On this platform, VettaFi covers a wide range of ETF topics to keep advisors and investors informed. Thus far in 2024, we published more than 3,000 articles. Let’s take a look at five of them that significantly resonated with the community. I encourage you to read the full articles at the bottom of this piece.
The Equity Income ETF Showdown in 2024
In February, VettaFi looked at a pair of covered call ETFs. The focus was on the JPMorgan Equity Premium Income ETF (JEPI), the largest fund in the space, and the NEOS S&P 500 High Income ETF (SPYI), an up-and-comer that launched in 2022.
The article noted the differences between the funds as well as the performance record to date. SPYI was the better performer when the piece was written and has continued its relative success. As of late November, the tax-efficient SPYI was beating JEPI by 400 basis points on a one-year total return basis. While SPYI’s asset base has climbed to $2.4 billion, there is likely more room for growth.
Reasons to Consider Small-Caps
In May, three months before the Fed began cutting interest rates, VettaFi made the case for small-cap ETFs. The article argued that pending “rate cuts would benefit small-caps significantly given how much debt small-caps often take on to grow.” In addition, according to the piece, some small caps offered strong growth potential and attractive valuations.
The article featured two actively managed, fundamentally focused small caps ETFs. The Avantis U.S. Small Cap Value ETF (AVUV) and the Avantis U.S. Small Cap Equity ETF (AVSC). AVUV is a $15 billion ETF that was up 20% thus far in 2024. Meanwhile, AVSC has $1.5 billion in assets and has risen 18%.
A Focus on Private Assets
In May, VettaFi also wrote a popular article looking at the role alternative assets could play in a portfolio. Leveraging research from Natixis Investment Managers, we focused on how private debt assets were expected to nearly double between 2022 and 2028. While long considered an institutional market, one-third of individual investors were looking at private investment opportunities.
As VettaFi recently discussed in another article, the world’s largest asset managers are scrambling to devise new ways to package private investment opportunities into a passive ETF wrapper. BlackRock and State Street Global Advisors are a few examples.
Carbon Market Opportunities
Many advisors and investors are familiar with precious metals and energy commodities. However, a VettaFi article on another commodity was even more popular this year. This May piece discussed opportunities to invest in the carbon allowance market via ETFs.
To quote the article “One carbon allowance equates to one metric ton of carbon dioxide emissions. Each market has a cap on allowed emissions and a trajectory that tightens over time to reduce harmful emissions. Similar to other commodities, carbon allowance prices experience periods of enhanced volatility. This can occur after new regulatory announcements regarding supply changes, or because of technical trading.”
VettaFi highlighted the KraneShares Global Carbon ETF (KRBN) which includes carbon contracts from the European Union, California and other markets. The piece also featured two other more targeted KraneShares commodity ETFs.
Compelling High Yield Exposure
The previously mentioned pieces were all published in the first half of the year. In October, VettaFi spotted an expense ratio reduction for one of Fidelity’s active ETFs. In November, Fidelity announced it had lowered the fee for the Fidelity Enhanced High Yield ETF (FDHY) to 0.35%, from 0.45%.
Many advisors and investors learned about the change earlier reading our popular article. The VettaFi coverage also discussed the quantitative, active approach used by FDHY to take on credit risk.
I want to offer gratitude to the staff writers, editors and everyone at VettaFi involved in the sharing of this content to keep the community informed in 2024. I look forward to reading more of it in 2025.
Here are the articles:
The Equity Income ETF Showdown: SPYI vs JEPI
3 Reasons to Consider Small-Caps Now
Don’t Miss These Key Private Asset Trends
Why Volatility Means Opportunity in Carbon Markets
Fidelity Slashes Price on Its Active High Yield ETF
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