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Stock Markets

10/06/22, 07:56

Smiling Young Businessman

Tezcan Gecgil

Tezcan Gecgil, Ph.D. has worked in investment management in New York City, Princeton (NJ), Greenwich (CT), and London (U.K.).

She holds a Ph.D. (Business Studies) as well as MSc (Investment Banking & Trading) MBA and BA (Economics) degrees from leading U.S. and U.K. universities and has also completed all 3 levels of the Chartered Market Technician (CMT) examination.

Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.

As she is also qualified as Clinical Hypnotherapist at the graduate level, she coaches traders and HNW investors on trading psychology.

She divides her time between Naples (FL) and London.

2 New Thematic ETFs That Offer Exposure To Emerging Investment Trends

Despite current high levels of volatility on Wall Street, new exchange-traded funds (ETFs) are still hitting the market in astonishing numbers. In fact, according to Bloomberg, year-to-date figures suggest new ETF launches are on their way to topping last year's historic boom.

Among the newcomers, numerous thematic funds give access to emerging investment themes. A recent survey by Brown Brothers Harriman says:

"84% of global ETF investors plan to increase their ETF allocations, a 12% from 2021 findings," and "38% of the respondents plan to allocate 11-20% of their portfolio to thematic ETFs over the next five years."

Today's article introduces two new funds that could help readers diversify their portfolios and benefit from the emerging market trends. We should, however, remind our readers that such new ETFs are typically small with little trading history. Therefore, further due diligence is necessary.

1. Global X Green Building ETF

  • Current Price: $23.06

  • 52-week range: $22.62 - $25.38

  • Expense ratio: 0.45% per year

Creating sustainable built environments is high on the agenda of governments and private enterprises. The World Green Building Council (WorldGBC) states that:

"green building practices… encompass a building's design, planning, construction, operations, and end-of-life recycling or renewal."

Forecasts suggest the global green building materials market could reach $635 billion by 2030. Such an increase would mean a compound annual growth rate (CAGR) of over 10%.

Therefore, first on today's list is the Global X Green Building ETF (NASDAQ:GRNR). It invests in businesses that derive at least half of their revenues from green building development, management materials, technologies, or services. Products and services such companies typically help increase energy efficiency in buildings and decrease carbon. The fund was launched in April 2022 and has only $2.4 million in net assets.

GRNR has 74 holdings, where the top 10 comprise over a third of the portfolio. Over 80% of the companies come from the real estate sector (80%), followed by industrials (13.9%) and consumer discretionary (4.6%).

Meanwhile, businesses from Japan and the US have the largest share, with 24% and 20%, respectively.

Then come stocks from France (11.7%), Singapore (8%), Hong Kong (7.3%), the UK (7.3%), and Finland (4.5%).

Leading names include China Overseas Land & Investment; Finnish elevator and escalator group Kone Oyj (HE:KNEBV); French electrical components producer Legrand (EPA:LEGD); Carrier Global (NYSE:CARR), which manufactures heating, ventilation, and air-conditioning (HVAC) as well as security products; and Singapore-based real estate investment trust (REIT) Capitaland Investment (SGX:CAPN).

GRNR is currently trading at $23 territory, down more than 9% from its Apr. 19 intraday record high of $25.38. Long-term investors wishing to participate in the growth of the green building ecosystem could research the fund further.

2. AdvisorShares Managed Bitcoin Strategy ETF

  • Current Price: $19.44

  • 52-week range: $18.98 - $26.26

  • Expense ratio: 1.61% per year

Cryptocurrencies have come under significant pressure so far in 2022. For instance, Bitcoin and Ethereum have lost around 35% and 51%, respectively.

Yet, despite the current uncertainty in the digital asset space, a recent study revealed that of the 600 financial advisors surveyed, 46% were interested in investing in crypto equities, such as Coinbase Global (NASDAQ:COIN). Similarly, nearly 45% indicated a desire to invest directly in crypto assets like Bitcoin.

Next up on today's list is the AdvisorShares Managed Bitcoin Strategy ETF (NYSE:CRYP), which invests in US-listed ETFs that focus on Bitcoin futures, short-duration fixed income securities, and cash. The fund manager coordinates the timing and amount of exposure to each asset class within the fund.

CRYP currently has three main holdings, namely the ProShares Bitcoin Strategy ETF (NYSE:BITO); the Valkyrie Bitcoin Strategy ETF (NASDAQ:BTF); and the BlackRock Liquidity Funds Treasury Trust Fund Institutional Shares (NASDAQ:TTTXX).

This actively-managed fund started trading in late April, and net assets are only shy of $1 million. CRYP could appeal to readers who want to add some Bitcoin exposure to their long-term portfolios. However, they should note the high expense ratio.

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