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ETF Specialist

HOLDRS ETFs With Low Fees and Low Valuations

An inexpensive way for ETF investors to access some undervalued sectors.

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One nice thing for investors about exchange-traded funds is that they come in so many different sizes. Some are incredibly diversified, holding hundreds--if not thousands--of stocks, while others offer very concentrated exposure to a given sector or geographic region.

The quirky suite of equity sector-themed HOLDRS funds, issued by a Bank of America Merrill Lynch subsidiary, falls into the latter category. And right now, three HOLDRS ETFs (in technology, pharmaceuticals, and banking) are trading well below their portfolios' respective price/fair value valuations, as calculated by our equity analyst staff, and represent compelling opportunities for investors.

Robert Goldsborough does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.