Today, FIRE Funds introduced two innovative ETFs aimed at advancing the financial independence, retire early (FIRE) investment philosophy. The FIRE Funds Wealth Builder ETF (FIRS) and the FIRE Funds Income Target ETF (FIRI) are designed to assist individuals in achieving early retirement through savings growth and financial independence. FIRS emphasizes capital appreciation over the long term.
It features a net expense ratio of 0.48% following a fee waiver. This actively managed fund primarily allocates investments across other ETFs categorized into four segments that reflect varying economic conditions: prosperity, recession, inflation, and deflation. Conversely, FIRI adopts an active income-oriented strategy with a net expense ratio of 0.70% after its respective fee waiver.
The goal of this fund is to deliver an annual income target of 4%. It utilizes a barbell strategy, balancing investments across two distinct approaches.
New Investment Solutions from Fire Funds
One strategy concentrates on high-yield ETFs, while the other emphasizes lower-volatility ETFs and cash equivalents to ensure stability and liquidity. Michael Venuto, the portfolio manager for FIRE ETFs, remarked, “FIRS and FIRI are crafted to provide a versatile investment structure for individuals aiming for financial independence. ETFs represent a suitable vehicle for this demographic, offering transparency, tax efficiency, and low expense ratios — critical factors for investors focused on long-term wealth management.
We are delighted to introduce these solutions that aspire to assist investors in their journey toward financial aspirations.”
The FIRE movement, which garnered popularity among millennials, has its roots in the early 2010s. It has flourished through online forums where participants lead frugal lifestyles, saving up to 70% of their earnings to retire a decade or two prior to the age for Social Security benefits. Venuto is confident that the new FIRE ETFs will resonate with these investors.
Each ETF will consist of between 10 to 25 foundational ETFs. These funds are structured as funds of ETFs that incur fees solely at the underlying ETF level, appealing to fee-aware FIRE advocates. The success of these products will hinge on whether investors, who generally favor straightforward investments like the Vanguard Total Stock Market ETF (VTI) and casually refer to it with “VTI and chill,” are open to considering more intricate alternatives.