In 2021, Wall Street saw over 350 new exchange-traded funds (ETFs) become listed, amounting to a total of 2,570 ETFs stateside by Dec. 31. Globally, there were over 1,330 funds launched last year, twice the number of new ETF listings in 2020.
Today’s article introduces two of these US-listed new funds. We should remind readers that they are small ETFs with little trading history. Therefore, interested investors need to do further due diligence before committing their capital.
1. Hartford Longevity Economy ETF
- Current Price: $26.87
- 52-week range: $24.19 - $28.36
- Dividend yield: 2.10%
- Expense ratio: 0.44% per year
According to the US National Institutes of Health (NIH):
“In 2006, almost 500 million people worldwide were 65 and older. By 2030, that total is projected to increase to 1 billion—1 in every 8 of the earth’s inhabitants.”
Metrics also suggest that by the end of this decade 20% of Americans will be over 65. Such a demographic shift understandably affects and even challenges national economies, productivity levels, consumption patterns, as well as health care services.
Our first fund, the Hartford Longevity Economy ETF (NYSE: HLGE ), gives access to businesses that aim to benefit from the buying power of the aging population. It was first listed in March 2021.
HLGE, which currently has 346 holdings, focuses on robust companies with low valuation and high price momentum. The top 10 holdings account for close to 10% of net assets of $25.4 million.
In terms of the sub-sectors, we see information technology (29%), health care (23%), consumer discretionary (15%), communication services (12%), and financials (11%).
Health benefits group Anthem (NYSE: ANTM ); computer and printer manufacturer HP (NYSE: HPQ ); biopharma heavyweights AbbVie (NYSE: ABBV ) and Amgen (NASDAQ: AMGN ); computing storage name Seagate Technology (NASDAQ: STX ); and media and Internet company IAC/InterActiveCorp (NASDAQ: IAC ) lead the stocks on the roster.
HLGE started trading close to a year ago at an opening price of $24.95. Then a month ago, on Jan. 4, it hit a record high of $28.36. Since then, it has come under pressure and lost 5.0% year-to-date.
Nonetheless, the fund has returned over 7% since inception. Its P/E and P/B ratios are 15.9x and 3.4x.
We like the diversity of the fund and believe it deserves further research by those who regard aging as one of the key demographic trends to invest in, in the coming quarters.
2. Global X AgTech & Food Innovation ETF
- Current Price: $18.42
- 52-week range: $17.30 - $25.00
- Dividend yield: 0.43%
- Expense ratio: 0.50% per year
Recent research by Deloitte suggests:
“The agricultural industry is about to be disrupted and will transform into a high-tech industry.”
As a result, how food is produced, processed, and distributed will evolve in the coming years.
The Global X AgTech & Food Innovation ETF (NASDAQ:
) invests in global businesses at the center of agricultural technology (AgTech) and innovations. Such firms might work on agricultural automation and biotechnology, vertical farming, developing dairy alternatives, as well as reducing food waste.
KROP, which has 29 holdings, tracks the Solactive AgTech & Food Innovation Index. The fund started trading in July 2021.
The leading 10 names account for close to three-quarters of net assets of $5.2 million. In other words, it is a top-heavy fund, and large moves in these names could affect the price of KROP.
Consumer staples (45.0%), materials (35.6%), and industrials (13.1%) are the heavyweight segments in the portfolio.
Notably, over half the fund’s stocks come from the US. Next in line are those from Canada (15.5%), China (10.6%), Sweden (7.8%), and the UK (4.8%), among others.
Corteva (NYSE: CTVA ), which provides seed and crop protection solutions; Canada-based Nutrien (NYSE: NTR ), which distributes crop nutrients and protection products; Beyond Meat (NASDAQ: BYND ), which offers plant-based foods; and Swedish oat milk company Oatly (NASDAQ: OTLY ) are among the leading names.
In July 2021, KROP began trading at an opening price of $24.88, and saw a record high of $25 in August. However, since then, companies in the fund have come under pressure, and the ETF has lost about 27% of its value.
P/E and P/B ratios are 28.19x and 2.12x. Those investors who believe technological developments, such as highly digitalized food products and supply chains, artificial intelligence (AI)-based farming, increased consumption of vegetable meat, and digital agronomy, will grow in the years ahead could consider buying the dip in KROP.
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