The 6 most eye-catching ETF launches of 2021

Over the past decade, investors witnessed the launch of an exciting new range of exchange-traded-products. This year however, ETF providers took it up a notch and pushed the definition of ETFs into ever weirder and wilder places. 

Here are our top picks for the 6 most eye-catching ETF launches in 2021, ordered by launch date:

1. Horizons Psychedelic Stock Index ETF – PSYK
2. VanEck Vectors Social Sentiment ETF – BUZZ
3. ARK Space Exploration & Innovation ETF – ARKX
4. Roundhill Ball Metaverse ETF – META
5. Tuttle Capital Short Innovation ETF – SARK
6. Roundhill MEME ETF – MEME

1 - Horizons Psychedelic Stock Index ETF – PSYK

No, you're not hallucinating! There's, indeed, a psychedelic ETF running around in the markets since January 26th, 2021. The Horizons Psychedelic Stock Index ETF or PSYK (TER 1.02%) is the first Psychedelic ETF in the world and trades on the Canadian NEO Exchange.

Psychedelics (also known as hallucinogens) are a class of psychoactive substances that can alter changes in perception, mood and cognitive processes. They affect all the senses, distorting a person’s thinking, sense of time and emotions. They can also trigger hallucination, like seeing or hearing things that do not exist or are distorted. Ongoing and growing research has shown that various psychedelic substances can offer promising medical and therapeutic potential for treating mental health issues and neurological disorders.

To invest in the nascent industry through an ETF, PSYK can do the trick. The fund seeks to replicate the performance of the North American Psychedelics Index by providing exposure to a basket of North American companies that have significant business activities in, or significant exposure to, the psychedelics industry. As of December 10, 2021, PSYK's top holdings include Compass Pathways PCL ADR (11.21%), Atai Life Sciences (9.21%), MindMed (9.02%), Cybin Inc. (8.75%) and Field Trip Health (8.65%).

Since inception, PSYK failed to alter the perception and mood of investors after dipping by -50%, however net inflows during the period remained positive with $64 million. PSYK faces competition from Defiance Next Gen Altered Experience ETF (PSY) and AdvisorShares Psychedelics ETF (PSYL) in the U.S. 

PSY is the first US-listed psychedelics ETF. It tracks the BITA Medical Psychedelics, Cannabis, and Ketamine Index and provides exposure to companies listed in North America involved in medical psychedelics, medical cannabis, cannabis pharmaceuticals and cannabidiol (“CBD”) derivatives, and ketamine. It has an expense ratio of 0.75% and trades primarily on the NYSE. 

PSYL on the other hand takes an active management approach and provides exposure to North American and European companies involved in psychedelics. The fund has an expense ratio of 0.68% and trades primarily on the NYSE Arca.

2 - VanEck Vectors Social Sentiment ETF – BUZZ

Buzzing online for an extended period of time this year, is the VanEck Vectors Social Sentiment ETF or BUZZ ETF. Launched on March 2nd, 2021, BUZZ ETF tracks the BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR), which packages 75 large cap U.S. stocks that show an elevated level of "bullishness" on multiple online sources including social media, news articles, blog posts and other alternative datasets. The index factors in traders' sentiment after monitoring millions of online interactions. 

In less than a month, BUZZ lured in $355 million of investor money. However, the success story turned into a bust after witnessing consecutive outflows in the next 9 months, totaling $200 million. Compared to its outflows, BUZZ's performance isn't too scary, falling by -6.1% since debut. Read more about Buzz ETF in our article “Buzz ETF: Not a Reddit Meme stock ETF”.

As of December 17th, 2021, the fund's top holdings include Novavax (3.76%), Moderna (3.32%), GameStop (3.06%), Advanced Micro Devices (3.06%), Palantir Technologies (3.04%), AMC Entertainment (3.03%) and Apple (3.01%).

BUZZ has a net expense ratio of 0.75% and trades on the NYSE Arca.

3 - ARK Space Exploration & Innovation ETF – ARKX 

ARK Space Exploration & Innovation ETF or ARKX was not the first ETF to land on space enthusiasts' mind, but it made the loudest noise. After departing from the launchpad on March 30th, 2021, ARKX attracted $673 million as investors' FOMO reach euphoric levels around Cathie Wood's ARKs. 

