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Some ridiculous ETFs that we might as well market

Some ridiculous ETFs that we might as well market post image

From our coverage of sector and thematic ETFs, you may think we doubt the value of these exotic and expensive funds.

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.

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{ 27 comments… add one }
  • 1 DP January 14, 2021, 1:29 pm

    To go viral in the wider financial social media world, shouldn’t your launch dates for these ETFs be 1st April?

  • 2 The Investor January 14, 2021, 1:35 pm

    @DP — Hah, you’re probably right. Though I’m not sure going viral has quite the same ring to it in the current pandemic climate…

    Our stuff never goes viral anyway. It’s for a (refined!) niche taste. Too much waffle and too many syllables that act on every third reader to vaccinate us against mainstream popularity.

    (Well, that’s how we comfort ourselves… 😉 )

  • 3 JimJim January 14, 2021, 1:41 pm

    How about a climate catastrophe tracker ETF, shares in flood defence firms, insulation firms, A.C. unit manufacturers, fire engine manufacturers and G.M.plant producers.
    Alternatively, to hedge against this, A climate change deniers ETF, Big oil, I.C.E. car manufacturers, Gas boiler producers and civil engineering firms in coal fired power stations.
    Fees either way! Sweet
    JimJim

  • 4 JimJim January 14, 2021, 1:58 pm

    Or … and sorry for the multiple posts… A Trump is my President ETF. going long on America and short the rest of the world especially China, weighted towards wall construction firms and golf courses – anything that makes America great again. Bet you would clean up on the fees of that one 😉
    JimJim

  • 5 hosimpson January 14, 2021, 2:03 pm

    On a serious note, if I may make a suggestion…. Would you mind, as a public service, creating a table of ETF alternatives for capital gains (B&B) harvesting?
    It could live on a separate tab next to “Compare Brokers”.
    Say you hold SGLN and you want to harvest your capital gains allowance for this tax year. Selling and re-purchasing the same ETF won’t work because of the 30-day rule, and let’s assume index CFDs are not a viable option. What comparable physical gold ETFs with comparable charges could one buy, having sold SGLN?
    Etc.
    I’ve been thinking of doing it on my 3652 soapbox, but it’s too much bloody work, and nobody reads my stuff anyway. I think The Accumulator would be well placed for such an endeavor.
    Pretty please 😉

  • 6 Metro January 14, 2021, 3:15 pm

    Re: Global Index Funds.

    What are the pros and cons of investing in Vanguard’s FTSE Global All Cap vs FTSE All-World UCITS ETF VWRL or VWRP

    Thanks for your views.

  • 7 IK January 14, 2021, 3:52 pm

    The MeTo EFT. Buys shares in companies that are clearly in bubble territory. For example Tesla would be a prime buy for it now but wouldn’t have been a few months ago.

  • 8 The Investor January 14, 2021, 4:15 pm

    @Metro — I don’t think this is a great thread for that discussion. 🙂 I’d suggest reading the article below, which may give you some thoughts, and then if needed maybe asking a more specific question on there (your question here hugely open-ended).

    https://monevator.com/how-to-chooose-total-world-equity-trackers/

  • 9 Richard January 14, 2021, 6:40 pm

    Here is my poor attempt….

    The millenial house deposit ETF.

    Keep squandering your house deposit on the latest tech? Start saving like your parents did in the good ol’ days. 50% apple stock, 25% avacado farms and 25% artisan bakeries. Buy into the companies that make the things you love instead of buying the things you love. Boomers didn’t waste money on such frivolous things and look at the size of their houses. Invest with us and you too will be on the housing ladder in no time.

    Captial is at risk, mainly because we know you will liquidate it all for some avacado on toast!

  • 10 MrOptimistic January 14, 2021, 7:38 pm

    How about a 3x leveraged short spac and cryptocurrency etf. A Special Investment Vehicle or SPIV.
    Actually was looking at the Van Eck vector natural resources etf but now you’ve spolit it.

  • 11 Flashb. January 14, 2021, 9:45 pm

    I’m guessing at least the first three of these theoretical ETFs are theoretically managed by those financial ‘saints’ HSBC! 😉 In which case I’ll have 100 units of ‘The By Eck We’re All Doomed ETF’, please! Then again, maybe I’d rather buy my own booze, guns and sexbots rather than have HSBC vote for me…

  • 12 Matthew January 14, 2021, 9:50 pm

    Turn your S&S Isa into an S&M one with an ETF with exposure to Durex, Viagra, and plenty of bonds

    There is also the Tooth fairy payout index, which coincidentally actually tracks the S&P 500
    https://www.plansponsor.com/tooth-fairy-payout-tracks-sp-500/

    “Death bond” fund which buys life insurance policies off of people who sell them on (happens in the US) – so someone who doesn’t know them would profit from their death

    Also on the Sin front there was a gallows maker who assisted in law enforcement for dubious regimes
    https://www.theguardian.com/uk/2006/may/29/world.patrickbarkham

    Money market fund with 2% a year fee
    Cannabis ETF (please press the hash key)
    Telephone “on hold” music production ETF
    Or just 3x short global equities, long term

  • 13 Calculus January 15, 2021, 12:25 am

    Thanks for that, uncanny timing. I have been tempted by some of these ludicrously expensive ETFs over the last couple of months, only a percent or two, mind;) There must be something in the water. I did have some justification (to my self at least) in terms of adding risk/volatility to counterbalance overweight cash holding. Horizon is a couple of years to SIPP day, after which would like the option to draw down 25% to mainly reinvest if it makes sense at the time.
    I also see the FCA have now outlawed retail trading of cyptocurrency trackers, which as it happens are currently skyrocketing!

