…we now have Concrete ETFs, Rare Earths ETFs, Global Aquaculture (Fishing!) ETFs, ETFs that hold only metals that are the color white (look it up – WITE, I kid you not)…
We need to make an ETF of all the loony swap-based ETFs that have been launched over the last few years. And we could call it the World’s Traded Fund, so its ticker symbol would be WTF!
And even Singapore’s not immune to the exotic-ETF trend. The SGX hasn’t listed anything quite as niche as the FSG double-long-gold-double-short-S&P500-mumble-swerve, but there’s a shopping list of excitingly exotic ETFs on the SGX’s website right here. Here’s a few of the interesting ones:
- There are ETFs that return the AUD cash rate – but denominated in SGD or USD – which seems like a rather complicated way to do a simple AUDSGD or AUDUSD rolling spot trade;
- There’s a SGD money market ETF that returns the SGD overnight rate – 0.03% – but charges 0.15% for the privilege (have a look at that performance graph!);
- And there’s an ETF tracking China’s SSE50 index (which has the heaviest financials weighting I’ve ever seen), which has a gnarly investment structure whereby the ETF owns unlisted notes that are themselves linked to the SSE50 index. (That is, apparently, what you have to do to stay within the QFII rules; how on earth is the creation-redemption process supposed to work on this fund, though?)
Now, all these funds are perfectly good investment vehicles, and their performance is fine – they all do exactly what they say on the pack. But it seems like some of them were created to answer a question that nobody asked.