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The ETF Underdogs, Part 2: 5 More ETFs Under $50 Million AUM to Watch
Size matters for ETF business profitability, but it shouldn’t deter investors from exploring hidden gems.
Today, we’re going over part two of this series, where we profile some smaller, lesser-known ETFs that may have flown under your radar. These “under the table” funds might not make headlines, but they often offer unique strategies and opportunities for investors willing to look beyond the big names.
Why do these smaller ETFs matter? While you might only interact with them as an investor, on the business side, ETFs are also entrepreneurial ventures. Behind every fund is a team who have put their time, money, and effort into running a fund.
For these ETFs to remain profitable and sustainable, they need to accumulate enough assets under management (AUM)—typically, $50 million is the threshold where a fund becomes financially viable.
Using the ETF Central Screener, we’ve identified five NYSE-listed ETFs with under $50 million in AUM that stand out. These hidden gems may not have size on their side (yet), but they’re worth a closer look.
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Direxion Daily 7-10 Year Treasury Bull 3X Shares ETF (TYD)
As of January 3, the 10-year bond yield sits at 4.587%, continuing its upward trend over the past few months. This yield is a critical benchmark for global financial markets, as it influences borrowing costs, mortgage rates, and serves as a barometer for expectations about economic growth and inflation.
If you’re betting on the 10-year yield falling, the Direxion Daily 7-10 Year Treasury Bull 3X Shares ETF
Another unorthodox use for TYD is as a tool for capital efficiency. For example, by allocating just 20% of your portfolio to TYD, its 3x leverage delivers 60% notional exposure to bonds, freeing up the remaining capital for allocation to other asset classes.
BondBloxx USD High Yield Bond Healthcare Sector ETF XHYH-0.37%
You’re probably familiar with all the equity sector ETFs out there, but did you know something similar exists for fixed income? A great example is the BondBloxx USD High Yield Bond Healthcare Sector ETF
XHYH tracks the ICE Diversified US Cash Pay High Yield Healthcare Index, pooling below-investment-grade bonds issued by companies in health facilities, health services, managed care, medical products, and pharmaceuticals.
Currently, the ETF offers an attractive 7.44% yield to maturity, paired with relatively low-interest rate risk thanks to its 3.33-year duration. It’s also surprisingly affordable for such a niche offering, with an expense ratio of just 0.35%.
Invesco Investment Grade Defensive ETF IIGD-0.26%
The quality factor isn’t just for equity ETFs—you can target it in fixed income too, and the Invesco Investment Grade Defensive ETF
IIGD tracks the proprietary Invesco Investment Grade Defensive Index, which screens and weights holdings based on a quality score. This formula emphasizes bonds with higher credit ratings and shorter maturities, offering a more defensive fixed-income approach.
Currently, the majority of bonds in IIGD are rated AA and A, compared to the usual BBB found in most investment-grade corporate bond ETFs. Additionally, 73% of its holdings have maturities between 1-5 years, making it a solid choice for conservative fixed-income investors.
GraniteShares Platinum Trust (PLTM)
Gold’s robust performance in 2024 overshadowed many other precious metals, including platinum, which is widely used beyond jewelry in industrial applications such as catalytic converters and fuel cells.
If you’re interested in platinum, you don’t need to deal with physical bullion or navigate finicky closed-end trusts that can trade at significant discounts or premiums to their net asset value (NAV). Instead, consider grantor trusts like the GraniteShares Platinum Trust
For a 0.50% sponsor fee, PLTM tracks the spot price of platinum and is fully physically backed. The trust publishes a daily list of its bullion holdings, undergoes biannual vault audits, and cannot lend its metal or hold derivatives, ensuring transparency and security for investors.
Global X MSCI Norway ETF (NORW)
While iShares offers a broad list of country-specific ETFs, Global X ETFs is where you’ll find truly niche, hard-to-find locales beyond the usual suspects.
Case in point: the Global X MSCI Norway ETF
Why invest in Norway? Despite being underweighted in most European indices, Norway boasts a stable economy, a robust social security system, and one of the world’s largest sovereign wealth funds, fueled by its extensive energy reserves.
This article is for informational purposes only and does not in any way constitute investment advice. The author may express their own opinions, which may not represent the opinions of ETF Central or its affiliated partners. It is essential that you seek advice from a registered financial professional prior to making any investment decisions.
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