As volatility continues to rule the markets and exchange traded funds (ETFs), investors are scattering to seemingly safer securities. As we’ve mentioned previously, bond ETFs, "megacaps," health care, consumer-focused ETFs and global industrial ETFs have the potential to offer some relief. In addition to those, here are a couple of other options for the wary investor, according to David Budworth for the Times Online.
- Water ETFs
Similar to our other aforementioned ETFs, water ETFs such as the Claymore S&P Global Water (CGW), generally don’t follow market trends because water is a survival necessity. In addition, water has long-term growth potential because as populations grow, so does the demand for H20. Other water ETFs include PowerShares Global Water Portfolio (PIO), First Trust ISE Water Index Fund (FIW) and PowerShares Water Resources (PHO).
- ETFs with Blue Chip Stocks
"Blue chips" refer to large-cap and "megacap" stocks as well as stocks that pay dividends. An example of an ETF that holds a lot of these stocks is the well-known DIAMONDS Trust, Series 1 (DIA). These ETFs provide relief through their guaranteed dividends as well as their financial sturdiness compared to nondividend ETFs.
For full disclosure, some of Tom Lydon’s clients own DIA.
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.