ETF classification: Categories, Focuses, and Niches
The classification of ETFs (Exchange-Traded Funds) is a way to organize these funds based on various characteristics. Typically, the classification occurs on several levels: asset class, category, focus, and niche. Let's look at each of these in more detail:
Asset class: This is the most general level that determines the type of investments the fund trades in. Examples of asset classes include equities (stocks), bonds, real estate, and commodities.
Category: At this level, funds are divided into subgroups within their asset class. For example, within the "equities" asset class, categories might include sectors (technology, healthcare, etc.), company size (large, medium, small), and style (growth, value).
Focus: This level considers more specialized characteristics. If, for example, an ETF invests in technology stocks, its focus could be on specific sub-sectors like AI or cybersecurity.
Niche: This is the most specific level of classification. Funds in this category usually focus on very narrow and specialized market segments. For example, an ETF may invest only in companies involved in developing electric vehicles.
Asset class | Category | Focus | Niche |
---|---|---|---|
Equity | Sector | Communication services | Media & entertainment |
Interactive Media & Services | |||
Broad-based | |||
Consumer discretionary | Automobile manufacturers | ||
Hotels, restaurants & leisure | |||
Hotels, resorts & cruise lines | |||
Casinos & gaming | |||
Broadline retail | |||
Broad-based | |||
Consumer staples | Food, beverage & tobacco | ||
Broad-based | |||
Energy | Energy equipment & services | ||
MLPs | |||
Oil & gas equipment & services | |||
Oil & gas exploration & production | |||
Oil & gas refining & marketing | |||
Oil, gas & consumable fuels | |||
Broad-based | |||
Financials | Asset management & custody banks | ||
Banks | |||
Capital markets | |||
Diversified Banks | |||
Financial Exchanges & Data | |||
Financial services | |||
Insurance | |||
Mortgage REITs | |||
Property & casualty insurance | |||
Regional banks | |||
Transaction & payment processing services | |||
Broad-basedFinancials | |||
Health care | Biotechnology | ||
Health care equipment | |||
Health care equipment & services | |||
Health care equipment & supplies | |||
Health care providers & services | |||
Health care technology | |||
Life sciences tools & services | |||
Pharma, biotech & life sciences | |||
Pharmaceuticals | |||
Broad-based | |||
Industrials | Aerospace & defense | ||
Auto | |||
Construction & engineering | |||
Passenger airlines | |||
Passenger ground transportation | |||
Transportation | |||
Broad-based | |||
Information technology | Application software | ||
Communications equipment | |||
Internet services & infrastructure | |||
Semiconductors | |||
Software | |||
Software & services | |||
Broad-based | |||
Materials | Copper miners | ||
Diversified metals & mining | |||
Gold miners | |||
Metals & mining | |||
Silver miners | |||
Steel producers | |||
Broad-based | |||
Real estate | Industrial REITs | ||
Specialized REITs | |||
REITs | |||
Broad-based | |||
Utilities | Electric Utilities | ||
Broad-based | |||
Theme | 5G | ||
Agriculture | |||
Big Tech | |||
Blockchain | |||
Broad technology | |||
Broad thematic | |||
Cannabis | |||
Consumer | |||
Cybersecurity | |||
Digital economy | |||
Environment | |||
FinTech | |||
Genomic advancements | |||
Housing | |||
Infrastructure | |||
Internet | |||
Low carbon | |||
Millennials | |||
Mobility | |||
Natural resources | |||
Nuclear energy | |||
Remote work | |||
Renewable energy | |||
Robotics | |||
Robotics & AI | |||
Space | |||
Telecoms | |||
Timber | |||
Video games & eSports | |||
Water | |||
Size and style | Extended market | Growth Value Broad-based | |
Micro cap | |||
Small cap | |||
Mid cap | |||
Large cap | |||
Total market | |||
High dividend yield | High dividend yield | Broad-based | |
Fixed income | Broad market, asset-backed | Broad credit High yield Investment grade | Broad maturities Floating rate Intermediate Long-term Short-term Ultra-short term |
Broad market, broad-based | |||
Corporate, asset-backed | |||
Corporate, bank loans | |||
Corporate, broad-based | |||
Corporate, convertible | |||
Corporate, preferred | |||
Government, agency | |||
Government, broad-based | |||
Government, inflation-linked | |||
Government, local authority/municipal | |||
Government, mortgage-backed | |||
Government, non-native currency | |||
Government, treasury | |||
Commodities | Agriculture | Broad market | Broad maturities Extended term Front month Intermediate Laddered Optimized Physically held Variable |
Cocoa | |||
Coffee | |||
Corn | |||
Cotton | |||
Grains | |||
Lean hogs | |||
Live cattle | |||
Livestock | |||
Softs | |||
Soybean oil | |||
Soybeans | |||
Sugar | |||
Wheat | |||
Broad market | Broad market | ||
Broad market ex agriculture | |||
Energy | Broad market | ||
Carbon credits | |||
Crude oil | |||
Energy, Electricity | |||
Gasoline | |||
Heating oil | |||
Natural gas | |||
Petroleum | |||
Industrial metals | Aluminium | ||
Broad market | |||
Copper | |||
Lead | |||
Nickel | |||
Tin | |||
Zinc | |||
Metals | Broad market | ||
Precious metals | Broad market | ||
Gold | |||
Palladium | |||
Platinum | |||
Rhodium | |||
Silver | |||
Currency | Basket | Rules for currency pairs: One currency long, the other short. ""Basket"" for currency baskets. Currencies denoted by ISO codes. Examples: Long Bitcoin, short USD Long USD, short EUR Long G10 basket, short USD | Derivative In specie |
Pair | |||
Asset allocation | Asset allocation | Target date | Specified Year, examples: 2030 2045 |
Target outcome | Capital appreciation | ||
Income | |||
Income & capital appreciation | |||
Target risk | Aggressive | ||
Conservative | |||
Moderate | |||
Moderately aggressive | |||
Alternatives | Hedge fund strategies | Global macro | Managed futures |
Risk parity | |||
Risk premia | |||
Long/short | Event-driven | ||
Long/short | |||
Market neutral | |||
Merger arbitrage | |||
Multi-strategy | Absolute return | ||
Multi-strategy | |||
Tactical tools | Spreads | Long/short volatility | |
Inflation | |||
Volatility | S&P 500 | ||
S&P 500 mid-term | |||
S&P 500 short-term | |||
Trend-following |