Innovative ETFs are making waves as investors look for fresh ways to navigate a market marked by rapid growth and ongoing volatility. Some of these funds have launched amid turbulent conditions, including trade wars and geopolitical tensions. With volatility expected to persist, the following ETFs provide unique strategies in an unpredictable environment.
Brookmont Launches First-Ever Catastrophe Bond ETF
Brookmont Capital Management made waves with the launch of the Brookmont Catastrophic Bond ETF (ILS) on the NYSE on April 1. It is the first U.S.-listed ETF to provide exposure to catastrophe bonds. These high-yield debt instruments help insurers finance disaster-related losses from events like hurricanes and wildfires.
With a 1.58% expense ratio, ILS is more expensive than typical bond ETFs. But it offers low correlation and inflation-hedged floating-rate yields. It’s also fully cash-collateralized to mitigate principal loss from “trigger events” such as natural disasters.
According to Bloomberg, ILS was unable to secure the $25 million in initial seed capital it had originally targeted, launching the fund with only $6 million in assets. Institutional investors who had shown preliminary interest pulled back amid broader market turmoil.
Nevertheless, as extreme weather risks intensify, ILS fills a growing demand for alternative income streams and impact-minded investing.
GMO Bets on Shifting Global Supply Chains
Amid deglobalization and rising trade tensions, GMO launched the Beyond China ETF (BCHI). The aim is to capitalize on countries gaining from the diversification of global manufacturing. Rather than avoiding China entirely, BCHI seeks to harness the growth of supply chain reallocation and targets markets like Vietnam, Mexico, and India as a result.
The U.S. and China have since decided to suspend most tariffs, but investors are still in limbo. BCHI is a timely response to geopolitical shifts, offering exposure to emerging markets in a way that traditional ETFs may miss.
First U.S. Leveraged XRP ETF
Teucrium launched the Teucrium 2x Long Daily XRP ETF (XXRP) on the NYSE Arca, offering leveraged exposure to XRP futures. This ETF aims to provide 2x leverage on the daily price movements of XRP (Ripple), making it attractive for investors looking to amplify their exposure to the cryptocurrency without owning it directly.
XXRP is the first U.S. leveraged XRP ETF, filling a gap in the market as other firms have filed for similar products. This innovation comes as interest in alternative markets, including cryptocurrencies, grows due to wider adoption and technological advances. The fund is managed by Teucrium, known for its expertise in commodity-focused ETFs, and carries an expense ratio of 1.85%.
Groundbreaking Downside-Protected Bitcoin ETF
Calamos launched the world’s first 100% downside-protected Bitcoin ETF, the Calamos Bitcoin Structured Alt Protection ETF – January (CBOJ).
The ETF uses a mix of Treasuries and options on the Cboe Bitcoin US ETF Index to offer regulated bitcoin exposure within a risk-managed framework. The ETF provides full downside protection over a 12-month outcome period, while capping upside returns. The cap is reset annually.
Building on this, Calamos also launched the Calamos Bitcoin 90 Series Structured Alt Protection ETF - January (CBXJ) and the Calamos Bitcoin 80 Series Structured Alt Protection ETF - January (CBTJ) on February 4, offering 90% and 80% protection levels, respectively.
Calamos has extensive experience with options-based investing and a strong reputation in convertible strategies. It has leveraged those competencies since entering the ETF space in 2023.
State Street & Apollo Bring Private Credit to Public Markets
The SPDR SSGA IG Public & Private Credit ETF (PRIV) invests at least 80% of its assets in investment-grade debt, with a significant portion allocated to private credit. This innovative fund also allows up to 20% in high-yield securities, giving it a risk-adjusted profile designed for income-seeking investors.
PRIV is one of the few ETFs providing direct exposure to private market debt, signaling a potential shift in how investors access private credit opportunities.
Each of these funds, whether offering access to catastrophe bonds, leveraged crypto exposure, or private credit, reflects a broader trend toward innovation in portfolio construction. As markets evolve and investor needs become more complex, the demand for specialized, forward-looking strategies continues to grow.
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