6 ETF Ideas Most Favored By Issuers In 2016

As much as 237 ETFs have been launched so far this year, taking the total count of available ETFs to 2,161 with an aggregate market cap of $2.80 trillion. The monumental growth in the ETF industry clearly hints at how the issuers are trying to come up with new concepts to draw investors’ attention.

For instance, no one takes interest in plain vanilla ETFs or market-cap weighted ETFs these days as products with several winning attributes designed to fight every type of market dynamics are coming on stream (read: 5 Picks to Ride on Smart Beta ETF Craze ).

Issuers are in fact fine tuning every popular investment strategy to roll out products which are compatible with the ongoing market sentiments and are also likely to flourish over the long term. Against such a backdrop, it would be intriguing to take a look at which ETF ideas ruled the mind of issuers in 2016.

Dividend

No investing area seems to be as appealing as dividend irrespective of the market conditions. Throughout 2016, we have seen a steady stream of product launches based on this strategy. While dividend appreciation ETFs like Vanguard International Dividend Appreciation Index ETF 4 High Dividend ETFs Under $20 ).

Low Volatility

Volatility has remained the only constant in the market in 2016. Probably this is why, issuers went ahead with the launches of low-volatility ETFs like Natixis Seeyond International Minimum Volatility ETF DWLV .

In fact, there was a flurry of high dividend low volatility ETFs launches this year, includingthe likes of PowerShares S&P International Developed High Dividend Low Volatility ETF (IDHD),Legg Mason Low Volatility High Dividend ETF LVHD and Legg Mason International Low Volatility High Dividend ETF (LVHI).

Environmental, Social and Governance (ESG)

The socially responsible or ESG-based investing theme has been much in vogue as well. Equities that are associated with social factors like low carbon emissions and righteous business practices come under the socially responsible theme (read: Guide to Socially Responsible ETFs ).

It is believed that ESG-based products are profitable over the the source , lesser focus on environmental issues by the companies may result in lawsuits, fines and damages.

As a result, we have funds like SPDR SSGA Gender Diversity Index ETF (How to Invest 'Fossil-Free' with This New ETF? ).

Multi-Factor

Factor-based products have been quite a trend in 2016. Both iShares and John Hancock came up with a suite of multi-factor ETFs targeting several sectors. For example, the consumer staple sector has received two products this year, namely, JHancock Multifactor Consumer Stapl ETF (JHMS) and iShares Edge MSCI Mltfctr Cnsmr Staples CNSF .

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Niche ETFs

Niche ETFs also gained precedence in 2016. Issuers have come up with products like PureFunds Video Game Tech ETF IFLY .

Fixed Income

Corporate bond funds also attracted issuers’ attention as is evident from the launch of IQ Enhanced Core Bond US ETF 5 Successful New ETFs of 1H16 ).

Apart from these, issuers explored other arenas of the fixed-income world, having unveiled products like SPDR DoubleLine Short Duration Total Return Tactical ETF GTO .

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Written By: Zacks Investment Research