ETF of the week: Off the beaten track

August 22, 2024 at 11:55 am EDT

ETFs continue to grow in popularity year after year, with the number of issues exploding in the US. It's time to take a look at some off-the-beaten-path options. These choices aren't necessarily the ones we'd advise you to add to your portfolio, but they do offer a glimpse of the diversity that reigns in the world of ETFs.

A preference for start-ups?

The Renaissance IPO ETF lets you take positions in newly listed companies before they join major indices like the S&P 500. With 41 diversified positions in several sectors, this ETF offers unique exposure to the most recent IPOs, so you can benefit from the companies' potential growth as soon as they go public.

Top 10 holdings :

Nu Holdings - 11.84
Kenvue - 11.50%
Arm Holdings - 7.06
Robinhood Markets - 6.54%
Rivian Automotive - 5.40%
On Holding - 5.13%
Core & Main - 4.17%
Duolingo - 3.72%
CAVA Group - 3.68%
Corebridge Financial - 3.53%

Sector breakdown :

Financial Services: 30.0% - Technology: 23.
Technology: 23.1% Consumer Discretionary
Consumer Discretionary : 22.2%
Consumer Staples: 11.4%
Industrials: 8.4% %.
Communication Services: 3.8% Health Care: 1.6
Health Care: 1.6% Sales

Breakdown by capitalization :

Over $10 billion): 62.1%
$2 to $10 billion: 37.2%
Less than $2 billion: 0.7%.

Geographical distribution :

United States: 100%

Advantages :

Invest in newly listed companies.
Exposure to several IPOs.
No correlation with the S&P 500.

Disadvantages:

Underperformance during crisis periods.
Highly unpredictable performance.

ETF identity card :

Assets under management: $167m
Number of positions: 41
ISIN code: US7599372049
Ticker: IPO
Expenses: 0.60% of sales

Invest in what's making news!

The VanEck Social Sentiment ETF tracks the performance of the 75 US large-cap stocks with the highest levels of positive investor sentiment, based on content published on social networks, news articles and blogs. This ETF uses sophisticated algorithms to analyze millions of online interactions and identify the most popular and most discussed stocks.

Top 10 positions:

MicroStrategy Inc - 3.67%
SoFi Technologies Inc - 3.44%
Marathon Digital Holdings Inc - 3.19
Nike Inc - 3.15
Rivian Automotive Inc - 3.02
Apple Inc - 3.01%
Coinbase Global Inc - 3.00% Tesla Inc - 2.97
Tesla Inc - 2.97
Amazon.com Inc - 2.96
Boeing - 2.95% Inc.

Sector breakdown :

Information Technology: 33.65
Consumer Discretionary: 24.23
Communication Services: 13.47
Financial Services: 12.62
Industrials: 6.00
Consumer Staples: 4.63
Health Care: 3.25% Energy: 1.
Energy: 1.82
Materials: 0.50

Geographical breakdown :

United States: 99.33
Canada: 0.83
Treasury: -0.16

Advantages :

Investor sentiment can be an important factor in stock performance.

Disadvantages:

Underperformed the S&P 500 by 2.4% year-to-date.
High management fees.

ETF identity card :

Assets under management: $56.87m
Number of positions: 76
ISIN Code: US92189H8390
Ticker : BUZZ
Expenses: 0.75% per share

Efficiency first!

The Motley Fool Capital Efficiency 100 Index ETF uses a smart-beta formula to track the 100 most capital-efficient companies. The ETF focuses on companies that generate high returns on assets, produce significant free cash flow relative to revenues, and demonstrate consistent revenue growth year after year. The aim is to invest in leaders in financial performance, who know how to make the most of every euro invested.

Top 10 positions:

UnitedHealth Group Inc - 5.49%
Eli Lilly & Co - 5.00%
Meta Platforms Inc - 4.91%
Apple Inc - 4.86%
Mastercard Inc - 4.85%
Costco Wholesale Corp - 4.72%
Home Depot Inc/The - 4.71%
Visa Inc - 4.60% NVIDIA
NVIDIA Corp - 4.56%
Amazon.com Inc - 4.55%

Sector breakdown :

Information technology: 35.2%
Healthcare: 13.7% Consumer Discretionary
Consumer Discretionary: 10.5
Financials: 8.9% Consumer Discretionary
Communication services: 14.0% Industrial: 5.
Industrials: 5.1% Consumer Staples
Consumer staples: 9.5
Materials: 1.6% %.

Advantages :

Outperforms the S&P 500 by more than 7%.
Investment in capital-efficient companies.

Disadvantages:

The top 10 stocks account for almost half the portfolio.

ETF identity card :

Assets under management: $47m
Number of positions: 101
ISIN code: US74933W6434
Ticker: TMFE
Expenses: 0.5% per share

Companies at the cutting edge

AXS Knowledge Leaders ETF invests in innovative companies, i.e. those that invest heavily in intangible assets such as research and development (R&D). Thanks to these investments, these companies develop a significant competitive advantage in their sector. The fund focuses on large and medium-sized companies in developed markets in North America, Europe and Asia. This ETF is based on academic research from the 1990s, which highlighted a market anomaly: shares in highly innovative companies tend to outperform their competitors.

Top 10 positions :