The ETF industry continues to grow exponentially, with a record $96 billion in global inflows during the first quarter, up more than 100% from a year ago. More than 70 ETFs have been launched in the US so far this year, taking the total number of ETFs to 1702 and total assets to over $2.1 trillion.
Below, we highlight two ETFs launched this year that stand out from the rest and in our view hold a lot of potential.
iShares Exponential Tech ETF (XT)
This ETF has attracted almost $647 million in assets since its inception in March, making it one of the most successful ETF launches. Investing in innovative technologies that have the potential to transform our lives is a very exciting concept. Further, this ETF includes not only developers but also users of promising technologies. So the coverage extends beyond the technology sector.
The idea for this ETF came from the famous financial advisor Ric Edelman and it is understood that some of the assets in this ETF came from his clients. Investors should note some of these disruptive technologies stocks have been quite hot lately and so this ETF is not really attractive looking at the valuation but companies focused on cutting edge technologies definitely have the potential to deliver superior return over time and this ETF could be a solid choice for long-term investing.
The product charges 47 basis points in annual expenses, which appears to be quite reasonable given its focus.
SPDR DoubleLine Total Return Tactical ETF (TOTL)
Bond markets have confounded most analysts and investors of late. Yields plunged last year when almost everybody was expecting them to go up. Over the past few months, the bond market has seen erratic swings and we have also seen substantial flattening of the yield curve.
As the Fed gets ready to raise interest rates, shorter-term rates have been going up but longer-term rates have actually declined, thanks mainly to massive demand from foreign investors since interest rates in Europe and Japan are so low.
Predicting the direction of interest rates and identifying mispricing in the bond market is almost impossible for ordinary investors but at the same time bonds deserve some allocation in the portfolio for diversification and income. That’s why there is a strong case for actively managed bond funds.
This ETF is managed by a team led by Jeff Gundlach, who is one of the most respected names in fixed income investing. Thanks mainly to his reputation, the fund has already attracted more than $418 million in assets.
The expense ratio at just 55 basis points is pretty reasonable for an actively managed fund. While the fund is currently heavily focused on mortgage-backed securities, it can invest in any area of the fixed income world.
ISHARS-EXP TECH (XT): ETF Research Reports
SPDRR-DBLN TR T (TOTL): ETF Research Reports
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