3 New and Unique ETFs to Give Advisors More Options

FCTE, ERNZ and EHLS are among many new funds to consider.

Here’s a quick test to see how much of an ETF geek you are. I rate highly on this scale. It is a one question pop quiz: during the last six months, how many new ETFs have been launched? I’ll give you a clue. Their addition to the existing ETF universe increased the size of the market by about 8%. 

The answer? 290 new ETFs were created from the last day in February through the last day in August of 2024. They ranged from more “buffer” products that seek to reduce downside risk in exchange for giving up some of the upside potential of the underlying securities, to a variety of stock, bond and commodity ETFs.  

There were passive ETFs that specifically track an index, and active ETFs that aim to beat an index. Among the latter group are several more ETFs that have their roots as active mutual funds. But increasingly, fund companies are choosing to have a clone version of their most popular mutual funds available to investors in the ETF structure. 

I looked through the list of these new ETFs and chose a few to highlight. By no means should this be mistaken for a “buy” or “recommended” list. The ETFs I chose were based on uniqueness, and to some extent my assessment of their long-term appeal to investors. Because with so many under-the-radar ETFs investors have left undiscovered after many years in existence, someone might as well bring attention to these new ones, while they are still fresh ideas to consider. 

3 ETFs That Are New and Different 

The $550 million SMI 3Fourteen Full Cycle Trend ETF (FCTE) is a long way of describing a very tightly constructed, 20-stock portfolio run by a firm that obviously knows the numerical value of pie (3.14, or “3Fourteen”). That’s no surprise, given the name of the firm’s founder. Investment industry veteran Warren Pies and his team created this ETF as a byproduct of the firm’s reputation as an institutional research company, which has developed proprietary fundamental, technical and macro indicators. 

Twenty stocks are low for an ETF (though I personally favor a smaller number of holdings, since any ETF is likely just one of several in a portfolio).  

But the team managing it revisits the holdings each month, which keeps the top 20 names fresh and makes these ETFs a fresh face in a crowded field. FCTE is only two months old but has over half a billion in assets.  

The $150 million TrueShares Active Yield ETF (ERNZ) is another fresh take on active management in an ETF form. But this one is focused primarily on dividend yield. In a market where the top dividend stocks in the S&P 500 yield in the 3-5% range, ERNZ aims higher. Its portfolio ranges from 50 to 150 stocks and funds, with an emphasis on smaller names, as indicated by ERNZ’s weighted average market capitalization of under $5 billion.  

Those high yields imply some risk. So, investors will need to have confidence in the manager’s ability to execute in this 3-month-old ETF. 

Long-Short ETF Category Gains Another Entrant 

And the new $48 million Even Herd Long Short ETF (EHLS) is a new entrant in what could be a popular ETF genre during the next extended bear market. It uses a proprietary algorithm to combine a stable 100% “long” equity allocation with a varying range of short holdings, between 10% and 60% of assets. EHLS does not currently hold a single long stock position greater than 2%, so diversification is a feature of this four-month-old ETF. 

The ETF business is well-established in many respects. But these types of new entrants represent a wider range of choices for advisors and investors alike.