  • 14 The Accumulator January 15, 2021, 1:08 pm

    What’s chilling is there’s probably a marketing department out there going: “Y’ know what, guys? I think some of these ideas have legs…”

    Either that, or I’ll google SPIV, the S&M ETF and Millennial House Deposit and discover it already exists!

  • 15 The Accumulator January 15, 2021, 1:09 pm

    @ Matthew – Haha. Just spotted the hold the hash key line on the Cannabis ETF. Nice!

  • 16 JimJim January 15, 2021, 1:24 pm

    I would take a small punt on the S+M ETF if the spread was not too large, but I would want a tie in period. Withdrawal only by permission 😉
    JimJim

  • 17 Matthew January 15, 2021, 4:21 pm

    Have to be careful of overexposure too! I suppose Ann summers, various websites, and maybe other places would make it into the s&m etf

    I used to think that hash browns were cannabis based – been making them the wrong way!

    On the note of “on hold” telephone call music – we can put a man on the moon, we can send information around the world at light speed and carry miniature computers, and yet we can’t seem to manage decent audio quality on phone lines when on hold.
    “Your call is very important to us (but if you want to hang up that’s totally cool), please enjoy 20 minutes of pan pipes”

  • 18 Richard January 15, 2021, 4:55 pm

    The safe word is Woodford!

  • 19 The Accumulator January 15, 2021, 5:55 pm

    That’s one market you would want to get beaten by

  • 20 Mike January 15, 2021, 6:21 pm

    Great tongue in cheek analysis particularly liked the AlphaDog Totalitarian fund 😉

    I’ve got to admit to having a bit of a thematic slant to my ETFs held in my ISA, as you say as a bit of distraction to the predictably slow and steady World Tracker.

    My background is in tech so I wanted to some exposure to some of the bigger trends that are playing out, when I made some of the investments I had your advice ringing in my ears but my thematic ETFs have played out really well this year:
    Wisdom Cloud Computing
    iShares Automation & Robotics
    VanEck Video Gaming Esports
    IShares Clean Energy

    Thats not to say that they will continue at the same level of growth as they did in 2020, or I’ll happen to call it right in future years – sometimes you just get lucky 😉

    When you don’t have an edge there is always the world tracker :-))

  • 21 Richard January 15, 2021, 7:29 pm

    That’s a real FTSE fetish you have

    I think this is heading towards dangerous territory

  • 22 Richard January 15, 2021, 7:38 pm

    Or perhaps its getting a bit ‘oh matron’! Carry On Investing – coming to a cinema near you

  • 23 Andy January 15, 2021, 9:43 pm

    I wouldn’t bother with anything elaborate. Just shove it all into Bitcoin. Probably all be fine right?

  • 24 Naeclue January 16, 2021, 12:18 am

    Brexit ETF. Concentrated portfolio on all the things that are going to do so well now. Fisheries, UK manufacturing, UK haulage firms, agriculture, unicorn farms, customs officer recruitment firms, lorry park constructors, etc.

  • 25 Greg January 16, 2021, 11:40 am

    I always fancied creating a coin-flip ETF: HEADS. Each day, it wagers 1% of its NAV on a coin flip!

    Think about it – zero correlation with any other asset class! Fantastic for rebalancing and general portfolio construction!

    Feeling adventurous? Simply use the X2 version that invests/wagers 2% of NAV each day.

    Think betting on heads all the time is silly? Use the TAILS ETF that takes the other side! In fact, why not get both!? Perfect anti-correlation!

    Then, for the sophisticated investor there’s the Smart ETF FLIP (for a few basis points more), which works out the difference in bet amounts between the other ETFs based on their NAV and bets the right amount to make it all add up! Variable exposure based on the state of the market, zero correlation with the market in general, defined correlation with the other ETFs in the family!

    The perfect set of ETFs!

  • 26 Xenobyte January 17, 2021, 12:34 am

    Whilst not an ETF, don’t overlook the Thunberg Ultra Green REIT (Ticker:THUG). Specialising in allotments it has great growth potential.

  • 27 Nigel Root January 20, 2021, 1:13 pm

    I’d like to add another aspect: please diversify to prevent losing all your money when one broker, or investment manager, or stock market, or whatever link in the chain goes broke. I speak from bitter experience. I had money in Icesave and Northern Rock banks when they went down, and although I eventually got my money back it was no fun waiting. Regards, Nigel

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