⚡Breaking: The ETF Revolution You Need to Know About

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Grab your coffee and settle in for some weekend reading about new ETFs. The ETF market has been buzzing, making it tough to keep up! If you're curious about the excitement around these fresh funds, this guide will help you understand the latest developments and consider which newcomers might belong on your watchlist (no rush!).

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🆕What's Driving All These New Launches?

The numbers are striking. In 2024, approximately 2,000 new ETF products were launched globally, with active ETFs accounting for the majority of these launches.

The rise of active ETFs can be attributed to their flexibility for fund managers, which allows for adaptation to changing market conditions while maintaining daily liquidity and tax efficiency, both of which investors value. By September 2024, assets under management for active ETFs surpassed US$1 trillion, showing strong investor demand.

The trends we're seeing include a growing appetite for:

• 🎯Alternative strategies that go beyond traditional stock and bond picking

• 🚀Thematic investing targeting specific trends or sectors

• 🔒Private market access (more on this exciting development below)

• 💡Tax optimisation strategies

• 🌱ESG and sustainability-focused approaches

For us, as everyday investors, this explosion of choice is both exciting and overwhelming. The key is to remember that new doesn't always mean better, and shiny doesn't always imply suitable for your specific situation.

Before we explore specific funds worth considering, let's take a moment to discuss strategy. When it comes to newly launched ETFs, approach the situation like a thoughtful wine collector rather than someone who rushes to grab the latest bottle off the shelf. If you missed it, our previous weekend edition provided a detailed discussion on how to evaluate new ETFs—worth a read.

That said, keeping an eye on promising new launches can help you identify opportunities before they become crowded trades. You can think of this as building your "future portfolio" watchlist.

🏅Top New ETFs Worth Knowing About

Let's look at some recent launches that have piqued our interest, each showcasing something distinctive for the contemporary investor.

1. Jensen Quality Growth ETF (JGRW)

Expense Ratio: 0.57%

Inception Date: 2024-08-13

Provider: Jensen Investment Management

The Jensen Quality Growth ETF is a U.S. large-cap ETF focused on growth-oriented investments. It employs a bottom-up fundamental analysis to select high-quality companies with consistent performance and resilience. The fund maintains a concentrated portfolio of 25 to 30 stocks, chosen from those that have achieved a return on equity (ROE) of 15% or more for 10 consecutive years. This ETF offers a sophisticated investment approach, backed by an experienced team, and appeals to investors seeking long-term capital appreciation with potentially lower risk than the broader market.

2. Defiance Daily Target 2X Long MSTR ETF (MSTX)

Expense Ratio: 1.29%

Inception Date: 2024-08-14

Provider: Defiance ETFs

For adventurous investors, $MSTX ( ▲ 2.82% ) provides leveraged daily exposure to MicroStrategy (MSTR), a company known for its substantial Bitcoin holdings. As mentioned in our recent edition, leveraged single-stock ETFs can amplify both gains and losses and are designed for short-term strategies, not long-term holds. For those who understand the risks and want to access Bitcoin's price movements through a regular brokerage account, this option is worth considering. Several ETFs are focusing on MicroStrategy; take a read of our special edition here.

3. Harbor Osmosis International Resource Efficient ETF (EFFI)

Expense Ratio: 0.55%

Inception Date: 2024-12-11

Provider: Harbor Capital

The Harbor Osmosis International Resource Efficient ETF (EFFI) is an actively managed fund that uses a quantitative model to identify companies poised for strong performance while reducing their carbon, water, and waste footprints. By combining international diversification with environmental sustainability, EFFI seeks out financially attractive and resource-efficient companies rather than simply excluding specific industries. For investors seeking to expand beyond U.S. markets with an ESG focus, EFFI offers a balance between financial optimisation and values-based investing.

4. iShares iBonds 1-5 Year Corporate Ladder ETF (LDRC)

Expense Ratio: 0.10%

Inception Date: 2024-11-07

Provider: iShares

The iShares iBonds 1-5 Year Corporate Ladder ETF tracks an index of iShares iBonds Corporate ETFs with maturities under five years. By holding bonds that mature at different dates, it protects against interest rate fluctuations and provides steady income for income-focused investors. This ETF streamlines bond ladder construction for retail investors with a professionally managed portfolio of iShares iBonds ETFs. With elevated interest rates, it meets the growing demand for income and interest rate risk management in an accessible format.

5. Cambria Tax Aware ETF (TAX)

Expense Ratio: 0.49%

Inception Date: 2024-12-18

Provider: Cambria Funds

The Cambria Tax Aware ETF employs a proprietary quantitative methodology to select U.S. companies with strong value metrics and low to no dividend yields. This strategy aims to enhance after-tax returns and minimise tax liabilities associated with dividends. The ETF features a unique seeding mechanism that allows investors to transfer existing holdings into the fund tax-free. By utilising ETF technology, it offers a streamlined solution to the challenges of traditional tax-loss harvesting, marking a notable advancement in tax-efficient investing.

📈The ETF Innovation Boom

So, where does this leave us as investors? The ETF innovation we're seeing is genuinely exciting, offering access to strategies and markets that were previously difficult or impossible to access affordably.

The ETF landscape is evolving, giving everyday investors access to strategies once limited to large institutions. Innovations like active management, tax optimisation, and quantitative strategies broaden the tools available. The key challenge is selecting ETFs that match your goals and risk tolerance. Take the time to research, as the best strategy is one you can sustain through market cycles. Understanding ETFs can provide valuable insights into the industry's future.

The ETF UNO community helps you navigate the evolving investment landscape. Join us to share insights, ask questions, and support each other in making informed decisions. While new ETF launches are exciting, having a supportive community to learn from is invaluable.

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.