Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Small ETFs, Big Gains to Start 2013

By

Small ETFs are once again up to big things.

PrintPRINT

Editor's Note: This content was originally published on Benzinga.com by The ETF Professor, Benzinga Staff Writer.

Small ETFs -- meaning those funds that labor below the much ballyhooed $100 million in assets under management watermark -- are once again up to big things. At least some of them are.

Coming off a year in which some sub-$100 million funds were among the top performers in the ETF universe, select low-asset funds are again showing that ignoring an ETF on the basis of AUM can mean missing out on tidy returns.

Remember, an ETF's AUM total is not the only indicator of its potential profitability for the fund sponsor. The $100 million in AUM number also does not take into account an ETF manager's ability to make money through securities lending, licensing fees or other external costs related to ETF management.

With that mind, here are some sub-$100 million ETFs that have been leaders to start the new year.

PowerShares NASDAQ Internet Portfolio (NASDAQ:PNQI) As was recently noted, some investors may perceive PNQI as being "illiquid" because of an average daily volume number that is below 12,000 shares. The reality is the least heavily traded of PNQI's top-10 holdings is Equinix (NASDAQ:EQIX) at over 866,000 shares per day.

Housing heavily traded fare such as Amazon (NASDAQ:AMZN), eBay (NASDAQ:EBAY), and Google (NASDAQ:GOOG) ensures PNQI is sufficiently. Being an ETF focused on Internet names rather the broader technology sector means the fund has not been dealt a blow by Apple's (NASDAQ:AAPL) woes. That means, including Friday's 1.4% gain, PNQI is up more than 6% year-to-date.

First Trust STOXX European Select Dividend Index Fund (NYSEARCA:FDD) FDD has an interesting methodology is it starts by screening firms in the STOXX Europe 600 Index that have a positive five year dividend-per-share growth rate and a dividend to earnings-per-share ratio of 60% or less, according to First Trust.

Next, possible constituents are sorted by country and ranked in descending order according to their indicated annual net dividend yield, so the companies' weights in the index are determined by yield. Investors should note that FDD is not eurozone heavy as the UK and Switzerland combine for over 54% of the fund's weight.

Some investors may gloss over this fund when they AUM of just over $20.3 million and average daily turnover of less than 19,000 shares. Others will likely get past those metrics and fall in love with a 30-day SEC yield of 6.36%. FDD has gained 2.6% year-to-date.

Market Vectors Gaming ETF (NYSEARCA:BJK) More important than the fact that BJK has "just" $53.7 million in AUM is the fund's country allocations. That is to say this ETF is not solely a play on US casinos. In fact, the US represents just 27% of BJK's country weight.

China is next at 24%, meaning BJK is a viable options for investors looking to gain exposure to Macau without having to commit to a single stock. Exposure to Macau is probably a good idea. The Chinese territory long ago passed Las Vegas as the world's top gambling mecca.

The territory raked in $38 billion in gambling revenue last year and is expected to see revenue growth of 5% to 10% this year. As an indicator of its exposure to favorable non-US gambling trends, seven of BJK's top-10 holdings are not US-based companies. BJK is up 4% year-to-date and trading at its highest levels since the second quarter of 2008.

Below, find some more great ETF and market content from Benzinga:

Ackman and Icahn Battle Over Herbalife On CNBC

5 Tech Companies That Apple Could Just Buy With Its Cash

How Likely Is a Sale of RIM?

Twitter: @Benzinga

Benzinga Pro covers this and all market news in real time. Get your free trial here.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE