2 ETFs For Investing In Robinhood's Most Popular Stocks

Robinhood has gained widespread attention amid the coronavirus pandemic. Its popularity has soared with its target audience: millennials. The app aims to make trading more accessible with its commission-free, easy-to-use service.

Beyond the platform, Robinhood's daily 100 most popular stocks have attracted investors' attention as it provides a glimpse at what stocks are trending, at least for Robinhood users. The eclectic list includes everything from tech names, travel and leisure companies, electric vehicle stocks, oil giants, stocks under $10 and exchange-traded funds (ETFs).

For those looking for broad exposure to stocks favored by Robinhood users without the daily volatility of individual stocks, here are two ETFs are worth considering:

1. iShares Edge MSCI USA Quality Factor ETF

• Current Price: $104.25
• 52-Week Range: $68.20 - 105.05
• Dividend Yield (TTM-Trailing Twelve Month): 1.6%
• Expense Ratio: 0.15% per year, or $15 on a $10,000 investment
  
  

The iShares Edge MSCI USA Quality Factor ETF (NYSE:QUAL), invests in large- and mid-capitalization US stocks as identified by three fundamental variables: return on equity, earnings variability and debt-to-equity.

QUAL, which includes 125 holdings, tracks the investment results of the MSCI USA Sector Neutral Quality index.

The most important sectors by weighting are Information Technology (26.89%), Healthcare (14.42%), Consumer Discretionary (11.21%), Communication (11.11%) and Financials (9.85%).

QUAL's top five companies are all among the most-traded Robinhood shares, including Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Coca-Cola (NYSE:KO), Nike (NYSE:NKE) and Microsoft (NASDAQ:MSFT). The top ten holdings make up about a third of net assets, which stand at around $19.3 billion.

Other stocks QUAL holds that are on Robinhood's list are Alphabet Class C (NASDAQ:GOOGL) and Class A (GOOG), Walt Disney Company (NYSE:DIS), Exxon Mobil (NYSE:XOM), Intel (NASDAQ:INTC), Johnson & Johnson (NYSE:JNJ), Pfizer (NYSE:PFE) and Visa (NYSE:V).

QUAL Weekly Chart

So far this year, QUAL is down about 3.3%. However, in February the fund hit an all-time high of $105.32, only to see a 52-week low in March. Yet since early spring, QUAL has gone up by over 50%.

While market participants are eyeing a new all-time high for the ETF, there will likely be some short-term profit-taking around the corner. Long-term investors may consider committing new capital to QUAL, especially if the price declines below $100 and toward the $95-level.

2. ERShares Entrepreneur 30 ETF (ENTR)

• Current Price: $23.50
• 52-Week Range: $14.00 - 23.72
• Dividend Yield (TTM-Trailing Twelve Month): 0.73%
• Expense Ratio: 0.49% per year, or $49 on a $10,000 investment

The ERShares Entrepreneur 30 ETF (NYSE:ENTR), holds shares in the 30 largest US companies by market cap that meet six standards, including low executive turnover, large stakes among key stakeholders, profitability, aligned executive compensation packages, minimum revenue and revenue growth and other company statistics.

ENTR's sector allocation by weighting is Technology (51.73%), Consumer Cyclicals (21.02%), Healthcare (16.46%), Financials (6.82%) and Industrials (3.98%).

The top ten holdings make up about half of the fund. ENTR's top five companies are Amazon.com (NASDAQ:AMZN), Alphabet Class A (GOOGL), Facebook, NVIDIA, (NASDAQ:NVDA) and Netflix (NASDAQ:NFLX), all of which are among the most-popular Robinhood shares.

Several other ETF holdings also on the Robinhood list include Square (NYSE:SQ), Tesla (NASDAQ:TSLA), Twitter (NYSE:TWTR) and Zoom Video Communications (NASDAQ:ZM).

ENTR Weekly Chart

Year-to-date, ENTR is up over 27%. And since March, the fund is up close to 67%. On Aug. 5, the fund hit an all-time high of $23.54. Long-term investors may consider buying the dips, especially if there is profit-taking that may push the price toward the $20 level.

Bottom Line

Today, we covered two ETFs providing exposure to a range of companies that are currently on Robinhood's most popular list.

In addition to individual shares, there are several exchange-traded funds that made Robinhood's top 100:

• SPDR S&P 500 ETF (NYSE:SPY) (covered here)
• Vanguard S&P 500 ETF (NYSE:VOO)
• Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (NYSE:GUSH)
• Invesco S&P 500 High Div Low Volatility ETF (NYSE:SPHD)
• ProShares Ultra Bloomberg Crude Oil (NYSE:UCO)
• United States Oil Fund (NYSE:USO)

We plan to address many of these funds in the future.