By Clayton Fresk, Stadion Money Management
The ETF industry is very serious. A constant barrage of data and analysis flows through the system. There are countless reports, articles, opinions, etc. that are disseminated every day. In the end, it is all very important, because eventually it comes down to putting the hard-earned money of the consumer to work.
But there are other ways to describe all of this output. It can be tedious, and more often than not, it can be downright boring. That is not downplaying the importance of the analysis to various users (investors, advisors, etc.). While there are some outlets that can put a lighthearted spin on investing and the industry, more often than not the seriousness (and potentially boringness) shines through.
The evolution of the ETF industry is following somewhat of this “investing is serious” path. (I am not positing this is necessarily a bad thing. First, they are looking to quantify what was previously more a qualitative approach by creating “Smart” (or enter your favorite adjective) Beta ETFs to replace active management. Next, they have looked to minimize/eliminate the exposure to “bad” companies by creating a plethora of ESG-focused ETFs. Now even religion has found its way in via what some pundits have called the “Bible ETFs”.
Once again, I am not saying any of this is wrong. However, maybe it is time for the industry to flip the script and start looking at more “Fun” ETFs. Of course, everyone’s opinion of what is fun is drastically different. In addition, fun may or may not lead to a favorable investment outcome. That being said, all of the following may just be wishful thinking, but here are some ideas for more fun ETFs.
Something that I would venture many people think is fun are sports. While there are limited opportunities directly in a sports team for the general public, there are related industries that are more available for investment. And as the ETF industry is well aware, having an index backing an investment idea is very important. One said index is the Solactive Sports Index, which “includes companies which are active in developing/producing athletic clothing as well as sports equipment”. While there is no existing ETF that invests solely in sports, the closest that I found would be FITS (the Health and Fitness ETF).