What ETFs Are Pulling Their Weight?
You can often measure the degree of an investor's attitude towards their holdings, whether risk-tolerant or conservative, based upon the number of ETFs they possess. Exchange-traded funds represent the newest means of investing in the stock market despite being nearly 30 years old, allowing investors to augment their portfolio based on value over an extremely short period of time -- usually a single trading day. The impermanence of ETFs doesn't make them poor choices for a long-term strategy, however. Just the opposite, in fact: while the S+P 500 and the Dow Jones have only gained a net one percent in value this year, there's been a choice few ETFs that have downright crushed the market. Here's some of the hottest available for investors today.
The eco revolution has already hit the stock market and allowed investors to capitalize on a smaller carbon footprint. At the conclusion of 2014, the price of oil had dropped so far and so fast that many investors chose to get out of green technology companies, believing that inexpensive fossil fuels spelled doom for the granola industry. However, as oil has turned back upwards in price -- look no further than gas once more creeping above $3 a gallon -- many renewable energy ETFs have seen their own fortunes rise in turn. The Guggenheim Solar ETF (TAN on the NYSE MKT, trading for $38.55 a share) has borne the fruit of these good fortunes, gaining over thirty percent in value during the first half of 2015. This ETF's holdings include not only American solar companies like First Solar but also international holdings like Hanergy Thin Film. Indeed, the solar companies from overseas have given a lot more boost to this ETF than the domestic businesses. Given that Guggenheim's current price sits well below their 52-week range, there's reason to think that it's poised for a strong upwards trajectory in the near future, making it a great choice for investors who either want quick results or who have the patience to ride out (and profit from) the wave of eco investment.
Few investments represent as much boom and bust potential as biosciences do. The biggest names offer steady returns while penny-stock biosciences offer the chance to get rich -- provided the IPO gets enough traction to be noticed and keep the company from going under. Those who prefer not to gamble with individual biotech companies can turn to a much more proven asset in the form of the SPDR S+R Biotech ETF (XBI on the NYSE MKT, trading for $246.94 a share). Unlike biotech-focused mutual funds, which heavily skew towards the biggest players on the market, SPDR Biotech utilizes an equal weighting approach in order to bring in value from both the top and the bottom of the stack. This diversification has given it plenty of good value, in the form of both steady growth from the big guns and strong performance from smaller entities. With 20% growth in 2015 and 65% growth in the past 52 weeks, this one ETF has outperformed the S+P 500 nearly sevenfold. As the United States continues to prioritize health spending, these companies will reap the benefit of more investment money, in turn providing your portfolio with good growth.
All About The Benjamins
Have you looked at headline after headline about Greece circling the drain and wondered if there's a way to profit from the misfortunes of austerity? Wonder no more. The WisdomTree Hedged Europe Equity Fund (HEDJ on the NYSE MKT) reflects the strength of the dollar relative to purchasing power of our biggest trade partners in Europe. Each time the dollar index rises, this equity fund rises as well, since it incorporates currency derivatives in addition to EU exporters who benefit from a weak Euro. These two sources have made the Europe Equity Fund into a perfect storm through 2015, thanks to a cruising dollar and a struggling Euro. This ETF has risen by twenty percent throughout the first six months of the year and appears poised to do much better for the foreseeable future; each time speculation about Greece or Fed interest rates pop up, so too will this ETF's value. The value here works for either short or long term investing: since the EU will likely suffer another recession in 2016, investors can expect the value to stay high. Conversely, those who want a faster buck can sell prior to the Federal Reserve's decision to raise interest rates, likely to occur after the end of the summer months.
It Pays To Be Secure
The very real threat of digital piracy has created a very real cash flow for cyber security companies that seek to protect Americans from the the quarter of a trillion dollars lost annually to e-theft. Since you cannot invest in the lucrative business of online piracy, do the next best thing and invest in the Purefunds ISE Cyber Security ETF (appropriately named HACK on the NYSE MKT, trading for $31.21 a share). This technology stock has been the first ETF to offer investors the opportunity to profit from the cybersecurity industry as it grows to a $15 billion business. This ETF offers stronger investment potential than individual companies due to the growing pains of cybersecurity -- who wants to buy security from a start-up? -- that limit the capability of any one company to snatch up a large amount of market share. With a 14% growth rate over the past year, Purefunds ISE has given far better dividends to investors than the market writ large. They're one of the very best ETFs for long-term investors, furthermore, since the CIA expects the cybersecurity industry to double in size by 2020. Get in on one of the surest bets in an unsure stock market by investing in one business that no other business can do without.