5 Safer New ETFs Gaining Popularity

As the broader market steps into the fifth month of the year, the old adage – “sell in May and go away” – took center stage. The proverb stemmed from the S&P 500’s rueful historical run for the May-to-October period.

As per an article published on CNBC.com, “since 1950, the S&P 500 has had an average return of only 0.4 percent during the May-to-October period, compared with an average gain of 7.4 percent during the November-to-April period.”

Added to this, there are geopolitical concerns and chances of non-materialization of some of President Trump’s proposed pro-growth policies. Many investors seem skeptical about the market at present. At least, the asset growth pattern in new ETFs shows that.

About 70 ETFs have been launched so far this year, among which active, smart-beta, low volatile, diversified fixed-income ETFs or multi-asset ETFs have gained maximum popularity. This implies that Trump or no Trump, stellar earnings growth or moderation in profitability, Fed hike or no hike, a fear gauge is rearing its head in the broader market right now.

So, edgy investors may join the below-mentioned new ETFs that have garnered considerable attention after entering the industry this year:

QuantX Risk Managed Multi-Asset Total Return ETF QXTR

This fund has gathered about $68 million in its asset base since its inception on January 25. Its focus on absolute return strategies that aim to generate positive returns in any market condition is perhaps behind its success.

The fund looks to the performance of the QuantX Risk Managed Multi-Asset Total Return Index. This multi-asset fund comes with a high fee of 1.51%.

QuantX Risk Managed Growth ETF QXGG

This ETF was launched on January 25 and has been able to manage $59.8 million in its asset base so far. The fund seeks to maximize capital growth by investing in the best performing domestic and international equity ETFs while offering downside protection through cash and fixed income instruments during stress periods. QXGG is also a pricey pick with an expense ratio of 1.22% (read: 4 Big ETF Launches of Q1).

First Trust TCW Opportunistic Fixed Income ETF FIXD

This fund gathered $50.4 million in AUM since its inception on mid-February. Actively managed, it seeks to maximize long-term total return by investing in fixed-income securities of any credit quality issued by the government, agencies or corporate entities. More than half of the portfolio is allocated to government bonds or agencies and the rest to corporate debts.

Investors should note that FIXD can hold up to 35% of assets in speculative-grade debt securities (junk bonds) and up to 20% in securities denominated in foreign currencies (read: Why Are Active Fixed Income ETFs Flushing the Market?).

Holding 195 securities in its basket, it has an effective duration of 5.63 years and weighted average maturity of 7.92 years. It comes with a low expense ratio of 0.55%.

IQ S&P High Yield Low Volatility Bond ETF HYLV

The fund entered the market in February 2017 and has amassed about $50.3 million. The underlying index of the fund consists of U.S. dollar denominated high yield corporate bonds, and at the same time picks up securities that are expected to have lower volatility relative to the broad U.S. dollar denominated high yield corporate bond market. The fund charges 40 bps in fees. No security accounts for over 1.54% of the basket.

ArrowShares Reserve Capital Management ETF (BO:ARCM)

As per the issuer, this “is a conservative ultra short-term fixed income fund that invests in a variety of investment grade fixed income securities with maturities generally ranging from 0 to 2 years.” The fund charges 38 bps in fees and amassed about $38 million within just one month of launch.

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 >>