3 ETFs to Buy That Should Be On Your Radar

 


ETFs provide an easy way to invest in multiple companies and industries, so if you’re looking to diversify your portfolio, they’re an excellent tool. If you’re thinking about investing in ETFs but don’t know where to start, we have three that we recommend you consider adding to your holdings as soon as possible. Let’s take a look at what makes them so special, and why they should be on your radar if you’re investing in the long term.


1) What are Exchange Traded Funds (ETFs)?

Exchange Traded Funds (ETFs) are diversified investments that trade on a stock exchange, similar to stocks. Unlike mutual funds, an ETF holds assets like stocks, bonds or commodities and trades close to its net asset value over the course of the trading day. 

Each fund offers a variety of investment objectives depending on what you want from it.


2) The Best Way to Invest in ETFs

The best way to invest in ETFs is through a passive strategy of investing a specified percentage of your savings each month. For example, if you save $200 a month and know that your target allocation is 60% stocks and 40% bonds, you should invest 60% or $120 of your monthly savings in the stock market and 40% or $80 in bonds. Do this for the long-term with an eye on diversification. This will let the magic of compounding work its wonders for you over time!


3)  Reasons Why Investing in an ETF Is Better Than Mutual Funds

Exchange-traded funds (ETFs) are an investment option that should be considered by investors.ETFs offer diversification. A fund manager may have a specialty that leads them to focus on one industry or investment type, which leaves them vulnerable if their area does poorly in the market. Diversifying your investments can help shield you from this risk. One way to do this is through buying index funds and ETFs with similar performance but different holdings. For example, if you buy an S&P 500 index fund and an international equity index fund, then even if there’s a downturn in the US market because of events like tariffs, it won’t affect both of your holdings equally so your portfolio would still perform well overall.

 According to the research firm ETFGI, there are 5,024 ETFs traded globally, of which 1,756 are in the US alone.


It's no surprise, then, that ETF managers do everything they can to make their funds stand out from the rest, whether that means giving them a "weird" name or investing in a "weird" industry.


But first let's ask, what  exactly are  exchange-traded funds?


In short, an ETF is a security that tracks stock indices, commodities, bonds, or other asset baskets, but trades like individual public stocks.


There are different types of ETFs available to individual investors and traders that can be used either to generate income or to hedge the risks in an investor's portfolio.


So, without further ado, here are the three ETFs we've found to be the "strangest" that offer investors and traders the potential to make big gains.



In case you like "exotic" investments...


 UFO


Procure Space Fund (Symbol: UFO) of 30 companies provides market players with a way to invest in the burgeoning space economy.


The fund, launched on April 11, includes everything from satellite carriers — like Iridium Communications, Inmarsat and Viasat — to industrial companies — Garmin, Airbus, Honeywell (NYSE: HON ) and more.


According to Andrew Chanin, co-founder and CEO of ProcureAM, UFO focuses as much as possible on pure space companies, with about 80% of their revenue derived from the space business.




YOLO


AdvisorShares Pure Cannabis Fund (symbol: YOLO) is an actively managed marijuana-traded fund that manages approximately $15 million in assets.


The investment fund, which first went live on April 17, is backed by BNY Mellon. It typically holds between 20 and 40 shares and focuses on medium and small-cap companies that participate directly or incidentally in cannabis, such as Aurora Cannabis, Canopy Growth and Tilray.


According to Maryland-based AdvisorShares, the fund "seeks long-term capital appreciation by investing in both domestic and foreign cannabis stocks. YOLO is designed to invest entirely in total exposure to cannabis under the supervision of a highly experienced portfolio management team that navigates the cannabis market." nascent."


It may be too early to judge the fund's performance - YOLO is up almost 1% since it started trading.


IPO


The Renaissance IPO Fund (symbol: IPO), with $37 million in assets under management, is designed to provide investors with a portfolio of newly listed public companies in the United States prior to their inclusion in core equity portfolios, according to Renaissance Capital.


The fund includes the largest and most liquid US companies that have recently traded in the market. "Big" subscriptions, such as Pinterest (NYSE: PINS ) and Zoom, are added to the express entry list. The companies are then removed from the fund two years after their initial trading date, when they become seasoned stocks.



The IPO is up about 51% since it began trading in October 2013.


What does all this mean to you...


When all of the above is taken into account, some of these "exotic" ETFs are definitely worth a look and should be on your radar. Just make sure you do your research beforehand and understand the risks as well as the potential rewards of making this investment.


Regardless, you can be sure of one thing: an investment as unique as some of these can be fun to follow.


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