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  Title	Undercovered Dozen ETF Edition: Treasury Bonds, Uranium And Copper Miners, Undervalued AI +
  ID	3298384
  External ID	7219459258
  Author	Unknown
  Published Date	Oct. 16, 2024, 3:21 p.m.
  Summary	Oct. 16, 2024 4:15 PM ET AMD AMD:CA CCJ CCO:CA CHAT COPX CWEB GOOG GOOG:CA GOOGL ICLN ITA META META:CA MSFT MSFT:CA NVDA NVDA:CA PPA QDEF QQQI QYLG SCHD SH SHV SJNK SRUUF TSLA TSLA:CA U.U:CA U.UN:CA
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  URL	https://seekingalpha.com/article/4727194-undercovered-dozen-etf-edition-treasury-bonds-uranium-and-copper-miners-undervalued-ai-plus
  Sentiment	Negative: 0.01684    Neutral: 0.94177    Positive: 0.04139
  Relevance	0.02500

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  Content ID	1684126
  Key	6c5b6314-5f31-4473-bc64-f4d13776868d
  Content	Oct. 16, 2024 4:15 PM ET AMD AMD:CA CCJ CCO:CA CHAT COPX CWEB GOOG GOOG:CA GOOGL ICLN ITA META META:CA MSFT MSFT:CA NVDA NVDA:CA PPA QDEF QQQI QYLG SCHD SH SHV SJNK SRUUF TSLA TSLA:CA U.U:CA U.UN:CA URNJ URNM VHYAX VIHAX VYM XAR YLLXF DHS The Undercovered Dozen Follower s Follow Play 15min Summary The 'Undercovered' Dozen ETF edition highlights less covered ETFs, focusing on seven in-depth analyses and five brief mentions, from articles published between September 17th and October 15th. Colorado Wealth Management Fun recommends holding iShares Short Treasury Bond ETF for low-volatility cash parking, while Kevin Shan rates NEOS NASDAQ-100® High Income ETF a Buy for its dynamic options strategy. Bang For The Buck sees Sprott Junior Uranium Miners ETF as a Buy due to long-term uranium contract strength, and Hedge Insider recommends Roundhill Generative AI & Technology ETF for its balanced AI-focused portfolio. Additional mentions include SPDR® Bloomberg Short Term High Yield Bond ETF (Sell), Direxion Daily CSI China Internet Bull 2x Shares ETF (Buy), and iShares Global Clean Energy ETF (Sell) among others. Take a look and share your thoughts: Are any of these worth a deeper review? And are there other undercovered ETFs that you like? WendellandCarolyn/iStock via Getty Images Introduction The 'Undercovered' Dozen series is an effort to highlight undercovered stocks on our platform for you to have another source for idea generation. Today, we're focused explicitly on lesser covered exchange-traded funds. The structure of the article will be the same as previous editions: seven articles are highlighted as primary features with an in-depth glimpse of the author's thesis provided as an excerpt, while five others are included with fewer details. In this one, we are looking at ETFs from articles published between September 17th - October 15th. Take a look at what these ideas might hold for you. And please join the conversation below to share what you think: are any of these worth following up on? And are there other undercovered ETFs that you like? My Replacement For Cash: SHV Colorado Wealth Management Fun | Hold It's time for a quick look at the iShares Short Treasury Bond ETF (NASDAQ: SHV This is a very simple ETF. It holds short-term Treasuries. The duration is very low, and the credit quality is all Treasuries, so you can expect volatility to be extremely low. The 52-week range is from $109.85 to $110.63. That's quite a bit less than a 1% move for the very wildest trades. You can see that it simply moves up before going ex-dividend, then drops on the ex-dividend date. There are a few ETFs you can use for this kind of exposure. I find them particularly useful for parking cash, so I can earn a respectable interest rate. Sure, there's a small expense ratio of .15%, but it's hard to do better. It beats leaving money in checking or savings to get paid less than a quarter of a percent. Maybe your bank pays out well, but that hasn't been my experience. I keep most of my idle cash in my Charles Schwab account and put it in SHV. There are mutual fund options as well, but I've always been more familiar with using ETFs. Consequently, I use SHV to hold the majority of my cash. QQQI ETF: Options Strategy Provides Better Capital Appreciation Kevin Shan | Buy Nearly two weeks ago, I wrote an article discussing the Global X Nasdaq 100® Covered Call & Growth ETF ( QYLG ). It's a fund I regarded as too simple with its options strategy, which isn't always good when selling covered calls. Far better NASDAQ 100 buy-write funds exist today, and it's only natural that I discuss some of them. One better alternative is the NEOS NASDAQ-100® High Income ETF QQQI ). This fund employs a more dynamic options strategy than its peers, leading to QQQI outperforming other NASDAQ 100 covered call funds while yielding 15.16% based on its most recent distributions. Of course, tradeoffs always exist, especially with yields in the double-digit range. However, the overall performance of QQQI overcomes some of these problems, justifying a Buy rating. What separates QQQI from other NASDAQ 100 buy-write funds is its dynamic call option strategy. While NEOS will generally sell their call options out-of-the-money, the percentage out-of-the-money and the portion of the portfolio that's covered varies depending on market conditions. Little adjustments (as long as they're the right adjustments) can increase total returns without sacrificing too much on the distribution side. This is