Five Low-Volume ETFs Worth A Look

Low-volume ETFs can get a bum wrap. An investor that looks at a given ETF's daily trading average on Yahoo Finance and sees a paltry number of less than 20,000 or 10,000 shares per day may just decide to evaluate other opportunities, leaving behind a good ETF just because of slack volume.

ETF detractors would lead us to believe that low volume means increased risk to the investor and a chance that the ETF will eventually be put to death by the issuer. Both scenarios can come true, but not at such an alarming rate that they become issues to keep ETF investors up at night.

Using a trailing three-month daily trading average of less than 50,000 shares, we decided to investigate five ETFs that could be considered low volume in terms of daily share turnover, but that are worth taking a gander at anyway. Here's our list.

1) iPath DJ-UBS Coffee TR Sub-Index ETN JO:
This one is somewhat surprising when considering that commodities are all the rage these days, but JO trades less than 28,000 shares per day. On a dollar basis, that's fine because the ETN goes for about $72 these days. The good news: Coffee prices and soft commodities in general are expected to keep moving higher, making JO worth a look. The sort of bad news: A seven-cent bid/ask spread.

2) Market Vectors China ETF PEK:
We recently highlighted this new kid on the China ETF block and believe it will be one of the better options when the emerging markets theme is restored. The AUM haul is decent enough here to tell us that despite average daily turnover of less than 10,000 shares, PEK has staying power. Be sure to use limit orders when buying PEK because the bid/ask can often be wide. (60 cents as of this writing).

3) IQ Australia Small Cap ETF KROO:
IndexIQ is really onto something with its suite of country-specific small-cap ETFs and we would include KROO on that list. With 38% exposure to the materials sector, KROO is truly representative of the Aussie economy. Average daily volume isn't terrible at almost 21,000 shares and the bid/ask is decent for an ETF of this nature at four cents.

4) Global X Brazil Consumer ETF BRAQ:
Like PEK, BRAQ is another ETF to come back to at a later date, that being whenever investors rekindle their love affair with Brazilian equities. Volume of almost 30,000 shares and an AUM haul of over $30 million ensure BRAQ won't be headed to the ETF graveyard anytime soon, but just wait a few months before rushing in here.

5) iShares S&P Global Consumer Staples Index Fund KXI:
Alright, KXI has pretty good volume by the standards of this list at almost 36,000 shares per day, but the bid/ask leaves something to be desired as it can be found between and 8 and 11 cents (or more). On the other hand, using a limit order and not actively trading KXI should mitigate the bid/ask impact. Besides, this is a good defensive play chock full of familiar consumer staples such as Kraft KFT, Procter & Gamble PG and PepsiCo PEP to name a few.