The catalyst for this post was a poll from DIY Return Stacking Twitter. I would add that WisdomTree appears to welcome input about new funds as does Cambria. A long time ago as kind of a rumor mill sort of thing I heard that iShares created many of its post-WEBS, single country ETFs at the request of a large client. I should note, for this post I am not thinking about real world issues like approvals, tracking problems or whether the ideas could attract enough AUM to be viable.
Spot Bitcoin ETF- The FTX fiasco as well the situation with the Grayscale fund are just the latest incidents to hurt individual investors while we wait for the government to overcome its price manipulation concerns...even though they allow futures based products to trade.
Tail Risk that just owns T-bills along with the index puts.
Global Publicly Traded Stock Exchanges- There are at least two ETFs that are a mix of investment banks, exchanges, market makers and the like. I've owned one of the publicly traded exchanges for clients more often than not for a long time. I think it's a great exposure.
More currency ETFs- Beyond the US dollar against a bunch of currencies, I'm thinking currency cross rates that don't involve the dollar (that sentence is redundant) that might deliver something of an absolute return or market neutral result with a little yield for your trouble like maybe NZ dollar crossed with the Aussie dollar or cross rates involving the Skandies (Norway, Sweden, Denmark) but those would probably have less yield than the antipodean cross.
More single stock ETFs- As I said on Friday, I believe a use case for these can emerge related to risk management, volatility management and/or capital efficiency. I can't really see at this point how I would use them but I want to keep studying them because I do think the concept is interesting, especially the ones using options to create a synthetic long position with a covered call overlay.
1.25X Leveraged ETFs- Here I mean slight leverage to broad based index funds as means of capital efficiency not gone berserk. The way some of the funds leverage up, more mutual funds than ETFs, they seem like a catastrophe waiting to happen in the face of something no one will see coming. I am not predicting that outcome more like want to avoid it in case it happens.
Collectibles like wine/art/baseball cards/music catalogs- I buy into the idea that these could legitimately be alternative asset classes offering real diversification when marked to market correctly but I don't think there's a way to index them adequately. Maybe someone out there will be motivated enough to figure it out.
Farmland- This is one from the wayback machine, and like collectibles above, I am not sure the stocks in the space can actually be a proxy for farmland, similar to REITs not really being a proxy for other forms of real estate.
More factor ETFs- These are probably more of a compliment to MCW index funds than a total replacement. There's a lot of them out their and they are getting more sophisticated. We'll see whether "sophisticated" leads to better nominal returns or better risk adjusted returns but these resonate. Back on October 20th, Willie Delwiche Tweeted about research he did showing that since 2000, all the net gains for the S&P 500 came with the VIX above 28.5. I'm not vouching for the research, I have no idea, it seems counterintuitive but if someone wants to back that for an ETF, I'd be curious enough to watch it. I have quite a few of these I watch so why not this idea and others that have been reasonably researched.
I think a lot can be done with strategy and multi-asset that is not quite as complex and doesn't use as much leverage as some of the mutual funds already doing this. There's a solution to be found here but I think there's an extra layer of risk that goes with 300% leverage despite that leverage being used to blend different things together that should combine to lower risk and volatility. Should doesn't mean must, things can go wrong. A little simpler and less leverage and I would be interested.
This is just off the cuff, hanging out watching sports and doing some reading. Something like this is probably more like a working list not a definitive list. We can revisit this later. What ideas do you have?
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