3 New ETFs For 2021: Rookies Ready To Come Of Age

3 New ETFs For 2021: Rookies Ready To Come Of Age

Photo courtesy: Joe Mabel via Wikimedia

Rarely is it a dull year in the exchange traded funds industry and 2020 was no exception. Among the many records set last year in ETF Land were closures and launches.

First, the bad news. As Bloomberg analyst Eric Balchunas points out in some recent posts, as of Dec. 28, 253 ETFs closed in 2020. That's a record and more than double the closure level seen in 2019; but that is the sign of a hyper-competitive, maturing industry. Just because an issuer builds it (an ETF), that doesn't mean people (investors) will come.

The better news is that more than 300 new ETFs -- just in the U.S. -- debuted last year, up from 219 the previous year.

Balchunas recently posted some interesting footnotes about the top 20 by assets. First, Vanguard isn't on that list because it didn't introduce any new products last year. Second, some nuanced products from smaller issuers rapidly accumulated assets. Third, as Balchunas notes, just 36 rookie ETFs amassed more than $100 million in assets last year and just one topped $1 billion.

Here we'll examine three of 2020's new ETFs that could be in for big things this year for reasons that go beyond their assets under management.

JPMorgan BetaBuilders U.S. Mid Cap Equity ETF (BBMC)

Yes, some of the smaller, though still successful, rookie ETFs will be highlighted here, but the JPMorgan BetaBuilders U.S. Mid Cap Equity ETF BBMC deserves attention, too, because this is the only new one of 2020's new ETFs that has over $1 billion in assets. To be precise, BBMC is a $1.34 billion fund following its April 14 debut.

JPMorgan (JPM) was a late entrant to the ETF business, but thanks to a robust distribution network and the ability to bring its own assets, it's a rapidly growing issuer. Those benefits are trickling down to BBMC — the mid-cap fund is now the issuer's seventh-largest ETF. Besides those superficial superlatives, BBMC is up 61% since inception. Buoyed by mid-cap earnings momentum, the new JPMorgan ETF could shine again next year.

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