Five ETFs Hitting 2012 Highs

July 2nd at 7:01am by Tom Lydon

Various exchange traded fund categories have flirted with 52-week highs as the latest news out of the Eurozone looks positive on re-capitalizing certain EU banks. The ETFs that have managed upward movement are all from defensive or income yielding segments, on trend with what investors have been searching for.

“Naturally, the markets crave virtually any upside surprise from Eurozone summits. Of course, a band-aid may stop skin from bleeding, but it cannot cure an infection. Expect more flare-ups out of the region in the months ahead,” Gary Gordon for ETF Expert said.

The five market segments near 52-weak highs include:

  1. Non Cycylical Stock ETFs such as the Vanguard Utilities (NYSEArca: VPU), and  the SPDR Select Consumer Staples (NYSEArca: XLP) have hit new one year peaks. These sectors are not reliant on GDP reports. Consumer stocks are steady performers and many of the companies in this sector provide low-cost necessities that report reliable sales every year. [Why Consumer Staples ETFs are Holding Their Own]
  2. High yield corporate debt has been a sector that investors are bullish on. iShares High Yield Corporate (NYSEArca: HYG) as well as SPDR Barclay High Yield Bond (NYSEARca: JNK) have all registered new 52-week highs, reports Gordon. Furthermore, high-yield bonds are expected to exhibit solid returns through the end of the year.
  3. Preferred stock ETFs such as the Powershares Preferred (NYSEArca: PGX) has benefitted from the rebound in the financial sector seen earlier this year, and the relentless search for high yield. Preferred stocks can be less volatile than ordinary shares and yield a healthy income stream.
  4. The iShares JP Morgan Emerging Market Bond (NYSEArca: EMB) gives a yield of and gives great diversification benefits. This area of the bond market is known for high yields with exposure to emerging market growth.[ETF Spotlight: Emerging Market Debt]
  5. Dividend ETFs have been able to remain front stage and center for most of 2012. Throughout the May-June stock swoon, funds like iShares High Dividend Equity (NYSEArca: HDV) has hit new highs. These types of U.S. large cap ETFs have been yielding almost twice that of the S&P 500.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.