Three Niche ETFs Breaking Out

The ETF industry continues to grow in size each year with new and innovative ETFs available to individual investors. A sizable portion of the new ETFs being launched are focusing on small corners of the market and provide investors with investment strategies that were once impossible to capture. With the U.S. stock market once again hitting all-time levels, these so-called “niche ETFs” are enjoying an influx of money from Main Street investors.

Limelight Niche ETFs

The ALPS Medical Breakthroughs ETF SBIO, the ARK ETF Trust ARKG, and the Global X Funds LIT are a few of the niche ETFs that have been outperforming in the recent breakout and are grabbing the attention of the investment community.

ALPS Medical Breakthroughs ETF

SBIO is made up of 75 small- and medium-sized companies with a market cap ranging between $200 million and $5 billion.

The top individual holdings include:

• NPS Pharmaceuticals, Inc. NPSP with a 5 percent holding
• Akorn, Inc. AKRK at 4.7 percent
• Pacira Pharmaceuticals Inc PCRX coming in at 4.2 percent

SBIO is up almost 12 percent since its December 31 inception and is on pace to have its highest close ever this week. A close above $27.60 is a major breakout for the niche ETF. SBIO has an expense ratio of 0.50 percent.

ARK Funds Genomic Revolution Multi-Sector ETF

ARKG is made up of 46 biotechnology companies that are focused on (and are expected to substantially benefit from) enhancing the quality of human and other life through their scientific developments.

The top individual holdings include:

• Foundation Medicine Inc FMI at 6.5 percent
• Illumina, Inc. ILMN making up 5.8 percent of the ETF
• Monsanto Company MON coming in at 5.1 percent

ARKG is up 14 percent since its inception in early November and is in the midst of a breakout from a month-long consolidation pattern. The ETF has an expense ratio of 0.95 percent.

Related Link: 2 Unlikely Year-To-Date ETF Performance Leaders

Global X Lithium ETF

LIT is made up of 24 companies that are actively involved in the exploration, mining of lithium or the production of lithium batteries.

The top holdings include:

• FMC Corp FMC with a 19.4 percent holding
• Albemarle Corporation ALB at 11.7 percent
• Sociedad Quimica y Minera de Chile (ADR) SQM coming in at 10.4 percent

LIT is down 8 percent over the last 12 months and down 13 percent over the last six months. However, the ETF has been breaking out over the last week to the best level in over three months. The current action is suggesting a bottom has been formed and that a new uptrend is in the early stages. The ETF has an expense ratio of 0.75 percent.