An 'all-stars' ETF designed to track the stock market's most popular themes is in the works, new report says
AP Photo/Mary Altaffer
- An fund called the Thematic All-Stars ETF is in the works for investors seeking a vehicle designed to track the stock market's hottest themes.
- This passively managed fund will be launched by Amplify ETFs, sponsored by Amplify Investments.
- The fund will not allow a company to make up more than 5% of its overall holdings.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
For investors who want to put their money in the hottest investing themes, a new exchange-traded fund may the answer for you: the Thematic All-Stars ETF.
These thematic segments include disruptive technology, evolving consumer, fintech, health care innovation, industrial revolution, sustainability, among others.
Currently in the works, this passively managed fund will be launched by Amplify ETFs, sponsored by Amplify Investments, which has over $4.7 billion in assets across its suite of ETFs as of March 2021, Bloomberg first reported.
Amplify ETFs filed a prospectus with the US Securities Exchange Commission dated April 28 to launch Amplify Thematic All-Stars ETF.
"The thematic universe includes all ETFs that meet the index provider's proprietary classification requirements, which are designed to identify ETFs with strategies seeking to capture investment opportunities," the prospectus said.
But unlike many other funds, the Thematic All-Stars ETF will not allow a company to represent more than 5% of its overall holdings.
Any excess weight will be prorated among remaining constituents, the prospectus said. As of writing, the index contained 160 stocks, which will be reconstituted and rebalanced monthly at the close of the first Friday of each calendar month, the prospectus added.
If approved, the fund will join a list of growing ETFs that have recently debuted to cater to the growing appetite of investors following the GameStop mania driven by Reddit's Wall Street Bets forum in January.
For instance, an ETF called FOMO, which aims to invest in current or emerging trends, was filed with the US Securities and Exchange Commission in March, intending to alleviate investors' fears of missing the next big thing.
"With ETF markets booming during the coronavirus pandemic, millennials have also been a key driver to the sector's growth," a Finbold report said. "In this case, young people who are not familiar with the operations of the financial markets are well-served by using a passive income management approach, and ETFs offer the solutions."
The assets under management of the10 largest ETFs surged 47.56% to $1.69 trillion between March 2020 and April 2021. In the past year, these funds added $546.63 billion, according to Finbold.
Read more: Jefferies unveils 14 stocks with exposure to the booming NFT opportunity as digital collectibles continue to become more mainstream despite the recent price slump
Source: Read Full Article