ETF Ideas Free For The Taking

Here are some funds that may seem far-fetched, but have some root theses that are already investable.

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Editor-in-Chief
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Reviewed by: Drew Voros
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Edited by: Drew Voros

So far in 2017, we’ve seen: a filing for a marijuana-related ETF; the first bitcoin ETF proposal get rejected by the SEC; and a filing for religious values ETFs.

It’s a wide spectrum of themes in a short time, so I thought I’d toss a few of my own ETF ideas into the mix.

Obviously there’s a touch of fancifulness, but some are legit, and if there’s one thing we’ve come to learn in the ETF industry, it’s to not underestimate the willingness of ETF issuers to throw spaghetti at the wall.

The bonus? All tickers for my great ETF ideas appear to be available.

Political Values ETFs

Much like the religious-values ETFs that recently went into registration, as well as the one-year-old Global X S&P 500 Catholic Values (CATH)—which has attracted an impressive $87 million in assets since launching—these funds would follow some core values of each political party.

On the surface, this may seem funny, but if investing along your religious beliefs is a thing, investing along your political beliefs is not that much different. Here’s my lineup:  

Democrat Values ETF (DEMS)
Fund would track companies that follow Democratic party values, which would include companies that embrace women and minority leaders, health care firms that offer abortion support to service providers, and clean energy and conservation companies. The fund would also eschew gun manufacturers and military/defense firms as well as firms that produce fossil fuels.

Republican Values ETF (GOP)
Fund would track companies that follow Republican party values, such as gun companies, private prison firms, agricultural as well as military and defense companies. It could also include companies whose top executives publicly support President Trump, such as Under Armour, or even those who advise him and run public companies, such as Icahn Enterprises founded by Carl Icahn, an advisor to Trump and potential Treasury Secretary nominee at one point

Libertarian Values ETF (LIB)
Fund would track companies that follow Libertarian party values, but in the case of LIB, you could also include physical gold and silver, and gold and silver equities, since the gold standard is warmly embraced by Libertarians. Companies would also include gun manufacturers, and even companies that support the marijuana industry, since personal freedoms trump everything for the party. Companies that also publicly support LGBT lifestyle could also find a home here.

Beyond politics-centered ETFs, we could also have other thematic ETFs that would include:

 

Vice ETF (VICE)

Now that we have a whiskey ETF, the Spirited Funds/ETFMG Whiskey & Spirits ETF (WSKY), and a proposal for a marijuana-related ETF, the Emerging AgroSphere ETF, we’re getting closer to building an ETF that focuses on vices.

Toss in some gun manufacturers, tobacco companies and maybe some entertainment companies that produce or exhibit pornography in theaters or streaming, and you’re not too far off from what is a bona fide vice mutual fund, the USA Mutuals Vice Fund Investor Class Shares, which also could be included in the underlying.

Sports ETF (JOCK)

An ETF that focus on professional sports wouldn’t be as hard as it might sound to pull together if you include publicly traded companies with stakes in professional teams, as well as companies that spend large portion of their promotional money on sports sponsorships and advertising, like Coke, Ford, GM, beer makers, etc.

I’d think, though, that companies with stakes in professional teams should get a higher weighting, such as the professional soccer team Manchester United, which went public two years ago and is traded on the NYSE. Liberty Media owns the Atlanta Braves and five minor league baseball teams. And of course, you’d include Madison Square Garden, which owns the NBA Knicks, NHL Rangers and the WNBA Liberty. MSG generates revenue through ticket sales and broadcast rights, as well as other revenue from the famous arena.

Bitcoin Equity ETF (BITC)

While not a physical bitcoin ETF, this fund could track an index of companies that use bitcoins for customer transactions, such as Tesla, or that support blockchain technology, which underpins bitcoin.

Before the SEC rejected the Winklevoss Bitcoin Trust (COIN) last week, there were estimates that COIN would see incredible initial demand. One bitcoin analyst estimated first-week inflows for the fund would hit $300 million. While this wouldn’t be an investment in bitcoin per se, it may be as close to bitcoin as you’re ever going to get in an SEC-approved security, if this would pass.

But investing in public companies of all shapes and sizes has been a pretty normal course in the ETF world, and would be akin to the whiskey ETF, where you’re not buying physical whiskey, just the businesses  involved in its production, distribution and sales.

Now, who’s game to seeing if any of this spaghetti can stick?

At the time of writing, the author held none of the securities mentioned. Drew Voros can be reached at [email protected].

 

Drew Voros has nearly 30 years' experience in financial journalism. He was a longtime business editor for the Oakland Tribune and sister papers of the Bay Area News Group, and finance writer for the Hollywood trade publication Variety. Voros' past roles have also included editor-in-chief at etf.com and ETF Report.