6 of the Strangest ETFs You Can Buy

Strange is a matter of perspective, but these ETFs certainly escape the norm

By Robert Waldo, InvestorPlace Assistant Editor

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The exchange-traded fund (ETF) space is overflowing with all sorts of things you’d expect. From dividend-focused ETFs to gold ETFs and funds that focus on emerging markets, there are plenty of obvious choices for most level-minded investors. But there are also some strange ETFs to buy out there.

Whether it’s “biblically responsible” funds or an upcoming Quincy Jones Streaming Music, Media & Entertainment ETF, chances are good that there are appealing funds to buy no matter how out-of-the-box your investment strategies may be.

The potential oddity of ETFs is part of their beauty; their “embrace of new ideas and strategies” is also part of what makes them interesting, and ideally, more profitable than what most investors could come up with.

What all of this means is that some of the strangest ETFs are certainly worth a look, while others are merely crafted in a unique way or simply focus on areas of the market that you wouldn’t expect and therefore expand your understanding of market strategies. No matter what, there’s a lot to learn from them.

With that in mind, here are six of the strangest ETFs to buy:

Strangest ETFs to Buy: The Obesity ETF (SLIM)
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Strangest ETFs to Buy: The Obesity ETF (SLIM)

Expense Ratio: 0.5%, or $50 annually per $10,000 invested

In the age of an increasing obesity epidemic, with people getting kicked off of airlines because of their weight, perhaps it’s not so strange that The Obesity ETF (NASDAQ:SLIM) actually exists. The SLIM ETF is both a play on the inevitable rise of obesity and those companies that aim to combat it.

It is an internationally diverse fund that offers investors exposure to several different sectors, but mainly emphasizes healthcare (87%). Breaking it down, SLIM grants investors access to biotech and pharma companies that focus “on obesity and obesity-related disease such as diabetes, high blood pressure, cholesterol, heart disease, stroke and sleep apnea,” as well as more nuanced exposure to companies that focus on “weight-loss programs, supplements and plus-sized apparel.”

The fund’s variety of healthcare choices is reflected its top holdings, which consist of names like insulin management device maker Insulet Corporation (NASDAQ:PODD) and diabetes care company Novo Nordisk A/S (ADR) (NYSE:NVO). Notably, the fund has outperformed the S&P 500 by 20% over the past year.

Strangest ETFs to Buy: Global X Millennials Thematic ETF (MILN)
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Strangest ETFs to Buy: Global X Millennials Thematic ETF (MILN)

Expense Ratio: 0.5%

For those of you who are interested in taking advantage of millennial-based consumer interests and trends, Global X Millennials Thematic ETF (NASDAQ:MILN) is your go-to fund.

You could say that the MILN ETF is strange not because its concept is extremely far-fetched, but because whether millennials will continue their habits as they mature is still up in the air and, depending on who you are, the habits themselves might seem unrelatable.

The primary attraction of this ETF is its growth prospects, and while some of MILN’s holdings, such as Snap Inc (NYSE:SNAP), could easily die out, its top holdings still consist of more “reliable” names like Apple Inc. (NASDAQ:AAPL) and Paypal Holdings Inc (NASDAQ:PYPL), which likely won’t fall anytime soon because of their preexisting strengths related to or not related to millennial movements. 

Strangest ETFs to Buy: Buzz US Sentiment Leaders ETF (BUZ)
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Strangest ETFs to Buy: Buzz US Sentiment Leaders ETF (BUZ)

Expense Ratio: 0.75%

The next strange ETF on this list is not for those who believe in the “fake news” phenomenon … or maybe it is, depending on how you look at it.

The strategy behind the Buzz US Sentiment Leaders ETF (NYSEARCA:BUZ) is a three-pronged approach: to 1) determine the most popular stocks on social media, 2) determine the sentiment on said stocks and 3) determine the social media gravitas and accuracy of those who discuss said stocks.

What all of this means is that BUZ is an ETF that uses social media as a framework for its selections. This approach may seem off-putting to some, and whether it will prove to be successful in the longer-term is yet to be determined, but as of now, it has mostly performed in-line with the S&P 500 since its inception in early 2016.

Current top holdings include names like Square Inc (NYSE:SQ) and Facebook Inc (NASDAQ:FB), which you’d expect if you’re a follower of social media platforms like Stock Twits. However, it’s also important to consider that its holdings are reconstituted monthly based on the most recent social media trends, so its holdings may be more subject to change than those of other ETFs.

Strangest ETFs to Buy: ETFMG Video Game Tech ETF (GAMR)
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Strangest ETFs to Buy: ETFMG Video Game Tech ETF (GAMR)

Expense Ratio: 0.75%

There are a lot of various tech ETFs out there for investors to choose from, but most have some sort of spin on the sector to help distinguish themselves. In this case, ETFMG Video Game Tech ETF (NYSEARCA:GAMR) focuses on video game companies.

For those of you who aren’t aware, the video game space actually has a lot of potential, despite already experiencing astronomic growth. There are plenty of remaining growth opportunities in software companies like Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) and Electronic Arts Inc. (NASDAQ:EA) (which are included among its top holdings) as well as its hardware powerhouse holdings like Nvidia Corporation (NASDAQ:NVDA).

Note that this ETF heavily emphasizes video game software companies (more than 60% of its holdings), which sets it apart from most other tech ETFs. But its inclusion of hardware companies acts as a balance, as those hardware companies will thrive on video game-based trends as well as other technological developments outside of the industry.

Strangest ETFs to Buy: iShares MSCI Kokusai ETF (TOK)
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Strangest ETFs to Buy: iShares MSCI Kokusai ETF (TOK)

Expense Ratio: 0.25%

Funds that focus on developed markets aren’t very strange, but what is strange is a fund that focuses on most developed markets, while excluding one specific market. That’s what the iShares MSCI Kokusai ETF (NYSEARCA:TOK) does.

It includes international holdings from the United Kingdom (7%), France (4%), Germany (4%) and Canada (3.7%), among several others, while maintaining a strong allocation to U.S.-based stocks (65%).

The country that it doesn’t include? Japan.

And that’s part of what makes this ETF so strange; iShares does not provide an in-depth explanation for why investors ought to exclude Japanese holdings from their portfolio. Nonetheless, if you lack faith in the Japanese economy, but want light exposure to developed markets besides the U.S., then you may find the TOK ETF appealing.

Strangest ETFs to Buy: AI Powered Equity ETF (AIEQ)
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Strangest ETFs to Buy: AI Powered Equity ETF (AIEQ)

Expense Ratio: 0.75%

Some might find the rising pervasiveness of artificial intelligence (AI) strange … or terrifying. After all, we’re on the verge of self-driving vehicles and we already have sci-fi-film-like AI helpers such as Amazon.com, Inc.’s (NASDAQ:AMZN) Alexa helping us turn our lights on or off at our request. But if you think any of that is odd, just wait until you learn about the AI Powered Equity ETF (NYSEARCA:AIEQ).

The AIEQ ETF is the world’s first AI-powered ETF that uses International Business Machines Corp.’s (NYSE:IBM) Watson AI to “analyze U.S.-listed investment opportunities.” The idea here is that the AI will eliminate human bias, while maintaining the “ability to mimic an army of equity research analysts working around the clock.”

It might be too soon to judge the performance of this ETF — it got its start late October 2017 — but it should be interesting to see how the AI-driven ETF stacks up against similar human-run ETFs in the months ahead.

Even if it’s not an appetizing investment to some, it is certainly unique and the concept does hold promise.

Robert Waldo is an Assistant Editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2018/01/6-strangest-etfs-to-buy-gamr-slim-miln/.

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