With thousands of options available, the landscape of exchange-traded funds ETFs can be overwhelming. Fortunately, many are able to accomplish their goals with a relatively small number of inexpensive, broadly diversified funds, which tend to allow casual investors to buy and hold without much additional thought.
On the other extreme are highly specialized ETFs that carry an unusual amount of risk and are designed for more active, experienced investorsβthink of leveraged and inverse funds , for example. And then there are the unusual ETFs with unique themesβsometimes almost comical, sometimes more seriousβand strategies. Many of these funds don't draw much investor attention because of their niche focuses, meaning that they lack substantial asset bases and trading volume. While it remains to be seen if these ETFs can keep up the momentum, they nonetheless make a compelling case for funds with unorthodox approaches.
SNOY is one of a growing number of ETFs providing indirect, leveraged, or otherwise enhanced exposure to a particular security. In the case of SNOY, the target stock is non-centralized cloud-based data storage, analytics, and computing firm Snowflake Inc. SNOY is designed to provide a synthetic covered call approach whereby the fund sells and writes call options. Interestingly, the fund's strategy caps potential gains if the price of SNOW increases but remains subject to all possible losses if SNOW shares decline in value.
As an actively managed fund, SNOY has a moderately high expense ratio of 0. However, it has been highly successful at achieving compelling yields since its launch in June βas of February 20, , SNOY has a dividend yield of It also has notched a year-to-date return of FCUS adopts a unique strategy that flips between a focus on equities or Treasury securities depending upon external market conditions.
While the market is strong, the fund's portfolio holds around 30 of the 1, largest U. When the market is weaker or in a more turbulent position, as indicated by the fund's market risk algorithms, it shifts half of its portfolio to less-risky Treasury, cash, or bond index ETF investments.
