It may seem like all doom and gloom in the markets these days, but surprise, surprise: There are actually some exchange traded funds (ETFs) that have been holding up relatively well in the last few months.
Let’s face it: most stock-based exchange traded funds (ETFs) are strikingly lower than they were one month ago. The Dow, for instance, has dropped below 10,000 for the first time since Feb. 8, giving investors another example of the need for a strong trend following strategy. [How to Follow Trends.]
Gary Gordon for ETF Expert points out five ETFs that remain above their trend lines and are holding up reasonably well amid the market’s recent volatility. That said, though, tread carefully in the coming days and weeks. With volatility like this, they might get dragged down despite themselves.
- Claymore Airline ETF (NYSEArca:FAA): An investment in American, Southwest, Alaska and friends has been kind over the last six months. Memorial Day kicked off the busy summer travel season; will it inject more life into this fund? Time will tell. [Watch These ETFs for Vacation Season.]
- Vanguard Consumer Discretionary (NYSEArca:VCR): Fast food and cheap household items are always well-liked. Recent consumer spending reports have indicated that shoppers are slowly but surely shelling out money for things they want as opposed to need. [Retail ETFs: More Optimism?]
- SPDR S&P Pharmaceuticals (NYSEArca:XPH): Pharma is usually slow and steady, an old trusty. With the recent passage of the health care reform bill, millions more Americans may now get coverage. That means more potential customers for the industry.
- iShares Dow Jones Transportation (NYSEArca: IYT): Billionaire investor Warren Buffett made a big bet on the U.S. rail sector, which is the largest component of this fund. If the U.S. recovery continues as it has been, this ETF could do well.
- iShares Dow Jones U.S. Regional Banks (NYSEArca:IAT): Regional banking could be the surprise of 2010. After all, “big bank” regulation could hit the nation’s largest institutions while the little guys prosper. The financial sector, however, could be touch-and-go for awhile.
For more stories about trend following, visit our trend following category.
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. 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.