what QQQI has shown. URNJ: The Demand For Uranium Continues To Grow Bang For The Buck | Buy The Sprott Junior Uranium Miners ETF (NASDAQ: URNJ ) was launched in early 2023 as more of a pure play investment option for uranium miners. Sprott also has the Uranium Miners ETF ( URNM ), which is the larger of the two ETFs, and it has a history going back to late 2019. I have covered URNJ a few times since it was launched, and my prior articles on the ETF can be found here. There is a lot of overlap between the two ETFs, but the main difference is that the two largest uranium mining companies Cameco ( CCJ ) & Kazatomprom and the two larger uranium investment vehicles the Sprott Physical Uranium Trust ( OTCPK:SRUUF ) & Yellow Cake ( OTCQX:YLLXF ) are not in URNJ. So, it invests exclusively in uranium mining companies, with a weighting towards the stocks below the largest ones in the industry. Some reaction for uranium miners following the recent spot market weakness is understandable, but I would argue the long-term contract price is at least as important for uranium miners, and that has continued to show strength. So, I consider the current underperformance for URNJ excessive and has provided a great buying opportunity, especially given the positive developments in the nuclear industry. COPX: A Good ETF In A Likely Overbought Copper Market The Methodical Investor | Hold Copper prices have been on a wild ride this past year, after oscillating for months around $3.75/lb, the price rocketed up past the $5 handle in May before eventually falling back below $4 in August. In recent days, however, it rallied again on the back of Bank of China stimulus news. Given these heightened levels of price volatility, the first question then becomes: will this most recent rally have legs or will it eventually sputter out like the April-May price move eventually did? And the second question is whether the Global X Copper Miners ETF COPX ) is a good vehicle for investors to gain exposure to the copper sector. The current case for copper is much stronger than that for many other industrial metals. The transition to electric vehicles, which I discussed at length in a previous article on Tesla Inc. ( TSLA ), as well as the concerted global move towards less carbon-intensive sources of electricity will require a lot more of it. In fact, the exhibit below shows how electric vehicles require more than double the amount of copper per vehicle than do vehicles with Internal Combustion Engines. CHAT ETF: A Surprisingly Undervalued AI Fund Hedge Insider | Strong Buy Roundhill Generative AI & Technology ETF CHAT ) is an exchange-traded fund set up on May 18, 2023, to invest in companies that are contributing significantly either directly or indirectly to generative artificial intelligence innovations. The top 5 holdings include Nvidia Corp. ( NVDA ), Alphabet Inc. ( GOOGL ), Microsoft Corp. ( MSFT ), Meta Platforms Inc. ( META ), and Advanced Micro Devices Inc. ( AMD ). These holdings each represented around 4-7% of the overall portfolio, while the portfolio as a whole has 46 stocks. The stock ticker "CHAT" is a clear reference to chat-based generative AI made famous since late 2022 by OpenAI's flagship product "ChatGPT", which is essentially an online portal through which users can access OpenAI's large language models ("LLMs"). However, generative AI extends beyond this self-limiting financial moniker, into video, audio, and multi-modal AI systems. To be honest, I think the portfolio construction is a little primitive, since while it is broad and extends across the world, it forgets obvious would-be inclusions such as Tesla, Inc. ( TSLA ), which is working on some cutting-edge self-driving AI technology. Nevertheless, the portfolio is nicely balanced across various stocks, not heavily concentrated in just a couple of stocks, and the thematic is generally well represented. SH ETF: An Effective Market Hedge With Hidden Income Stuart Alssopp | Strong Buy I believe that the ProShares Short S&P500 ETF SH ) offers a great way for investors to hedge against recent market gains and benefit from the income differential between short-term interest rates and the S&P500 dividend yield. While the SH has lost 19% over the past year, it has done so despite 34% total return gains in the S&P500, which should have theoretically resulted in a 25% SH decline. The difference reflects income received on its T-bill holdings as well as returns correlated to low volatility. These factors suggest that unless we see continued strong expansion of S&P500 valuation multiples, the SH should generate positive returns over the next 12 months, while any valuation compression could see the ETF surge higher. While the SH ETF is seen as a way to benefit from short-term decline in the S&P500, it has performed well in the past over several years following periods when interest rates were significantly above the equity dividend yield as they are today. Over the past year, the SH has generated over 8% returns in excess of what would have been expected based on the performance of the S&P500, and we should expect a repeat of this over the next 12 months, strongly suggesting positive returns for the SH. QDEF: A Low Volatility Dividend ETF Outperforming Peers Carlos R. Tartarini | Buy The FlexShares Quality Dividend Defensive Index Fund QDEF ) has a distinct