(News Bulletin 247) – Index funds have gained popularity in recent years, favored by lower fees than on other assets, a very wide choice of products and the possibility of saving with small amounts. And with financial creativity still abundant, certain management companies have added exotic products to their ranges.

Listed index funds, ETFs or “exchange traded funds”, are among the big winners in financial assets in recent years. In France, the number of French investors who bet on an ETF over the last three months of 2023 amounted to 166,000. Over the whole of 2023, there are even 300,000 individual investors who have been attracted by these passive management products. And this is also a record, according to the thirteenth edition of the Dashboard of active individual investors of the Financial Markets Authority (AMF). And according to figures compiled by the ETFGI firm, the assets of listed index funds in Europe increased by almost 30% to reach a record level of 1,820 billion dollars at the end of 2023.

How to explain such success? Firstly, by simplicity. You quickly understand how it works and, as they are continuously listed, you can buy and resell your shares at any time. Second, even with a small budget, for example 100 euros, you will find ETFs to buy. Third, ETF management fees are very low.

For those who are not familiar with this financial term, these are funds which will replicate the evolution of the prices of a basket of stocks, bonds and raw materials. This is why they are also called trackers. Concretely, let’s take an ETF on the CAC 40. If the value of the CAC rises by 1%, your share in the ETF rises by 1%, if the CAC falls by 1%, the price of your share falls by 1%.

This explanation, which we hope was clear, will save you from having to “google” this acronym which is at the top of the most searched financial terms on Google by Internet users, followed by IPO (“Initial Public Offering” either simply an IPO) or broker (broker), according to CMC Markets.

And among the considerable number of products marketed around the world, the News Bulletin 247 editorial team has made its small selection of index funds with atypical themes. A quick overview…

1/ THE GUNZ ETF

The mnemo code for this ETF is very clear: GUNZ for firearms in English. This targets companies operating in the manufacturing, service, supply and distribution of defense equipment and personal protection services and law enforcement. Tuttle Capital seeks to track the performance of the AJN Self-Defense US Equity Index.

This management company founded by Matthew Tuttle is also known for having launched an index fund which goes against the convictions of CNBC star host Jim Cramer.

2/ THE VICE ETF

Like Tuttle Management, AdvisorShares also stands out for the creation of exotic ETFs, again with more than evocative names. The management company also offers in its product range an index fund called VICE, which is “invested in leisure products and services regardless of economic conditions”.

The VICE fund seeks long-term growth in selected global companies operating in the “vice” industries, which may include alcohol, tobacco, gaming, food and beverage, restaurants and hospitality. hospitality, or other vice-related activities, explains AdvisorShares. Indeed, the positioning of this fund is very clear when we look a little closer at its composition. The first lines of this ETF are made up of restaurant chains (Carrols Restaurant Group, Wingstop, Chuy’s Holdings), the brewer Molson Coors Beverage or the cigarette store chain Turning Point Brands.

This management company also offers investment in the YOLO ETF, an acronym derived from the English expression “you only live once”, which can be translated into French as “one only lives once”.

This index fund marketed since July 2019 is invested at least 80% of its net assets “in securities of companies which derive at least 50% of their net income from the trade of marijuana and hemp and in derivative instruments or other instruments which have economic characteristics similar to those of these securities”, it is indicated in the prospectus published for this ETF.

3/ THE BIBL ETF

What about index funds with more moral values? Investors wishing to invest in virtuous companies also have products respecting their convictions, including the BIBL ETF, which offers “a biblically responsible option in the American large cap sector, without exposure to the shares of technology giants like Meta, Apple , Amazon, Netflix or Google”, explains Inspire Insight, the management company behind this product which aims to be virtuous.

4/ THE KPOP ETF

K-pop, or Korean pop, is a truly global phenomenon. This abbreviation refers to pop music produced in Korea. The boy bands and girl bands BTS and Blackpink are also placed at the head of the gondola in major record stores. And K-Pop fans can fully experience their passion for their idols with the KPOP ETF index fund, launched in September 2022 by CT Investement and which is listed in New York. It brings together around thirty values ​​linked to South Korean popular culture.

The three largest weightings are Kakao (a web platform that offers services like Kakaotalk, a sort of Korean WhatsApp), Naver (a search engine) and Hybe (one of the four major K-pop production houses with SME , JYP and YG Entertainment which also appear in the top 10 lines of the portfolio). We also find AfreecaTv, a TV platform with a pronounced appetite for e-sport, or Studio Dragon, producer of Korean television series and the Oscar-winning film Parasite. This ETF currently has $2.8 million in assets under management.

5/ THE BUZZ ETF

BUZZ is the stock code assigned to the VanEck Social Sentiment ETF, from the VanEck management company.

Launched in December 2021, this index fund consists of securities of companies creating “buzz” on social networks. It is thus made up of 75 stocks which enjoy significant popularity on the internet. It is therefore a so-called “momentum” index (which attempts to capture the market trend). But instead of tracking stock prices, BUZZ tracks stocks that are getting the most hype on social media. The largest holdings included Apple, Starbucks, Alphabet (the parent company of Google), Meta and Tesla.

Financial innovation is therefore limitless and the range of investment vehicles offered by management companies to attract clients continues to expand, as evidenced in particular by the number of ETFs. In 2023, 543 new ETFs were launched, beating the previous record from 2021, when 480 new vehicles were registered, according to VettaFi.