million in its asset base since its debut on Sep 17 and trades in heavy average daily volume of about 2.8 million shares. It charges 15 bps in annual fees and expenses (read: Is it the Right Time to Buy Bond ETFs? Let's Explore).
This ETF debuted on Apr 12 and has accumulated around $454.7 million in its asset base. It seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware. The fund tracks the Indxx Global Cloud Computing Index, holding 37 securities in its basket with none accounting for no more than 6% share. It charges 68 bps in annual fees and trades in good volume of about 415,000 shares per day on average.
This ETF seeks to provide passive exposure to high income, listed real asset securities by tracking the Indxx Real Asset Income Index, which comprises income-producing, U.S. equity securities across three real asset categories: real estate, natural resources, and infrastructure. It holds 86 stocks in its basket with each accounting for less than 1.3% of the assets. The product charges 55 bps in annual fees and trades in average daily volume of 32,000 shares. It has accumulated $233.8 million in its asset base since its inception on Feb 7 (read: 5 Successful New ETFs of 1H).
This fund seeks to deliver an alternative source of yield to traditional fixed income by focusing on the private credit market. It tracks the Indxx Private Credit Index, which provides passive exposure to listed instruments that emphasize private credit, including business development companies (BDCs) and closed-end funds (CEFs). It has gathered assets worth $202.7 million since its debut on Feb 7. VPC is the most expensive product in the ETF world with expense ratio of 7.64%. Additionally, it trades in a lower average daily volume of 30,000 shares, which increases the cost of trading beyond the expense ratio.
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6 Most Successful ETF Launches YTD
The ETF industry is seeing explosive growth in terms of both AUM and launches, thanks to the rise in "thematic investing” and craze for “smart beta”. It has seen 183 launches and 106 closures so far this year, taking the total number of ETFs to 2,318 and total assets to nearly $4 trillion in the U.S. market (read: U.S. ETFs Hit $4 Trillion in AUM: 4 Reasons Behind the Boom).
The rapid growth can be attributed to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and most importantly — low cost. Additionally, both existing and new issuers are active in bringing innovative products to the market, carving a highly specialized theme (or niche investment) and focusing on a narrow corner.
Below we highlight six ETFs that have been able to pull in more than $200 million in AUM and have huge potential to dominate the market in the coming months.
iShares ESG MSCI USA Leaders ETF (SUSL - Free Report)
This is the most popular entrant of this year so far. It has amassed more than $1.5 billion in AUM since May 7. It offers access to the highest ESG rated large- and mid-cap US stocks within their industry. It follows the MSCI USA Extended ESG Leaders Index and holds 324 stocks in its basket with large concentration on the top firm with 7.6% allocation. Other firms hold less than 3% share. Sector-wise, information technology takes the largest share at 22.4% while healthcare, financials and communications round off the next two spots with double-digit exposure each. The fund charges an annual fee of 10 bps and trades in a heavy volume of 112,000 shares a day on average (read: 6 ESG ETFs Close to or Above the $1B Asset Mark).
MSCI USA ESG Leaders Equity ETF (USSG - Free Report)
This fund has amassed $1.4 billion in AUM since its debut on Mar 7. It follows the MSCI USA ESG Leaders Index, holding 325 securities in its basket with each making up for less than 7.7% of assets. Information technology is the top sector accounting for 28.6% share while consumer discretionary, healthcare and financials round off the next three spots. The fund charges 10 bps in fees per year and trades in average daily volume of 252,000 shares.
Franklin Liberty U.S. Core Bond ETF (FLCB - Free Report)
This is an actively managed ETF providing broad exposure to U.S. investment grade bonds. Holding 125 bonds in its basket, it has average maturity of 7.50 years and average duration of 5.63 years. U.S. Treasuries account for 31.3% of the assets while other and agencies make up for 28.8% and 25.3% respectively. The fund has gathered more than $540 million in its asset base since its debut on Sep 17 and trades in heavy average daily volume of about 2.8 million shares. It charges 15 bps in annual fees and expenses (read: Is it the Right Time to Buy Bond ETFs? Let's Explore).
Global X Cloud Computing ETF (CLOU - Free Report)
This ETF debuted on Apr 12 and has accumulated around $454.7 million in its asset base. It seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware. The fund tracks the Indxx Global Cloud Computing Index, holding 37 securities in its basket with none accounting for no more than 6% share. It charges 68 bps in annual fees and trades in good volume of about 415,000 shares per day on average.
Virtus Real Asset Income ETF (VRAI - Free Report)
This ETF seeks to provide passive exposure to high income, listed real asset securities by tracking the Indxx Real Asset Income Index, which comprises income-producing, U.S. equity securities across three real asset categories: real estate, natural resources, and infrastructure. It holds 86 stocks in its basket with each accounting for less than 1.3% of the assets. The product charges 55 bps in annual fees and trades in average daily volume of 32,000 shares. It has accumulated $233.8 million in its asset base since its inception on Feb 7 (read: 5 Successful New ETFs of 1H).
Virtus Private Credit Strategy ETF (VPC - Free Report)
This fund seeks to deliver an alternative source of yield to traditional fixed income by focusing on the private credit market. It tracks the Indxx Private Credit Index, which provides passive exposure to listed instruments that emphasize private credit, including business development companies (BDCs) and closed-end funds (CEFs). It has gathered assets worth $202.7 million since its debut on Feb 7. VPC is the most expensive product in the ETF world with expense ratio of 7.64%. Additionally, it trades in a lower average daily volume of 30,000 shares, which increases the cost of trading beyond the expense ratio.
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 >>