Attention shoppers: There may be bargains on aisle five, but when it comes to financial markets, price does not always tell the entire story regarding a stock’s value.
For example, a $20 stock can be richly valued while a $200 stock can be considered inexpensive on valuation. Still, some capital-constrained investors use a stock or ETF’s price tag as an evaluation tool.
Those looking for low-price tag ETFs have some options, but not a massive amount. In the rapidly expanding universe of U.S.-listed exchange traded products, there are roughly 80 ETPs trading with price tags of $15 or below and that includes plain vanilla ETFs, leveraged funds and exchange traded notes (ETNs).
An issue investors hunting for small price tag ETFs need to be aware is the potential for reverse splits, a commonly employed tactic used to artificially inflate ETF share prices to appease traders. [Direxion to Reverse Split 7 ETFs, Forward Split Two]
With that disclaimer out of the way, the following is a list of 10 sub-$15 ETFs with explanations for how they got there. Some of these ETFs may offer upside. Others could be headed for a trip down Reverse Split Boulevard.
Leveraged funds were excluded.
Powershares Wilderhill Clean Energy Portfolio (NYSEArca: PBW)
Current price: Around $6.50
YTD Performance: Up 50%
Comment: For just $4.25 in January, investors could have gotten in on PBW, which should be noted has almost $220 million in assets under management. And for the price of a latte, PBW has delivered much, much more than the fleeting satisfaction of pricey coffee drinks. Clean energy ETFs have been stellar performers this year and PBW has, until recently, benefited from small allocations to Elon Musk’s companies: SolarCity (NasdaqGM: SCTY) and Tesla (NasdaqGM: TSLA). [Why Clean Energy ETFs are Cleaning Up]
PowerShares Global Clean Energy Portfolio (NYSEArca: PBD)
Current Price: $11.90
YTD: Up 47%
Comment: Another clean energy play with a dash of SolarCity and Tesla (a combined 3.4% of the ETF’s weight). Roughly 38.5% of PBD’s portfolio is tilted to small-caps. Things could get interesting for PBD if it takes out its third-quarter 2011 highs.
First Trust ISE Global Wind Energy Index Fund (NYSEArca: FAN)
Current Price: $11.30
YTD: Up 60%
Comment: FAN should be commended for its 2013 bullishness because it holds no solar stocks, nor does it hold any Musk stocks. FAN is a play on a Eurozone recovery as Spain and Germany combine for 40.3% of the fund’s weight. [Alternative Energy ETFs Win in Fiscal Cliff Deal]
Global X Copper Miners ETF (NYSEArca: COPX)
Current Price: $9.55
YTD: Down 30%
Comment: Base metals miners have been nearly as bad as their precious metals counterparts and that explains the 30% drop for COPX. Improving Chinese data has started to help COPX as it is up almost 3% in the past month.
EGShares India Small Cap Fund (NYSEArca: SCIN)
Current Price: $10.50
YTD: Down 31.5%
Comment: It has been a dismal year for India ETFs and the small-cap funds have been among the worst offenders. SCIN and rival plays appeared to be getting their respective acts together last month, but the fund is down 3% in the past week. [October’s 10 Best ETFs]
iShares Mortgage Real Estate Capped ETF (NYSEArca: REM)
Current Price: $11.63
YTD: Down 18%
Comment: Fun fact: REM is one of the rare ETFs with a dividend yield (north of 15%) that is well above its price tag. The scenario is easy to explain. Rising interest rates have punished mortgage REITs, triggering dividend cuts by REM holdings and significant share price retrenchement. [American Capital Slams mREIT ETFs]
Market Vectors Indonesia Small-Cap ETF (NYSEArca: IDXJ)
Current Price: $12.90
YTD: Down 15.6%
Comment: IDXJ’s 15.6% year-to-date slide masks a six-month loss of almost 35%. Like India ETFs, Indonesia funds have been slammed by a weakening currency and a widening current account deficit. IDXJ trades 21.4% below its 200-day moving average.
PowerShares High Yield Equity Dividend Achievers Portfolio (NYSEArca: PEY)
Current Price: $11.54
YTD: Up 19%.
Comment: PEY is useful on several fronts. The low price tag does not mean low yield as the ETF has a trailing 12-month yield of almost 3.8%. It gives investors 48% exposure to small-caps. Perhaps most important to the income investor, PEY delivers a monthly dividend.
iShares MSCI Japan ETF (NYSEArca: EWJ)
Current price: $11.70
YTD: Up 16.4%
Comment: That is right, the largest Japan ETF can be had for less than $12. EWJ is also one of the top-asset gathering ETFs of any stripe this year as investors have rushed to Japan ETFs due to the weak yen. EWJ is something of a good news/bad news story compared to rival currency hedged Japan ETFs. It will lag as the yen falls because it is not currency hedged, but it will not be as bad as its rivals if the yen rises.
First Trust Dow Jones STOXX Select Dividend 30 Index Fund (NYSEArca: FDD)
Current price: $13.22
YTD: Up 7.1%
Comment: Other Europe ETFs have outpaced FDD this year, but the $61.1 million fund offers a trailing month yield of 3.64%. Over 43% of FDD’s weight goes to the U.K. and Switzerland, which are not Eurozone countries. Additionally, FDD is fairly light on PIIGS exposure as Greece, Ireland and Portugal are not found in this ETF.