Over the last 25 years, Exchange Traded Funds have seen incredible growth in the number of offerings. The increase is due to the high demand from investors, and because of this, ETF issuers are constantly coming up with new products they feel investors will want.
For example, in September this year, we saw 53 brand-new Exchange Traded Funds offered to investors. As you can see, this seems like issuers are essentially throwing a lot at the wall to see what will stick and what will not.
For the individual investor, it can be hard to dig through all the new offerings and determine which are viable investments and which are unlikely to produce market-beating returns. Today I will point out a few recent ETFs that I think are worth digging deeper into and, at the very least worth knowing, are available for investors to buy.
The first is the Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares ETF (EVAV). This ETF is a two-times leveraged investment focused on the electric vehicle and autonomous driving industry.
We recently saw New York state following California's lead, which will not allow new gas-burning vehicles to be sold in the state starting in 2035. With two of the largest states in the country moving towards banning sales of internal combustion engine-powered vehicles, the only option drivers will have in those states is to buy electric vehicles, pushing demand for EVs higher.
Furthermore, it is unlikely that all states in the US will make these laws with the same timeline, the year 2035, but it is hard to deny that other states won't follow along in some form or fashion.
It also should be noted that the mass adoption of EVs is still probably years away. So while you look at EVAV, investors need to remember that it is a leveraged product. Meaning contango will occur, and thus EVAV is not an investment that should be held for long periods of time.
If you are looking for an ETF that you can buy today and have for decades to come, something like the iShares Self-Driving EV and Tech ETF (IDRV) would be an excellent place to start looking.
Next, I would like to point out the Defiance Daily Short Digitizing the Economy ETF (IBIT). The IBIT is an actively managed fund-of-funds that will offer inverse exposure to the Amplify Transformational Data Sharing ETF (BLOK). BLOK is an ETF that owns companies focusing on blockchain technology.
So if you believe the blockchain technology that Bitcoin, Ethereum, and all the other cryptocurrencies have been built on is not as valuable as others feel it may be, IBIT is a good investment for you.
I want to stress that this doesn't mean that you think Bitcoin or any cryptocurrency is overvalued. It simply means the technology that they use to operate, and therefore the companies using that technology to do new things and make new products are not as valuable.
Lastly, IBIT is an inverse ETF; consequently, it, like EVAV, will experience contango and thus should not be held for long periods.
The last group of Exchange Trade Funds I would like to highlight is the family of new offerings from Direxion, their group of single-stock ETFs. Investors can now buy Direxions single stock ETFs for 1.5X bullish and 1X bearish exposure in Apple, Amazon, Google, Microsoft, and Tesla.
Direxion Daily AAPL Bull 1.5X Shares (AAPU)
Direxion Daily AAPL Bear 1X Shares (AAPD)
Direxion Daily AMZN Bull 1.5X Shares (AMZU)
Direxion Daily AMZN Bear 1X Shares (AMZD)
Direxion Daily GOOGL Bull 1.5X Shares (GGLL)
Direxion Daily GOOGL Bear 1X Shares (GGLS)
Direxion Daily MSFT Bull 1.5X Shares (MSFU)
Direxion Daily MSFT Bear 1X Shares (MSFD)
Direxion Daily TSLA Bull 1.5X Shares (TSLL)
Direxion Daily TSLA Bear 1X Shares (TSLS)
Direxion's single stock offers are a direct competitor to AXS Investments' single stock offers, which is great for investors since we now have competition in this new realm of ETFs.
Not all new ETFs are good, and not all are bad. They each have their place and investor they are focusing on pleasing. But some are worth knowing more than others, which is why you should check back once a month or so to see which new ETFs I feel may help you invest better. Also, leave me a comment below and let me know what you think about the ETFs I highlighted above.
Matt Thalman
INO.com Contributor
Follow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.
