As the U.S. economy grows and employment rates improve, the bulls are emerging. If you’re a believer in the recovery, you may want to shift your gaze somewhat from foreign markets and look back inward to domestic equity exchange traded funds (ETFs).
Ethan Anderson, portfolio manager at Rehmann Financial, stated that “right now, we favor domestic markets—it just seems to be a bit more stable and a bit more certain of a story,” reports JeeYeon Park for CNBC. [10 ETFs to Play Byron Wien’s 2011 Predictions.]
David Katz, chief investment officer at Matrix Asset Advisors, also commented that investors in emerging markets could expect a high volatility in the short-term, but the long-term outlook still looks fine, adding “we think in a year or two years from now, they’re going to be better, but we still like the U.S markets best for 2011.” [Will Broad Market ETFs Set New Records in 2011?]
These guys aren’t alone; we even recently predicted that U.S. equities would make a comeback this year. Investors seem to feel similarly, as U.S. equity mutual funds started off the new year with their biggest inflows in more than three years, says The Financial Times.
Here are five ways to get your U.S. equity fix – the first three funds are primarily large-caps, while the last two are small-cap focused and might do better in the early stages of the economic turnaround. To easily find spots that are moving, consider a trend following discipline to help pick them.
- SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA)
- SPDR S&P 500 ETF (NYSEArca: SPY)
- PowerShares QQQ Trust (NASDAQ: QQQQ)
- Schwab U.S. Small-Cap (NYSEArca: SCHA)
- Vanguard Russell 2000 (NYSEArca: VTWO)
For full disclosure, Tom Lydon’s clients own shares of SCHA.
Max Chen 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.