A Few Crazy Niche ETF's, But May Be Worth Owning

Matt Thalman - INO.com Contributor - ETFs


Through my search to find great Exchange Traded Funds to tell I have run across a number of very niche ETF's that at first seem a little crazy. But after further research into some of them, they may have actually found a profitable market opportunity that you can now own.

Before we get into three of the more interesting ETF's, I would like to note that these ETF's are on the riskier side and it really wouldn’t be prudent for investors to go "all-in" with these funds.

Now that we have gotten the disclosure out of the way let's dig in.

The first one is called The Obesity ETF (SLIM), what a very fitting ticker. SLIM falls into the equity, global healthcare ETF segment and focuses on companies found all over the world which are positioned to serve the obese. The fund focuses on companies that operate in healthcare, treatment of complications associated with obesity and companies focusing on helping people with weight loss. Currently SLIM has 44 stocks, with its top ten making up 57% of its assets. Health care stocks make up 85% of the portfolio, and its weighted average market cap is $19 billion.

The fund has only been around since June 6th of 2016 and only has $2.24 million in assets and boasts a price to book value of just 7.17 times. Furthermore SLIM has an expense ratio of 0.50%, which seems a little high compared to the index focused ETF's but is fair for this niche ETF.

If SLIM wasn't niche enough for you maybe the Nashville Area ETF (NASH) fit's your niche need a little better. NASH is an ETF that is made up of US-listed companies that are headquartered in the Nashville area. Yes, you read that right, in order to be in the NASH ETF you just have to be a US listed company and have your company headquartered in Nashville.

Currently, the ETF has 27 holdings and net assets of $9.28 million and even offers a current yield of 5.5%. Currently, its top ten holdings represent 49% of the portfolio and companies like Cracker Barrel Old Country Store, HCA Holdings, Dollar General and National Health Investors are some of the top holdings. The stocks are weighted based on fundamentals and technical factors that the fund's managers deem important. Its expense ratio is 0.49%, and despite being around since August of 2013, NASH is still the only city-specific ETF I have heard of. (Comment below if you know of another.)

And lastly, probably my favorite niche ETF, the Whiskey & Spirits ETF (WSKY). Well isn't it your favorite also just based on the name? Anyways the Whiskey ETF is the newest niche ETF with an inception date of October 12, 2016. Currently, it has $2.37 million in assets and has a high 0.75% expense ratio. Currently, holdings come in at 19, with a weighted average market cap of $30.41 billion, meaning the fund owns large cap stocks. The stocks found within the portfolio are companies that produce, distribute and sell whiskey.

Interestingly enough, 27.7% are the United Kingdom-based companies, 26.8% of the fund's holdings are French companies, and 13.8% are U.S. based. Top holdings include Diageo, Pernod Ricard, Brown-Forman, Remy Cointreau, and Constellation Brands.

While the fund has not performed well since inception, down 4.33%, it should be one you keep in your back pocket since alcohol stocks typically perform well in recessionary times.

Hopefully, I once again have opened up a few new investing options for you, but remember as exciting as these options may be, it's probably not wise to fully invest in just one ETF, besides just a standard S&P 500 Index ETF like ticker symbol SPY.

Matt Thalman
INO.com Contributor - ETFs
Follow me on Twitter @mthalman5513

Disclosure: This contributor did not hold positions in any company or fund mentioned above. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.