4 Triple-Digit ETFs to Consider (BOND, EMB, XLG)
Despite the lofty price tags (or maybe it is because of the high prices) investors are often seduced by triple-digit stocks. To prove the point, think about the stocks that ordinary investors spend plenty of time chatting about.
As the world's largest company by market value, Apple (NASDAQ: AAPL) is the king of triple-digit stocks. Stellar brand recognition means Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG) and Priceline (NASDAQ: PCLN) are also frequently mentioned in the triple-digit conversation. Intuitive Surgical (NASDAQ: ISRG) and Mastercard (NYSE: MA) are by no means anonymous stocks.
The reality is that finding stocks, and some well-known ones at that, trading for over $100 is not hard. Jump over to the ETF universe and the task is a little more difficult as less than five percent of the all exchange-traded products currently sport price tags in excess of $100, according to Finviz data.
Many are bond funds. A fair amount are obscure, but there are a few ETFs with high price tags that are worth paying up for. Here a few examples.
PIMCO Total Return ETF (NYSE: BOND) The PIMCO Total Return ETF, colloquially known as the Bill Gross ETF, is one ETF that can say it lived up to its pre-launch hype. Simply put, BOND is one of the most successful new ETFs of all-time. The fund debuted in early March and has since hauled in more than $2 billion in assets under management. Now the largest actively managed ETF on the market, BOND has gained almost four percent in the past three months, cementing its status as a triple-digit ETF darling.
However, BOND has been outperformed by some other bond funds over that time, including:
iShares J.P. Morgan USD Emerging Markets Bond Fund (NYSE: EMB) Dollar-denominated emerging markets bonds have been a favored asset class among yield-starved investors this year. That trend has boosted EMB to the tune of 7.5 percent year-to-date and 4.2 percent over the past three months.
EMB's top-five country weights are Brazil, Mexico, Russia, Turkey and the Philippines. The fund charges 0.6 percent year an has over $5 billion in AUM. Investors can find an alternative with a lower price tag in the form of the PowerShares Emerging Markets Sovereign Debt ETF (NYSE: PCY). PCY trades for less than $30 while EMB is flirting with $118.
SPDR Dow Jones Total Market ETF (NYSE: TMW) The SPDR Dow Jones Total Market is one of the more anonymous members of the triple-digit ETF club. Home to almost 980 stocks, TMW offers a low expense ratio of 0.2 percent and the fun is by no means small with $426.6 million in AUM. Year-to-date, TMW has gained almost 9.3 percent, though that lags the performance of another triple-digit ETF, the SPDR S&P 500 (NYSE: SPY).
Guggenheim Russell Top 50 ETF (NYSE: XLG) Formerly the Rydex Russell Top 50 ETF, XLG currently trades barely above $100 and is another example of a large ETF that does not grab a lot of headlines. Indeed, it is possible for an ETF to have almost $476 million in AUM and not be the talk of the town.
XLG does not do anything fancy, it simply tracks the Russell Top 50 Index. That means Apple is the fund's largest holding with an allocation of 9.1 percent. Exxon Mobil (NYSE: XOM) is next. Other top-10 holdings include Microsoft (NASDAQ: MSFT), Chevron (NYSE: CVX) and AT&T (NYSE: T).
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