An ‘all-stars’ ETF designed to track the stock market’s most popular themes is in the works, new report says

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  • An fund called the Thematic All-Stars ETF is in the works for investors seeking a vehicle designed to track the stock market’s hottest themes.
  • This passively managed fund will be launched by Amplify ETFs, sponsored by Amplify Investments.
  • The fund will not allow a company to make up more than 5% of its overall holdings.
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For investors who want to put their money in the hottest investing themes, a new exchange-traded fund may the answer for you: the Thematic All-Stars ETF.

These thematic segments include disruptive technology, evolving consumer, fintech, health care innovation, industrial revolution, sustainability, among others.

Currently in the works, this passively managed fund will be launched by Amplify ETFs, sponsored by Amplify Investments, which has over $4.7 billion in assets across its suite of ETFs as of March 2021, Bloomberg first reported.

Amplify ETFs filed a prospectus with the US Securities Exchange Commission dated April 28 to launch Amplify Thematic All-Stars ETF.

“The thematic universe includes all ETFs that meet the index provider’s proprietary classification requirements, which are designed to identify ETFs with strategies seeking to capture investment opportunities,” the prospectus said.

But unlike many other funds, the Thematic All-Stars ETF will not allow a company to represent more than 5% of its overall holdings.

Any excess weight will be prorated among remaining constituents, the prospectus said. As of writing, the index contained 160 stocks, which will be reconstituted and rebalanced monthly at the close of the first Friday of each calendar month, the prospectus added.

If approved, the fund will join a list of growing ETFs that have recently debuted to cater to the growing appetite of investors following the GameStop mania driven by Reddit’s Wall Street Bets forum in January.

For instance, an ETF called FOMO, which aims to invest in current or emerging trends, was filed with the US Securities and Exchange Commission in March, intending to alleviate investors’ fears of missing the next big thing.

“With ETF markets booming during the coronavirus pandemic, millennials have also been a key driver to the sector’s growth,” a Finbold report said. “In this case, young people who are not familiar with the operations of the financial markets are well-served by using a passive income management approach, and ETFs offer the solutions.”

The assets under management of the10 largest ETFs surged 47.56% to $1.69 trillion between March 2020 and April 2021. In the past year, these funds added $546.63 billion, according to Finbold.

Read more: Jefferies unveils 14 stocks with exposure to the booming NFT opportunity as digital collectibles continue to become more mainstream despite the recent price slump

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Gold slumps to lowest in eight months as market ‘finally wakes’ up’ to spiking bond yields

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  • Gold hit an intraday low of $1,714 an ounce, trading at the lowest prices since early June 2020. 
  • Gold funds logged a weekly outflow of $500 million, extending a run of weekly losses. 
  • Gold is competing against higher yields and hurt by a rising dollar. 
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Gold prices Friday slumped to their lowest since mid-2020, under pressure as bond yields continued to spike while investors yanked money out of gold funds.

Gold prices fell as much as 3.4% to an intraday low of $1,714.90 an ounce on a continuous-contract basis and traded at levels not seen since early June 2020. For the week, the metal was on course to drop 3% and has lost roughly 9% so far this year.  

There were outflows of $500 million from gold funds this week, according to Bank of America in its Flow Show update Friday. Gold funds logged the biggest weekly outflow since mid-November and their 16th in the past 20 weeks, according to fund tracker EPFR on Friday.

Gold’s been suffering at the hands of higher bond yields as well as gains for the US dollar. Yields on US government bonds have raced higher this week, making gold, which offers no yield, less attractive for investors to own.

The yield on the 10-year Treasury popped above 1.6% on Thursday, a sharp move from 1.3% in less than a week. Yields have climbed as investors sell off bonds in part as they price in inflation expectations on the view that the world’s largest economy will continue recovering from the recession brought on by the COVID-19 health crisis.

Dollar-denominated gold has also been weighed by a recent increase in the greenback’s value.

“The USD is bid as FX finally wakes up to what is happening in fixed income and equities around the world,” said Brad Bechtel, global head of FX at Jefferies, in a note Friday in which he pointed out a rise in the Bloomberg Dollar Spot index. That index rose 0.6% to 1,135 during Friday’s session, moving around its highest since early February.

While gold funds saw outflows, it was a “huge week” for inflows into equity funds of $46.2 billion, the third-largest ever weekly inflow, said BofA, adding that bond funds took in $7.1 billion.

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