Exchange-traded funds (ETFs) don’t have to be boring.
Contrary to popular belief, ETFs can be exciting and invest in some unconventional sectors of the global marketplace. ETFs today can do a lot more than simply track the S&P 500 stock market index. According to Statista, there are nearly 7,000 ETFs worldwide and they manage a combined $6.18 trillion of global assets.
That’s huge and only getting bigger.
Here we look at four interesting ETFs that may appeal to more adventurous investors.
- ETFMG Prime Mobile Payments ETF (NYSEARCA:IPAY)
- Invesco DWA Healthcare Momentum ETF (NASDAQ:PTH)
- iShares S&P Global Clean Energy Index Fund (NASDAQ:ICLN)
- Invesco Golden Dragon China ETF (NASDAQ:PGJ)
ETFs to Buy: ETF Manager Group Prime Mobile Payments ETF (IPAY)
The IPAY ETF is focused on digital and electronic payment systems. It seeks to capitalize on the move away from traditional credit card and cash transactions to digital payments.
IPAY is unique in that it is the only ETF that is 100% focused on the mobile payments sector. While some other ETFs might include a fintech stock such as PayPal (NASDAQ:PYPL), IPAY is comprised entirely of such companies.
The fund seeks out established and emerging companies that are pushing the boundaries of e-commerce and using technology such as smartphones to execute payments.
Currently, IPAY has just under $1 billion in assets under management and an expense ratio of 0.75%. IPAY ‘s assets are 76% in U.S. companies and 24% in stocks of foreign payment and e-commerce companies.
Currently, IPAY holds 41 companies. Top holdings include PayPal, Square (NYSE:SQ) and Fiserv (NASDAQ:FISV). The ETF has gained 18% in the past six months and is up 105% since its inception in 2015.
Investors who want exposure to financial services companies and who also like being on the cutting edge should consider investing in the IPAY ETF.
Invesco DWA Healthcare Momentum ETF (PTH)
Health care is huge right now, and not just because of the Covid-19 pandemic. Aging baby boomers and advances in medications and technology are pushing health care to the forefront of society and business.
One of the best ways for investors to gain broad-based exposure to health care is through the Invesco DWA Healthcare Momentum ETF, or PTH. The ETF is comprised of U.S. health care stocks and it aims to meet a specific set of investment criteria, including fundamental growth, stock valuation and risk mitigation.
Currently, one quarter (25%) of PTH is allocated to the biotechnology sector, followed by a 23% weighting for the health care equipment and supplies sector. Top holdings include UnitedHealth Group (NYSE:UNH), Humana (NYSE:HUM) and Thermo Fisher Scientific (NYSE:TMO).
The PTH ETF has $552.7 million assets under management and boasts an expense ratio of 0.60%, or $60 annually on a $10,000 investment. It doesn’t pay a dividend, but it has returned 43% to investors year-to-date and is up 20% over the past five years.
iShares S&P Global Clean Energy Index Fund (ICLN)
President-elect Joe Biden has made clear that addressing climate change will be one of his administration’s top priorities. And that’s good news for the clean technology industry that is at the forefront of mitigating pollution and stemming the impacts of global warming.
The iShares S&P Global Clean Energy Index Fund, known as ICLN is a great way to invest in climate change initiatives and gain exposure to clean technology and energy companies.
ICLN invests in U.S. and international clean energy stocks. The ETF focuses on both established solar energy companies and emerging companies that are developing alternative energy sources such as solar or wind power. Top holdings of the ICLN ETF include Enphase Energy (NASDAQ:ENPH), First Solar (NASDAQ:FSLR) and VERBUND AG (VIE:VER).
The fund has $2.2 billion in assets under management and an expense ratio is 0.46%. The ICLN has returned 90.2% over the past six months and 18% since inception. This ETF has the added benefit of paying an annual dividend of 14 cents per share.
Invesco Golden Dragon China ETF (PGJ)
China should be on the mind of every investor. The country of 1.4 billion people is competing aggressively against the U.S. and is home to a growing number of influential companies.
However, investing in Chinese stocks presents significant risks as regulatory and accounting procedures are much more lax in China than in other jurisdictions. Investing in individual Chinese stocks can be too risky for many investors. One way to lessen the risk is to invest in the Invesco Golden Dragon China ETF.
The PGJ ETF has been around for 16 years now, but it still represents a great way to gain exposure to China, particularly its internet economy and technology sector. The ETF’s top holdings include many of China’s largest and most successful companies, including Alibaba (NYSE:BABA), JD.com (NASDAQ:JD) and Baidu (NASDAQ:BIDU).
PGJ is up nearly 40% year-to-date and 94% after five years. The PGJ ETF is especially affordable with an expense ratio of just 0.19%. It currently has assets under management of $207 billion.
On the date of publication, Joel Baglole held BABA shares.
