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2 new ETFs with great growth potential

(This article was originally written in English on April 1, 2022 and translated into Spanish for this edition)

Exchange traded funds (ETFs), especially theme funds, have been one of the most popular investment funds in recent years. There are now more than 8,600 ETFs worldwide.

The Brown Brothers Harriman study indicates that 2021 was a landmark year for international ETFs, with more than $ 10 trillion in assets under management and more than $ 1 trillion in new additions.

In addition, forecasts indicate that 2022 will surpass last year’s historic boom, as 50 new funds have already been launched in the first two months.

Today’s article shows two new and little known ETFs that deserve more attention. However, we must remind readers that these funds are small and offer relatively poor results. Therefore, before committing your capital to these new ETFs, you should do your research. Finally, add that niche funds usually have high annual cost ratios.

1. ETF First Trust Expanded Technology

Current price: $ 20.18

52 week car: $ 17.88- $ 23.51

Dividend yield: 0.13%.

Cost ratio: 0.65% per year

Our First Fund, the First Trust Expanded Technology ETF (NYSE: XPND), invests in US companies or companies that rely on technology to run their business. The fund began trading in June 2021.

Description: XPND Weekly

Technology has played an important role in personal and business life during the pandemic. The value of the technology sector in the United States is already more than 2 trillion dollars and the industry is expected to grow close to 7% in 2022.

Wall Street is keeping a close eye on leading and growing tech names and ETFs focusing on the tech sector. Deloitte points out that some prominent themes will dominate the technology sector in the near future. These include:

“Take the cloud and everything as a service to the next level … Create the supply chains of the future … Build the next iteration of the hybrid workforce … Lead the fight to create a sustainable future.”

XPND now has 50 participants, with the top 10 accounting for about 43% of net assets of $ 18.7 million. In terms of sector allocation, we have semiconductor and semiconductor devices (30.74%), followed by software (25.93%), IT services (16.44%), media and interactive services (9.54%) and telecommunications equipment ( 5.76%). .

The main participants in the fund are NVIDIA (NASDAQ :), Meta (NASDAQ 🙂 Platforms, Apple (NASDAQ :), Microsoft (NASDAQ :), Visa (NYSE :), Mastercard (NYSE :), and Broadcom (NASDAQ :). Fund managers believe that these participants offer opportunities for increase.

XPDN started trading in June 2021 at an opening price of under $ 20. Then, at the end of November, it reached a historic high of $ 23.51. However, it now fluctuates around $ 20.18, which is more than 12.1% so far this year.

The ETF trades at 28.85 times the accumulated profit and 10.39 times the book value. Buy-and-hold investors may want to do further research on the fund before buying it upstream.

Fondo Fairlead tactical sector

Current price: $ 25.30

52 week car: $ 24.93- $ 26.98

Cost ratio: 0.70% per year

Our other fund today is the Fairlead Tactical Sector Fund (NYSE: TACK). This actively managed ETF aims to capitalize on the momentum of the US stock market. The fund managers seek to increase the equity ratio but reduce the reductions.

This diverse fund is basically aimed at outperforming the long-term index. It uses tactical rotation among SPDR ETFs offered by State Street (NYSE 🙂 that provide access to 11 S&P sectors (including telecommunications, consumer goods, energy, finance, industry and utilities).

To better protect capital during a downturn, TACK offers exposures to other asset classes, including investing ETFs, US government bonds and cash equivalents. Readers who follow technical analysis may be interested to know that the fund relies on technical research to analyze broader sectors and markets.

TACK, which started trading on March 28, 2022, now has 10 participants, but rebalances its portfolio on a monthly basis. The top 5 names are about 64% of net worth about $ 46 million.

The Public Services Selective Sector SPDR Fund (NYSE: XLU) is currently leading with 12.98%. It is followed by Materials Select Sector SPDR Fund (NYSE: XLB), Technology Select Sector SPDR Fund (NYSE: XLK), Energy Select Sector SPDR Fund (NYSE: XLE) and Financial Select Sector SPDR Fund (NYSE: XLF). .

We believe that TACK deserves the attention of investors. The ETF started trading at an opening price of $ 25.03. On March 28, it peaked at $ 26.98. Right now it’s about $ 25.30.

(NOTE: If you are interested in financial products I mention in the article and can not find them in your area, you could ask your broker or CFO).

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