The fund is the newest actively managed ARK among the fleet. It focuses on the "Space Exploration" theme by investing in companies that provide technologically enabled products and/or services that occur beyond the surface of the Earth, including orbital aerospace companies (e.g., satellite manufacturers or operators), suborbital aerospace companies (e.g., space tourism), enabling technologies companies (e.g., materials, 3D printing, energy storage, robotics etc.) and aerospace beneficiary companies (e.g., agriculture, imaging, drones, air taxis etc.).

As of December 21st, 2021, the fund's top holdings include Trimble (10.1%), The 3D Printing ETF (7.75%), Kratos Defense & Security (6.48%), Iridium Communications (5.91%) and L3Harris Technologies (5.12%) among others. Like most of the ARK fleet, ARKX is struggling with a -10% dip. Fund exits have also ramped up, witnessing its 8th consecutive monthly net outflows. 

For interested investors, ARKX has an expense ratio of 0.75% and trades primarily on the Cboe BZX.

4 - Roundhill Ball Metaverse ETF – META

The Metaverse investment thesis may have been low-key before Facebook's big Metaverse push in October, yet one ETF was ahead of the game with the first Metaverse ETF, the Roundhill Ball Metaverse ETF or META ETF.

META tracks the Ball Metaverse Index and invests in global public companies that are actively involved in the Metaverse, including companies developing the infrastructure, providing gaming engines and revolutionizing digital commerce, content and social experience. The fund exploded after the Meta hype (formerly Facebook) and saw its assets grow by 700% in the fourth quarter to reach $847 million, netting $687 million of inflows in November alone. Since inception on June 30th, 2021, META's fell by around -3%.

The Metaverse ETF scenery is becoming competitive with more providers lining up for a piece of the action. In the last few months, multiple Metaverse ETFs were launched, including the Fount Metaverse ETF (MTVR), Evolve Metaverse ETF (MESH) and Horizons Global Metaverse Index ETF (MTAV).

5 - Tuttle Capital Short Innovation ETF – SARK

ARK Innovation ETF (ARKK), Cathie Wood's flagship active ETF has met its match this year with the launch of the Tuttle Capital Short Innovation ETF or SARK on the Nasdaq on November 9th, 2021. The fund is actively managed and tries to achieve the inverse (-1x) of the return of the ARK Innovation ETF (ARKK) for a single day, not for any other period. 

Since inception, SARK attracted over $100 million of capital from anti-ARKK enthusiasts, and rightfully so, after gaining +20% compared to ARKK's -20% during the same period. ARKK and the rest of ARK Invest's sinking fleet have been hit hard in 2021 as investors fear the high valuation of some of the funds' underlying holdings. 

The asset manager has witnessed around $7 billion of combined outflows from their 8 ETF line ups. The SARK provide investors with the opportunity to reap the benefits of the ARKs downhill trajectory. Like its nemesis, SARK has an expense ratio of 0.75%.

6 - Roundhill MEME ETF – MEME

Reddit meme Investors have now an ETF to play with after the Roundhill Meme Stock ETF (MEME) made its debut on December 8th on the NYSE ARCA. Meme stocks are stocks that have gone viral on social media, attracting a cult-like following of speculators. Interests in these "inflatable" assets spiked early this year as amateur traders rallied on social media platforms, mainly Reddit, and lifted GameStop Corp. (GME) and AMC Entertainment Holdings Inc. (AMC) share prices to extreme levels, despite the lack of fundamentals. 

The Roundhill MEME ETF or MEME (0.68% expense ratio) will track the Solactive Roundhill Meme Stock Index ("MEME Index") and will invest in 25 equal-weighted U.S. listed "meme stocks" that are very popular on social media and have high short interest from the bears. As of December 20th, 2021, the fund's main holdings include Roku Inc. (4.76%), Digital World Acquisition Corp. (4.61%), Teladoc Health (4.38%), CrowdStrike Holdings (4.3%), and Chegg (4.28%). Since launch, MEME ETF dipped by -4.7%.

What's your favorite eye-catching ETF launch of the year?

You're probably wondering why there are only 6 ETFs on the list. Well, we left a few ETFs for you to pick! So, which unusual ETF launches deserve a spot? Let us know on the LinkedIn's post comment section or send it to us by mail to rony.abboud@trackinsight.com. 

Keep reading:

• 10 most popular Thematic ETFs in 2021
• TradeTalk – 2021 Wrap Up: A Review of The Year and ETF Predictions for 2022

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