New ETFs Offer Opportunities Despite Market Challenges

Active funds like RILA and QIDX are outperforming expectations. Recent ETF launches are gaining traction in a tough market, suggesting potential growth and investment opportunities for professional investors.

Date: 23-04-2025

AI Rating: 7

Market Performance of New ETFs
In the current landscape of nearly 4,000 ETFs in the U.S., the emergence of new actively managed funds like the Indexperts Gorilla Aggressive Growth ETF (RILA) and the Indexperts Quality Earnings Focused ETF (QIDX) offers intriguing options for professional investors. Despite experiencing a challenging start this year, both funds have outperformed the S&P 500, with RILA reporting a YTD return of approximately -7% compared to a market drop of about 10%. Similarly, QIDX has had a performance decline of around -4% YTD, showcasing its resilience amidst broader market volatility.

Focus on Earnings Quality and Growth
RILA concentrates on high-growth companies, utilizing metrics to select 175 potential candidates from a larger universe of stocks, while QIDX narrows that focus to about 130 companies with a strong emphasis on earnings stability and growth potential. This selection strategy indicates a thoughtful approach to managing risk while aiming for capital appreciation, which is essential for long-term investment returns. The ability of these funds to maintain returns that exceed those of the broader market might signal a more promising outlook than benchmark indices.

Fees and Investor Considerations
Both new ETFs carry competitive expense ratios, with RILA at 0.50% and QIDX also at 0.50%, while the Touchstone Sands Capital US Select Growth ETF (TSEL) charges 0.67%. While this places TSEL slightly higher in operational costs, its focus on fewer high-potential stocks may justify the expense for investors seeking targeted growth strategies. The varying styles among these funds allow investors to align with specific market philosophies, catering to either aggressive growth or stable earnings potential.

In summary, the emergence of these actively managed ETFs amidst challenging market conditions highlights opportunities for investors looking for strategic growth avenues, despite the volatility in the equity markets.

Stocks: RILA QIDX TSEL MSFT TMUS AXP WMB DECK DXCM