Can New Alcohol ETF Compete with Other Thematic ETFs?

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Fertilizers/ Potash ETF (NYSEARCA:SOIL) invests in fertilizer companies providing investors with an exposure to the agriculture industry. Half of the fund’s holding is in mid-cap stocks. There is a growing demand for higher agriculture yields as the land is a limited resource and the global population continues to grow. The fund holds 34 stocks out of which 51% of its allocation is concentrated in its top ten holdings. The fund offers a good geographical diversification with 23% allocation to USA stocks, while the remaining 77% is allocated towards international stocks. Fertilizers/ Potash ETF (NYSEARCA:SOIL) has an expense ratio of 0.69%. It has assets under management worth $9.5 million and is trading near the $8.60 level.

Market Vectors Nuclear Energy (ETF) (NYSEARCA:NLR) offers an exposure to companies engaged in nuclear power generation and production of uranium. Approximately 60% of its assets are allocated to its top ten holdings which include large USA utilities such as Duke Energy Corp (NYSE:DUK), Dominion Resources (NYSE:D), PG&E Corporation (NYSE:PCG), and Exelon Corp (NYSE:EXC). The fund offers a decent geographic diversification with 40% of its fund allocated to international stocks. This nuclear energy ETF has a good dividend yield of 3.5% and more than 90% of its assets are allocated to the utilities sector. With an expense ratio of 0.6% and $40 million of assets, the fund has returned 3.7% year-to-date. The last couple of months has seen a decline as utilities have become less attractive owing to higher expectations of an increase in interest rates by the FED. Moreover, the price pressure on uranium continues because of high inventory levels. Major USA coal companies are filing for bankruptcies in the wake of a tougher environment laws. Alternative and clean energy sources will benefit from this trend.

Robo-Stox Global Robotics and Automation Index ETF (NASDAQ:ROBO) has advanced by more than 12% since the beginning of the year and is currently trading close to its 52-week high price. This ETF has a relatively high expense ratio of 0.95%, with 27% of its assets allocated to Japanese stocks and 38% towards US stocks. The high expense ratio is because of its diversified international holdings and investments in relatively new companies. The robotics and automation segment is a rapidly growing new sector and offers a very high growth potential. The ETF mainly focuses on industrial and technology sector, which constitute 46% and 39% of its total asset allocation respectively. The top holdings of this fund include Yushin Precision Equipment Co ltd, Hollysys Automation Technologies Inc. (NASDAQ:HOLI), IRobot Corp (NASDAQ:IRBT) and Accuray Inc. (NASDAQ:ARAY). While developed markets such as Japan are rapidly adopting robots and automation technology even developing countries with low labor costs are increasingly using automation technology. Recently a textile company in India replaced 10,000 employees with robots. The world robot population is increasing and it is estimated that more than 1.4 million new industrial robots will be installed worldwide by 2019.

Disclosure: none

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