According to WSJ, a new ETF will hit the market this week designed to track the price of… lithium. Seriously.That follows hot on the heels of an ETF designed to track the price of corn. It trades, conveniently, under the ticker CORN.
Yes, it’s been a long time since ETFs were just a cheap way of betting on an index, or sub-index.
What’s going on here?
It seems likely that the companies are looking for a way to collect fat fees from investors who are, frankly, bored.
As we’ve been talking about for a while, stock selection is dead. Everything trades in tandem, with the indices playing off the currencies, or more general tha macro mood of the day. It’s either risk on, or it’s risk off, and stocks act accordingly.
So naturally investors will be drawn to the exotic. Your typical blue-chip may trade in line with the market, but there’s a good chance that lithium won’t, or that corn won’t, and some folks will pay a nice premium for the exotic thrill of trading an asset that was previously just the domain of hedge funds.
Plus, you probably read something about lithium being the fuel of the future, and you probably want to get in on the action.
So expect a lot more of these ETFs, offering easy ways to invest in pork bellies, cattle, lumber, Australian Dollars (priced in Yen), and Uranium, all with high fees, and some promise of collecting a fee from investors who are done with stocks.