approach among dividend-oriented funds. Unlike many funds that focus heavily on yields, QDEF seeks to structure a portfolio with a quality orientation and below-average volatility. With an allocation relatively close to broader market indexes, QDEF maintains a large exposure to technology stocks but is underweight in energy and utilities, as opposed to typical dividend ETFs, which often carry heavy positions in these areas. This allocation profile has strongly contributed to QDEF's outperformance over its peers. As the outlook remains generally benign for the stock market, I have a positive view of this fund, given its potential to deliver capital gains in the long run with relatively limited volatility. QDEF is a fund that provides access to high-quality, income-oriented U.S. mid and large-cap companies, targeting to achieve lower volatility than the broader market. It tracks the investment results of the Northern Trust Quality Dividend Defensive Index. The Other Five Fit For Mention SJNK: Low-Volatility Junk Bond ETF Fred Piard | Sell SPDR® Bloomberg Short Term High Yield Bond ETF SJNK ) aims to reduce risk by focusing on junk bonds with maturities under 5 years. SJNK is well-diversified across sectors and issuers, with a significant allocation to consumer cyclicals and industrials. Despite marginally outperforming a junk bond benchmark, SJNK has suffered significant value decay and underperformed "fallen angels" ETFs. CWEB: Set For Re-Rating Once Deflation Stabilizes Theme Catcher Invest | Buy Direxion Daily CSI China Internet Bull 2x Shares ETF CWEB ) is a leveraged ETF focused on Chinese internet stocks, which act as proxies for China's mass consumption sector, including e-commerce and mobile gaming companies. Persistent deflation and weak consumption in China have led to low valuations for these stocks, despite robust EBITDA growth and share buyback programs. The Chinese government is shifting towards aggressive fiscal and monetary policies to combat deflation, which should stabilize consumption and re-rate these stocks. DHS: Avoid in Favor of Other High Yield Dividend ETFs ValueVole | Sell The WisdomTree U.S. High Dividend Fund DHS ) offers high dividend yields but suffers from high expense ratios, erratic dividend growth, and poor performance during economic distress. DHS is heavily concentrated in Financials, Energy, and Real Estate sectors, leading to potential underperformance in future economic downturns. Alternatives like Vanguard High Dividend Yield Index Fund ( VYM ) and Schwab U.S. Dividend Equity ETF ( SCHD ) offer lower costs, more consistent dividend growth, and better capital preservation. ITA's Valuation Is Elevated As Its Secular Growth Trend Has Been Priced In MTS Insights | Hold The iShares U.S. Aerospace & Defense ETF ITA ) offers exposure to US aerospace and defense companies, with a focus on large-cap stocks and growth investments. The ETF benefits from global military spending trends, particularly NATO's increased defense budgets, despite US fiscal constraints and budgetary pressures. Valuations for ITA are stretched due to recent gains, making it less attractive compared to peers. Given the current valuation and budgetary constraints, I rate ITA as a Hold, preferring ( XAR ) or ( PPA ) for new positions in the sector. The iShares Global Clean Energy ETF: Right Theme, Wrong Instrument Gaudi Schneider | Sell Despite its consistent underperformance, the iShares Global Clean Energy ETF ICLN ) is one of the most popular thematic ETF's with an asset base of 2Bn USD AUM. Investors in the fund are not only exposed to the wind and solar industry, but a range of other risk factors, as well as size and style bias. Even with record public funds financing the transition to clean energy, the fund's portfolio construction might not make it a targeted enough investment to participate in this theme. Data by YCharts Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. This article was written by The Undercovered Dozen Follower s Follow Some tickers are covered more than others on the site, so with The Undercovered Dozen our Editors highlight twelve actionable investment ideas on tickers with less coverage. These ideas can range from "boring" large caps to promising up-and-coming small caps. Specifically, the inclusion criteria for "undercovered" include: market cap greater than $100 million, more than 800 symbol page views in the last 90 days on Seeking Alpha, and fewer than two articles published in the past 30 days. Follow this account to receive a weekly review of twelve of these undercovered ideas from our valued analysts. Show more Show more Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given that any particular security, portfolio, transaction or investment strategy is suitable for any specific person. The author is not advising you personally concerning the nature, potential, value or suitability of any particular security or other matter. You alone are solely responsible for determining whether any investment, security or strategy, or any product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. The author is an employee of Seeking Alpha. Any views or opinions expressed herein may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Like Share Print Comment Recommended For You Comments Recommended For You
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