According to ETF.com, approximately 47 new ETFs have been launched since the beginning of the third quarter. That’s almost one every day, including weekends. While 47 is a lot, you can’t say the same about the European ETF market. Through the end of May, just 49 ETFs launched in Europe, 31% less than the three-year average of 64 through 2022.
I don’t spend my every waking hour covering the ETF market, so I have no idea whether there are operational differences between the U.S. and Europe. I’m sure there are, but I can’t name them off the top of my head. But fortunately, I’m tasked with coming up with three up-and-coming ETFs to buy listed on U.S. stock exchanges, so we’re good to go.
With no further delay, here are three new ETFs to buy that launched in Q3 2023.
U.S. Cash Flow Kings 100 ETF (FLOW)
The U.S. Cash Flow Kings 100 ETF (NYSEARCA:FLOW) was launched on July 10. It’s gathered $2.66 million in net assets in the six weeks since. The fund tracks the performance of the Global X U.S. Cash Flow Kings 100 Index, a collection of the 100 companies with the highest trailing 12 months free cash flow yields from the Mirae Asset U.S. 1000 Index.
The parent index is made up of mid and large-cap U.S. stocks. Rebalanced annually, financial stocks other than real estate investment trusts aren’t eligible for inclusion in the Global X U.S. Cash Flow Kings 100 Index.
“With the launch of FLOW, we are offering investors the chance to invest in companies that have exhibited the highest free cash flow yield, making them likely well-positioned to meet financial obligations, expand, and/or return money to their shareholders,” said Rohan Reddy, Director of Research at Global X ETFs.
Schwab High Yield Bond ETF (SCYB)
The Schwab High Yield Bond ETF (NYSEARCA:SCYB) was launched on July 11. It’s gathered $45.2 million in net assets in the six weeks since. The fund tracks the performance of the ICE BofA US Cash Pay High Yield Constrained Index, a collection of U.S. dollar-denominated below-investment-grade corporate debt.
The minimum amount outstanding of any of its 945 holdings is $250 million. The bonds held must have at least one year remaining to maturity. The ETF may invest up to 20% of its net assets in below-investment-grade bonds not held in the index. And, no security can account for more than 2% of the portfolio.
“SCYB is a compelling offering for investors seeking potentially higher-yielding fixed income with the inherent benefits of an ETF, including tax efficiency and ease of trading,” said Nicohl Bogan, Director of Product Strategy and Development, Schwab Asset Management.
SCYB is Schwab’s ninth fixed-income ETF and its 30th overall. It charges a very reasonable 0.1%.
JPMorgan Equity Focus ETF (JPEF)
The JPMorgan Equity Focus ETF (NASDAQ:JPEF) was launched on July 28. It’s gathered $215.23 million in net assets in the three weeks since. The fund is actively managed by four portfolio managers at JP Morgan (NYSE:JPM), with an average of 30 years of industry experience.
The first thing you’ll notice if you go to the ETF’s home page is that Morningstar gives it a five-star rating for large blend funds over three, five, and 10 years. How did it manage this feat in less than a month? The fund was one of four converted by J.P. Morgan from mutual funds to ETFs. Investors want active management capabilities but in an ETF investment vehicle. A total of $1.5 billion in assets were converted at the end of July, including more than $200 million for JPEF.
JPEF’s philosophy is simple. It invests in both growth and value stocks, moving between the two as the market conditions dictate. The top 10 holdings account for 40% of the fund’s net assets. Several of my favorite stocks are included such as Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), Loews (NYSE:L) and Nvidia (NASDAQ:NVDA).
Charging 0.50%, it’s well worth the money.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
