However following a phone call with our accountant, nothing could be further from the truth.
Indeed we’ve decided that if we can’t beat ’em, why don’t we compete with our own range of ultra-niche ETFs?
That’s one way to monetize our vast audience, right?
Five niche funds you never knew you needed
Today we present five ETFs we believe could be humongous – and we’re not just talking about the fees we’ll earn. (Though we mostly are).
Three of the fantasy so-bad-they-are-good exchange-traded funds are from my co-blogger, The Accumulator. They’re followed by two even more specialist vehicles conceived of by myself.
We’re pitching them to the ETF industry right now and expect to be rich by Christmas.
The AlphaDog Totalitarian ETF
Democracy just can’t compete in today’s fast-paced world. So this unequally weighted index backs regimes who know how to get things done. Our active management team will deliver skilfull execution (of opponents), exposure to alternative
investments facts, and a flexible approach (to the truth). Past performance is not a guarantee of a future (for you). Indefinite lock-up periods likely. Expect to pay heavily. Capitalism at risk.
The iDespair Social Division ETF
Invest in the firms best-placed to profit from the most exciting social trends of our time. Think rancour, algorithmic hate, conspiracy theories, heavily armed law enforcement, tooled-up insurrectionists, and selfishness disguised as personal freedom. Available in Acc and Inc share classes because all Inc investors are scum and Acc investors are liberal snowflakes who hate their country.
The By Eck We’re All Doomed ETF
Everything is screwed so you might as well give us all your money. Using proprietary risk management woo-woo, we’ll sink your loot into booze, guns, and a sexbot colony on the dark side of the moon. Subscribers get a gold bar and a cyanide capsule by return of post. Friends and family discount available.
The Locked, Loaded, and Levered ETF of Levered ETFs ETF
Smart, switched-on Monevator readers demand – nay, deserve – something financially high-falutin’. Which is why I
had this idea in the shower got my quant team to devise the leveraged ETF to end all leveraged ETFs (as well as your solvency). Despite us explaining how financial innovation and ETFs go together like a far right rally and the White House, people still buy them. Clearly there’s demand. So this fund makes it simple for you to get exposure (and us to get the shirt off your back). It invests in a basket of every 2x and 3x levered long and short ETF we can find. Don’t know what that means? You’re our ideal customer! (Excruciating charges apply. Please sign the attached waiver that permits us to raid your estate for exit fees. Anyone named Brewster may not invest their millions, because that’d be too easy).
The Out Of The Closet Shiny Wrapped Tracker Fund ETF
The wealthy have $3 trillion in hedge funds, despite them collectively doing worse than a cheap 60/40 portfolio. Everday investors are no better. They often buy closet index funds that charge more than a cheap tracker but hold the same assets. Clearly everyone wants to feel special. Well, why fight human nature? This ETF has just one holding – a super-cheap global index fund. However we promise to bury you in glossy quarterly updates, promotional videos extolling how our companies are fighting climate change, and to sponsor Manchester United. Naturally this all costs money, so we’ll charge you 1.75% a year for the privilege. But you’ll feel so good! (Investors who hoped from the name for a LGBTQ-friendly ETF should look into our queer-positive ETF – PINK£. It invests in a range of stereotypical and mildly offensive generic holdings but will give you a winning woke air when you hold forth about it at parties.)
Exotic funds are for flings, not marriage
You might think these five ETF suggestions are ridiculous.
But they’re only slightly more madcap than some of the funds we’ve seen hit the market. Especially in the US.
Everything from ETFs aiming to profit from the obesity epidemic to ways to play the tastes of millennials have been wafted before investors like roasted chestnuts in front of Dickensian street urchins.
Some of the less faddish ETFs may play a useful role, to be fair. Especially for macro investors who truly know what they are doing.
The iShares Automation & Robotics ETF (Ticker: RBOT) for instance attempts to address a big shift that’s underway in industry.
If you have a special insight into that sector’s prospects, it’s a cheaper and easier way to get exposure than by buying dozens of firms yourself.
But very few people do have such market-beating insights.
Remember, your chosen sector doesn’t just have to do well. The investments themselves need to outperform the market to make the allocation worth having.
At least stock pickers are less likely to get their hands blown off juggling diversified sector ETFs compared individual shares.
However for sensible passive investors who know what they know (and what they don’t know) such ETFs offer little beyond a fun side-flutter.
Far better to hold an ETF that gives you a bit of every sector and every fad under the sun. Like a global tracker fund!
Readers, have we missed a trick? Make your own exotic ETF suggestions in the comments below.