There are thousands of ETFs that you can invest in, and some of them are niche ETFs. They aren’t great investments for everyone, but if you do some homework, you may be able to put a small portion (no more than 10-15%) of your investments into niche ETFs. One negative with niche ETFs is that they may not have a specific index to follow, so funds investing in the same niche may have very different looking investment portfolios. Below are is a table with information about four Robotics ETFs: ROBO, BOTZ, IRBO, and ROBT.
All four of these funds are ‘Robotics’ ETFs, but as you can see the ‘Number of Holdings’ has a wide range, as does the weighting of the positions. While iRobot is the top holding for ROBO and ROBT, it is the 17th largest holding for BOTZ. So with niche ETFs, you need to do extra work to figure out what you’re actually investing in.
Below, in table 4, you can see a comparison of a $10,000 investment held in each of the ETFs for 20 years. Since niche ETFs can vary widely, as seen above, the returns are likely to vary between each fund as well.
In summary, if you’re investing in niche ETFs, make sure you are doing your homework before you commit your money to the funds.
Disclaimer: Any of the stocks, bonds, mutual funds, or exchange traded funds (ETFs) mentioned in this post or any other post are not a recommendation for purchase. Always do your own research to make an investment decision or consult a finance professional if you so desire. When considering selling any investments, you should consult a tax professional to discuss tax implications.