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The ETF industry is seeing explosive growth in terms of both AUM and launches, thanks to the rise in "thematic investing” and “smart beta”. The industry has seen 206 launches in the first nine months of 2020, taking the total number of ETFs to 2,357 and total assets to nearly $4.7 trillion in the U.S. market.
Globally, assets invested in ETFs and ETPs hit $7 trillion for the first time at the end of the August, according to ETF consultancy ETFGI. At the end of last month, the global industry had 8,287 ETFs/ETPs from 474 providers listed on 73 exchanges in 59 countries.
This rapid growth is due to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and low cost. Additionally, both existing and new issuers remain active in binging innovative products to the market, carving a highly specialized theme (or niche investment) focusing on a narrow corner or the very hot corners like environmental, social and governance practices (ESG) (read: New ESG ETFs Hit Market on Growing Popularity).
Below, we highlight some ETFs that have been able to pull in more than $500 million in AUM so far this year and have a huge potential to dominate the market in the coming months.
NUGT is the most popular new ETF of the first nine months of 2020 having amassed more than $1 billion in AUM since its debut on Apr 1. This ETF seeks to deliver twice (2X) the inverse (or opposite) of the performance of the NYSE Arca Gold Miners Index, charging investors 95 basis points (bps) in annual fees. The index comprises publicly traded companies that operate globally in both developed and emerging markets, and are involved primarily in mining for gold and, to a lesser extent, for silver. The fund trades in average daily volume of 3.8 million shares.
The fund has gathered more than $840 million in its asset base since its debut on May 26 and trades in average daily volume of about 15,000 shares. This ETF offers exposure to U.S. Treasury bonds with remaining maturities less than or equal to three months by tracking the ICE 0-3 Month US Treasury Securities Index. It has average maturity of 0.06 years and effective duration of 0.06 years. The fund charges 7 bps in annual fees (read: Why Should You Bet On Cash-Like ETFs Ahead of Elections).
This fund tracks the MSCI Kokusai Index, which is a market capitalization weighted index designed to provide exposure to the large and mid-cap equity securities of the developed stock market across the world, excluding Japan. It holds 1200 stocks in its basket with U.S. firms accounting for 71% of assets while many others like the United Kingdom, France and Switzerland make up for less than 5% share each. KOKU debuted on Apr 3 and has accumulated around $736.2 million in its asset base. It charges 9 bps in annual fees.
Launched on Apr 1, this ETF has accumulated $692.8 million in its asset base in six months with a solid trading average volume of 1.8 million shares. It provides 2X exposure to the daily performance of the MVIS Global Junior Gold Miners Index. The fund charges 89 bps in annual fees (read: Are Gold Mining ETFs More Sizzling Bets Than Bullion?).
LDEM has amassed $621 million in AUM since its debut on Feb 5. This product offers exposure to large- and mid-cap emerging market stocks with leading environmental, social and governance practices within their industry. It holds 476 securities in its basket and charges 16 bps in annual fees. China takes the largest share with 30% while Taiwan and India round off the next two spots. The ETF trades in average daily volume of 3,000 shares.
FT Cboe Vest U.S. Equity Deep Buffer ETF (DFEB - Free Report)
This ETF debuted on Feb 21 and has accumulated around $519.5 million in its asset base. It is actively managed fund that provides investors with returns up to a predetermined upside cap of 7.50% before fees, expenses and taxes and 6.65% after fees and expenses, while providing a buffer against losses between -5% and -30% before fees, expenses and taxes over the period from Feb 24, 2020 to Feb 19, 2021. The product charges 85 bps in annual fees.
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New Hot ETFs of First Nine Months of 2020
The ETF industry is seeing explosive growth in terms of both AUM and launches, thanks to the rise in "thematic investing” and “smart beta”. The industry has seen 206 launches in the first nine months of 2020, taking the total number of ETFs to 2,357 and total assets to nearly $4.7 trillion in the U.S. market.
Globally, assets invested in ETFs and ETPs hit $7 trillion for the first time at the end of the August, according to ETF consultancy ETFGI. At the end of last month, the global industry had 8,287 ETFs/ETPs from 474 providers listed on 73 exchanges in 59 countries.
This rapid growth is due to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and low cost. Additionally, both existing and new issuers remain active in binging innovative products to the market, carving a highly specialized theme (or niche investment) focusing on a narrow corner or the very hot corners like environmental, social and governance practices (ESG) (read: New ESG ETFs Hit Market on Growing Popularity).
Below, we highlight some ETFs that have been able to pull in more than $500 million in AUM so far this year and have a huge potential to dominate the market in the coming months.
Direxion Daily Gold Miners Bull 2X Shares (NUGT - Free Report)
NUGT is the most popular new ETF of the first nine months of 2020 having amassed more than $1 billion in AUM since its debut on Apr 1. This ETF seeks to deliver twice (2X) the inverse (or opposite) of the performance of the NYSE Arca Gold Miners Index, charging investors 95 basis points (bps) in annual fees. The index comprises publicly traded companies that operate globally in both developed and emerging markets, and are involved primarily in mining for gold and, to a lesser extent, for silver. The fund trades in average daily volume of 3.8 million shares.
iShares 0-3 Month Treasury Bond ETF (SGOV - Free Report)
The fund has gathered more than $840 million in its asset base since its debut on May 26 and trades in average daily volume of about 15,000 shares. This ETF offers exposure to U.S. Treasury bonds with remaining maturities less than or equal to three months by tracking the ICE 0-3 Month US Treasury Securities Index. It has average maturity of 0.06 years and effective duration of 0.06 years. The fund charges 7 bps in annual fees (read: Why Should You Bet On Cash-Like ETFs Ahead of Elections).
MSCI Kokusai Equity ETF (KOKU - Free Report)
This fund tracks the MSCI Kokusai Index, which is a market capitalization weighted index designed to provide exposure to the large and mid-cap equity securities of the developed stock market across the world, excluding Japan. It holds 1200 stocks in its basket with U.S. firms accounting for 71% of assets while many others like the United Kingdom, France and Switzerland make up for less than 5% share each. KOKU debuted on Apr 3 and has accumulated around $736.2 million in its asset base. It charges 9 bps in annual fees.
Direxion Daily Junior Gold Miners Index Bull 2x Shares (JNUG - Free Report)
Launched on Apr 1, this ETF has accumulated $692.8 million in its asset base in six months with a solid trading average volume of 1.8 million shares. It provides 2X exposure to the daily performance of the MVIS Global Junior Gold Miners Index. The fund charges 89 bps in annual fees (read: Are Gold Mining ETFs More Sizzling Bets Than Bullion?).
iShares ESG MSCI EM Leaders ETF (LDEM - Free Report)
LDEM has amassed $621 million in AUM since its debut on Feb 5. This product offers exposure to large- and mid-cap emerging market stocks with leading environmental, social and governance practices within their industry. It holds 476 securities in its basket and charges 16 bps in annual fees. China takes the largest share with 30% while Taiwan and India round off the next two spots. The ETF trades in average daily volume of 3,000 shares.
FT Cboe Vest U.S. Equity Deep Buffer ETF (DFEB - Free Report)
This ETF debuted on Feb 21 and has accumulated around $519.5 million in its asset base. It is actively managed fund that provides investors with returns up to a predetermined upside cap of 7.50% before fees, expenses and taxes and 6.65% after fees and expenses, while providing a buffer against losses between -5% and -30% before fees, expenses and taxes over the period from Feb 24, 2020 to Feb 19, 2021. The product charges 85 bps in annual fees.
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 >>