Exchange traded funds (ETFs) are the latest investment hot spot, but as with everything in the spotlight, there are going to be nay-sayers and haters.
The even the investors who love to hate ETFs know that they are practical, low-cost vehicles to reach all areas of the market, both those that had always been accessible, and those that were otherwise off-limits.
Matt Hougan and Jim Wiandt for MarketWatch set some of you haters straight by giving five ETFs you could use:
- SPDR Gold Shares (GLD): There is no need to buy physical gold, go through needless paperwork, or join a gold pool. This ETF gives good exposure to gold, without the bullion.
- Claymore BNY/Mellon Frontier Markets (FRN): The new frontier looks different than the ones we’re used to, as globalization has made the U.S. frontier ancient history. The latest frontier referred to when talking ETFs includes areas such as Nigeria, Kazakhstan and Colombia.
- Rydex Currency Trust (FXE): This ETF family offers exposure to currencies of the world, with around 30 ETFs/ETNs available to all investors. Not only do you get currency return, there is also the interest rate of the local market.
- Commodities are now a household word, and part of this is the latest explosion but the other part is thanks to ETFs. ETFs offer commodities at half the price that mutual funds can. iPath Dow Jones AIG Commodity Index Total Return ETN (DJP) is one example, with a 0.75% expense ratio.
- Institutional strategies are also becoming everyday lingo among individual investors. The retail market has opened up to “130/30”, “buy/write” strategies, and “hedge fund replication,” with the advent of the ETF. They’re not right for everyone, but watch to see if they’ll work for you.
Read the disclosure, as Tom Lydon is a board member of Rydex funds.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.