3 New Themed ETFs Offering Capital Growth
Investing.com | Jul 30, 2021 02:57AM ET
Fund issuers are increasingly launching new thematic exchange-traded funds (ETFs) that might provide access to sectors, asset classes or investing styles. Today, we introduce three such ETFs that were all introduced this month by The Cabana Group .
The main objective of these funds, called the “Target Leading Sector ETFs,” is capital growth. Fund managers first identify the economic cycle. Then, they select the holdings through the so-called “Cyclical Asset Reallocation Algorithm (CARA),” a proprietary tool owned by The Cabana Group.
All three of these funds invest in other ETFs. Although such an approach means instant diversification, it also leads to higher annual expenses, of which investors might want to keep track. Since each of these three funds has a different risk/return profile, each could appeal to a range of readers.
h2 1. Cabana Target Leading Sector Conservative ETF/h2- Current Price: $25.27
- 52-Week Range: $24.65 - $26.21
- Expense Ratio: 0.90% per year
The Cabana Target Leading Sector Conservative ETF (NYSE:CLSC) is the conservative fund in the series.
CLSC currently has nine ETF holdings. But the top five ETFs account for almost 90% of all holdings in the fund. Here are the leading fund ETFs:
- Vanguard Communication Services Index Fund ETF Shares (NYSE:VOX) – 25.76% of the fund;
- Invesco QQQ Trust (NASDAQ:QQQ) – 24.13% of the fund;
- Vanguard Long-Term Bond Index Fund ETF Shares (NYSE:BLV) – 19.99% of the fund;
- WisdomTree Bloomberg U.S. Dollar Bullish Fund (NYSE:USDU) – 12.01% of the fund;
- Vanguard Health Care Index Fund ETF Shares (NYSE:VHT) – 8.02% of the fund.
Since inception on July 13, CLSC is up about 4%.
h2 2. Cabana Target Leading Sector Moderate ETF/h2- Current Price: $25.28
- 52-Week Range: $23.99 - $25.44
- Expense Ratio: 0.90% per year
As the name implies, the Cabana Target Leading Sector Moderate ETF (NYSE:CLSM) is the moderately risky fund out of the three ETFs in the series. It currently has around $215 million in assets.
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CLSM has four holdings. The Invesco QQQ Trust (NASDAQ:QQQ) holds the biggest slice with 36.15%. Next in line are the Vanguard Consumer Discretionary Index Fund ETF Shares (NYSE:VCR), with 27.80%; the Vanguard S&P 500 ETF (NYSE:VOO), with 26.02%; and the Vanguard Long-Term Bond Index Fund ETF Shares (NYSE:BLV), with 9.97%.
Since inception in July, the fund is relatively flat, up about only 0.3%.
h2 3. Cabana Target Leading Sector Aggressive ETF/h2- Current Price: $25.23
- 52-Week Range: $23.99 - $25.44
- Expense Ratio: 0.90% per year
The most aggressive fund in the new series and, hence the riskiest of the three funds, is the Cabana Target Leading Sector Aggressive ETF (NYSE:CLSA). It has about $149 million in assets.
CLSA has only three holdings. The Vanguard Consumer Discretionary Index Fund ETF Shares (NYSE:VCR) holds the highest proportion of the holdings with 49.72%, followed by the Invesco QQQ Trust (NASDAQ:QQQ) and the Vanguard Communication Services Index Fund ETF Shares (NYSE:VOX), with 36.31% and 13.89% respectively.
During July, CLSA returned about 0.2%.
Bottom Line
Regular readers of this column will know that we encourage ETF (or equity) investors to conduct due diligence and also "invest with conviction.” In other words, it is important to understand what one buys and also to invest for the long run in robust names that will stand well during volatile times.
All three ETFs featured today invest in other funds that most investors could also buy individually. As the holdings of each of the three funds show, fund managers change the risk/return profile of the fund mainly by giving different weighting to various funds.
Therefore, the diversified approach offered by these ETFs could appeal to those who do not have much time or prior knowledge about these other funds. Thus, the three funds from Cabana could be worth keeping on your radar as the year progresses.
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