Alright so, exciting launch with $HONE Harvest is undeniably a solid ETF provider. However, I won't be pulling the trigger on this until it builds enough history. Every fund has to start somewhere, & nothing says investing in an ETF when it first launches is wrong. However, it does carry risks. 1. Not enough history: This is important because a fund without history still hasn't seen bad days. Any ETF with a track record, especially through bear markets, is a safer bet than a brand new one. My personal requirement is that every fund I own had to be at least 3 years old. 2. AUM: A new ETF means small AUM. $HHIS is a unique example of a fund that blew up in less than 2 years and has now surpassed $2B in assets. The more assets, the better. One of the major reasons this is important is during a crash. Picture a fund with only 20M in assets. A 50% drop hits, and now the funds assets are worth half at 10M. This not only affects it's cushion that it falls back on, but it pushes the fund to become unsustainable and unprofitable. AUM is especially vital for a fund that pays dividends like $HDIV$HYLD etc... 3. Investor demand: This ties into point #2, but how much a fund is traded on a day-to-day basis is important to me. A higher demand means there is a viable product, & it also means more cashflow into the fund. A lot of ETFs will struggle to pass the 100M mark, and more investor demand means it's likelier to be around for longer. The less a fund is traded & owned, the higher the risk of it closing in the near future. 4. Only one of its underlying's has history: HHIS. The other 2 ETFs held by HONE are $HHIC & $HHII . Both are much newer, & have yet to prove themselves through any sort of real down period. Compare this with a fund like HDIV or HYLD, which are also funds of funds. Most, if not all of their holdings, are healthy in size (100M +), with some even surpassing the 1B dollar mark. What your fund holds is important! So, while HONE is great for diversification & should be more stable long term, it's most reputable holding is $HHIS at 40% of the portfolio. The issue? HHIS is very concentrated in tech. If tech has a bad period anytime soon, HONE will suffer. So, what do I think $HONE is good for? It's simple. It's diversified & safer than just holding HHIS or any super concentrated ETF. However, it comes with risks that come with any new fund. Invest wisely & let me know your thoughts!
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12 Comments
JODM
@jodminvesting · 16d
I agree with a lot of this tbh. The lack of history is definitely the biggest risk with $HONE. That said, I’m okay with that risk. I was looking to diversify my income ETFs anyway, and $XINT one of my holdings is also pretty new. HONE is my whole income position, while the rest of my portfolio is mainly focused on growth.
Wager
@22by7 · 16d
My buy signal is WS reducing its margin requirement😅
Terry Crapper
@glamorousglue · 16d
HHIS
Paul N@pauln · 16d
Imo HHIC HHII and HONE are spinoffs from the success of HHIS. I’m looking for income and a stable average nav price. HHIS delivers that. I would only buy these products on sector dips below its ipo price and not drip them or buy after it went up 10%. I’ve been looking at how the prices move the last few days to see how they move relative to each other. Seems to be something not quite proportional to the % mix of the 3 ETFs in HONE.
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