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The Smartest ETFs to Buy With $100 Right Now

By Sean Williams – Sep 24, 2021 at 5:51AM

Key Points

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Exchange-traded funds are a wise way to invest in some of the market's hottest trends.

For the past 18 months, investors have been privy to a historic rally. It took less than 17 months for the benchmark S&P 500 to double after losing roughly a third of its value in under five weeks during the first quarter of 2020.

Yet even after this monster rally, long-term investors can still find bargains. The thing is, investors don't have to buy individual stocks to take advantage of these great deals. A number of exchange-traded funds (ETFs) -- securities that trade like a stock but hold a basket of pooled investments -- look ripe for the picking.

Best of all, you don't need a boatload of cash to build wealth with ETFs. If you have $100 ready to put to work, which won't be needed to cover bills or emergencies, these are some of the smartest ETFs you can buy right now.

An open antique pocket watch set atop a one hundred dollar bill.

Image source: Getty Images.

AdvisorShares Pure U.S. Cannabis ETF

Perhaps the best way to generate some serious green is to directly invest in it. That's why the AdvisorShares Pure U.S. Cannabis (MSOS 4.37%) ETF is potentially the most attractive ETF to buy right now.

Globally, cannabis should be one of the fastest-growing industries this decade. But there's a big difference between the U.S. pot market and other countries. According to cannabis analytics company BDSA, Canada, which legalized adult-use weed in October 2018, should hit $6.4 billion in annual sales by 2026. Meanwhile, New Frontier Data has the U.S. budding to north of $41 billion in sales by 2025.

Furthermore, U.S. marijuana stocks are able to thrive, even with the U.S. federal government thus far failing to pass cannabis reform measures. We've watched 36 states legalize medical marijuana, half of which also have laws on the books to allow for recreational consumption and/or retail sale. With the Justice Department allowing individual states to regulate their industries, there's more than enough clarity for U.S. pot stocks to succeed.

The AdvisorShares Pure U.S. Cannabis ETF held 30 different U.S. weed stocks as of this past weekend, with a big focus on multistate operators (MSOs). Many of these MSOs control the seed-to-sale process in the states they operate. This helps to lower costs and keep quality control in check. In aggregate, five MSOs made up about 53% of invested assets. 

This ETF's largest holding is Green Thumb Industries (GTBIF 0.54%), an MSO that's been profitable on a recurring basis for a year. Green Thumb has 65 operating stores, and enough licenses in its back pocket to open another four dozen locations. Many MSOs like Green Thumb tend to focus on big-dollar limited-license markets. States that purposely rein in competition are helping Green Thumb build up its brands and create a loyal following.

In a rapidly growing and evolving industry like cannabis, the AdvisorShares Pure U.S. Cannabis ETF is a smart buy.

An up-close view of a gold bar.

Image source: Getty Images.

VanEck Vectors Junior Gold Miners ETF

Another really smart ETF that can be purchased right now with $100 is the VanEck Vectors Junior Gold Miners ETF (GDXJ -1.96%). A "junior mining stock" is a generally smaller market cap miner that's often reinvesting a lot of its operating cash flow into developing its assets.

Why junior mining stocks instead of larger, more established gold stocks? While I believe both groups are going to do just fine, larger mining stocks took on a lot of debt during the previous bull market run for physical gold that ended in 2011. Although these larger miners have made excellent progress in reducing their debt loads in recent years, you'll often find more financial flexibility with junior gold miners.

From a macro perspective, junior miners look set to benefit from higher physical gold prices. Despite gold lagging the market in 2021, the tailwinds for the lustrous yellow metal are as strong as ever. Near-record-low bond yields coupled with rapidly rising inflation over the past couple of months should encourage investors to put their money to work in gold as a store of value. A $2,000-plus per-ounce price for physical gold isn't out of the question.

As of this past weekend, the VanEck Vectors Junior Gold Miners ETF gave investors exposure to 100 holdings. Even better, while junior miners aren't known for paying dividends, the 0.55% yield of this ETF offsets its 0.52% net expense ratio. Thus, you're getting access to potentially faster-growing gold stocks for free, if you account for the distributions.

I'd be remiss if I didn't note that my largest personal portfolio holding, SSR Mining (SSRM 0.29%), is the sixth-largest holding of this ETF. SSR Mining combined with Turkey's Alacer Gold last year in a merger of equals that effectively doubled annual production. The new SSR anticipates annual production of 700,000 gold equivalent ounces (GEO) to 800,000 GEO through mid-decade, as well as $450 million in annual free cash flow this year and in 2022. With the company sporting over $500 million in net cash, it's also begun paying a dividend and has a share buyback program in place.

SSR Mining is the perfect example of a gem within this fund that can power your investment higher.

A dog seated on a couch and surrounded by its human family.

Image source: Getty Images.

ProShares Pet Care ETF

A third ETF that would be extremely smart to buy right now with $100 is the ProShares Pet Care ETF (PAWZ 0.88%).

While there are plenty of fast-growing trends investors can chase, including cloud services, cybersecurity, and artificial intelligence, there might not be a more consistent growth opportunity than companion animals.

According to data from the American Pet Products Association (APPA), pet ownership has increased from 56% of American households in 1988 to 70% in the 2021-2022 APPA National Pet Owners Survey. That's more than 90 million U.S. households. It's been at least a quarter of a century since year-over-year spending on our furry family members has declined, with the APPA projecting almost $110 billion in companion animal expenditures in 2021. The data has demonstrated time and again that owners will spend a pretty penny to ensure the happiness and well-being of their pet.

As of this past weekend, the ProShares Pet Care ETF owned stakes in 32 pet care companies, with the five largest holdings accounting for just shy of 45% of total fund assets. The one that's truly been something special is Freshpet (FRPT 4.56%), the fifth-largest holding.

Just as we saw organic and natural foods take hold in grocery store aisles in the 2000s, pet owners are willingly shelling out big bucks for organic and natural foods for their pets. Freshpet has been busy expanding into new retail doors and is still in the early stages of its marketing campaign designed to boost its brands' visibility.

Pet care is about as recession-resistant an industry as investors are going to find. A $100 investment in the ProShares Pet Care ETF could fetch some very nice long-term returns.

Sean Williams owns shares of SSR Mining Inc. The Motley Fool owns shares of and recommends Freshpet and Green Thumb Industries. The Motley Fool has a disclosure policy.

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