ETF Easter Eggs


Source of KPIs: Toroso Investments Security Master, as of March 31, 2018

INDEX PERFORMANCE DATA

 

03/31/2018         1 Wk 1 Mo 3 Mo 6 Mo 1 Yr QTD YTD Since
Inception 
Toroso ETF Industry Index 0.34% 0.26% 8.09% 18.38%  36.15 8.09% 8.09% 36.15%
S&P Financial Select Sector Index (0.36%) (4.31%) (0.95%) 7.59% 18.04% (0.95%) (0.95%) 18.04%

Returns as of March 24, 2018.
Inception Date: April 4, 2017. Index performance is for informational purposes only and does not represent the ETF. Indexes are unmanaged and one cannot invest directly in an index.Past performance is NOT indicative of future results, which can vary.

Click here for information on the ETF following TETF Index
ETF EASTER EGGS

We have been trying to stick to the themes and holidays lately, so this week’s TETF.Index post is about Easter, more particularly Easter eggs. Easter egg hunts are a lot of fun with kids, whether you are hiding them or seeking!

One trend lately with Easter eggs has nothing to do with Easter though. QZ.com defines an Easter Egg as, “a joke or reference that’s intentionally hidden inside a movie, TV show, game, or other work of art. It’s usually a visual clue that rewards close viewing—just like in a traditional Easter egg hunt.”

One movie-making juggernaut has been carefully constructing its universe for decades, teasing and exciting fans with past and future movie references.  This industry-leader is Disney. Disney famously puts Easter eggs throughout its movies such as Toy Story, Aladdin, Finding Nemo, Up, Frozen, and so many others.

Fun fact on Disney: It is actually under-owned by ETFs. Only 116 ETFs hold shares of Disney which is 2.51% below the average (7.00%). This information can be easily researched on our Toroso ETF Think Tank website.

However, Disney isn’t the only one that hides Easter Eggs in its products. In fact, there are several ETPs held within other ETFs. The three we are going to focus on are: ARKK, YYY, and QXTR

 

1.Our first ETF Easter egg is GBTC within the ARK Innovation ETF (ARKK)

ARKK just won ETF of the year and they are the only ETF to own the Bitcoin Investment Trust (GBTC).  At this point the exposure to GBTC is under 1%, but last year as it soared, the position was much more substantial.  GBTC is not an ETF, although Morningstar incorrectly classifies it as one. GBTC is an emerging growth company that own bitcoin.

It is publicly traded on the OTC, or pink sheet markets, which is why most other ETFs and institutional investors cannot trade the security. Since it is not an ETF, the company cannot create or redeem shares intraday. This limitation causes GBTC to trade at a substantial premium to the underlying bitcoin held by the company. We are not endorsing GBTC, but it is one of the most interesting Easter Eggs in an ETF.

 

2. Our second discovery is a basket of ETF Easter Eggs: YieldShares High Income ETF (YYY) 

This ETF yields over 8% through a basket of Closed End Funds (CEF), and there are about 30 Easter Eggs in this fund. The world of CEFs is known for two things: Yield and Discounts. The index behind YYY reconstitutes after a tax loss harvesting season to target the CEFs trading with the juiciest yields and biggest discounts. The process is like looking for the plastic egg with the most cash inside.

3. To find the eggs, one must look in unique places like QuantX Risk Managed Multi-Asset Total Return ETF (QXTR)

”The QuantX Risk Managed Multi-Asset Total Return ETF tracks an index of global securities.QXTR aims to provide exposure to the best performing asset classes while mitigating downside risk. The fund has wide latitude to invest in stocks, bonds, commodities and real estate, with no restrictions on geography, cap-size, maturity, or credit rating.”

  –ETF.com

QXTR expresses these asset classes through other ETFs. This fund is full of great ETF hidden gems like ANGL from Van Eck which is an intelligent alternative to traditional high yield-focused ETFs. Another one of our favorites is PUTW from WisdomTree. PUTW is another great example of ETF innovation as an industry growth factor because the fund democratized access to the institutional practice of Put Option Writing. A third egg hidden in QXTR is DGL from Invesco. DGL provides exposure to Gold using futures.  This is interesting because owning gold directly in a traditional fund can cause serious tax issues.  DGL avoids many of these tax problems through replication futures.

 We are interested to know what other Easter Eggs ETF Nerds know about! Join the discussion on our Think Tank site to learn and engage with other ETF Nerds like us!


ETF LAUNCHES
CBOE VestS&P500 Div Arstcrts Tgt Inc ETF KNG
Nationwide Max Divrs Emrg Mkts Cr Eq ETF MXDE
PPTY US Dversfd Rl Est ETF PPTY

TETF INDEX PERFORMANCE VS LEADING FINANCIAL INDEXES

As of March 31, 2018.

TOP 10 HOLDINGS PERFORMANCE

BOTTOM 10 HOLDINGS PERFORMANCE

As of April 2, 2018. Source: Morningstar Direct.

 

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