Small ETFs, Big Gains To Start 2013

Image via CrunchBase

 Chicago, Jan.28, stock advice .- Small ETFs, meaning those funds that labor below the much ballyhooed $100 million in assets under management watermark, are once again up to big things. At least some of them are.

Coming off a year in which some sub-$100 million funds were among the top performers in the ETF universe, select low-asset funds are again showing that ignoring an ETF on the basis of AUM can mean missing out on tidy returns.

Remember, an ETF's AUM total is not the only indicator of its potential profitability for the fund sponsor. The $100 million in AUM number also does not take into account an ETF manager's ability to make money through securities lending, licensing fees or other external costs related to ETF management.

With that in mind, here are some sub-$100 million ETFs that have been leaders to start the new year.

PowerShares NASDAQ Internet Portfolio (PNQI)

As was recently noted, some investors may perceive PNQI as being "illiquid" because of an average daily volume number that is below 12,000 shares. The reality is the least heavily traded of PNQI's top-10 holdings isEquinix (EQIX) at over 866,000 shares per day.

Housing heavily traded fares such as Amazon (AMZN), eBay (EBAY)and Google (GOOG) ensures PNQI is sufficiently liquid. Being an ETF focused on Internet names rather the broader technology sector means the fund has not been dealt a blow by Apple's (AAPL) woes. That means, including Friday's 1.4 percent gain, PNQI is up more than six percent year-to-date.

First Trust STOXX European Select Dividend Index Fund (FDD)

FDD has an interesting methodology as it starts by screening firms in the STOXX Europe 600 Index that have a positive five year dividend-per-share growth rate and a dividend to earnings-per-share ratio of 60 percent or less, according to First Trust ...