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Best New ETFs for Your Portfolio

The ETF industry continues to grow but at a slower pace compared with last year. 73 ETFs have launched this year so far, taking the total number of products to 1,886 and assets under management to more than $2.2 trillion.

43 new ETFs were launched in the first quarter this year, which was almost half of the recent peak of 90 ETFs in 3Q 2015.

Further, new ETFs are getting more niche, focusing on a very narrow corner of the market or a very specialized strategy. The main reason is that all easy ideas have already been taken. 100 largest ETFs control almost 75% of total industry assets.  These ETFs target the broader market or sectors. Because of their massive assets under management, these ETFs are able to operate with very low fees. These are all mostly low cost ETFs from top three providers, who together control more than two thirds of industry assets.  For newer entrants, it is almost impossible to compete with these large funds so they are trying to offer something different.

Below, we have highlighted two very promising ETFs that made their debut this year.

Vanguard International Dividend Appreciation ETF (VIGI)

VIGI is the international version of the ultra-popular Vanguard International Dividend Appreciation ETF (VIG). It provides low-cost, diversified exposure to more than 200 companies in developed and emerging markets that have a history of growing dividends.

Dividend growth companies usually have solid balance sheets and strong cash flows. So these strategies provide stability and downside protection during market downturns, in addition to growing income streams. 

First Trust Dorsey Wright Dynamic Focus 5 ETF (FVC)

FVC is the dynamic version of the popular First Trust Focus 5 ETF (FV) that invests in the top five ranked First Trust sector and industry ETFs as identified by their relative strength rankings.

FVC adds a risk management angle to FV’s strategy using cash as represented by 1-3 month U.S. Treasury bills. The fund partially goes to this cash component when at least one third of ETFs in the universe have relative strength levels which diminish compared to the cash index. In the current uncertain market environment, this risk management angle makes a lot of sense.

To learn more please watch the short video below:





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FT-DORSEY WFFF (FV): ETF Research Reports
 
VANGD-INT DV AP (VIGI): ETF Research Reports
 
VANGD-DIV APPRC (VIG): ETF Research Reports
 
FT-DRSY WDF5 (FVC): ETF Research Reports
 
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