Bond ETFs, Dividend ETFs

The New Year is a fresh start for investors and their approach to the stock market. Analysts are predicting that dividends and international debt will be hot exchange traded fund sectors to add to a portfolio.

“While many forecasts for 2013 are tied to the state of the U.S. economy and the likelihood of Congress having resolved the fiscal cliff, S&P Capital IQ believes the ETF industry will continue to gather assets,” S&P Capital wrote in a recent note.

Exchange traded fund assets are currently at $1.3 trillion, which is up 25% from 2011, Matt Hougan for Index Universe reported. U.S. stock ETFs are still raking in assets amid the recent market uncertainty. Talk of the U.S fiscal cliff has worked in favor for the ETF industry, since these funds have tax advantages over mutual funds, reports Bob Pisani for CNBC. According to Index Universe data, mutual funds lost $127 billion in asset outflows, while ETFs gained $54 billion in inflows this year.

Bond ETFs are still expected to be popular investments next year. The actively managed PIMCO Total Return ETF (NYSEArca: BOND) has about $3.83 billion in assets under management and has gained about 12% since inception. For those investors adverse to high fees, the iShares Core Total U.S. Bond Market ETF (NYSEArca: AGG) offers a passive version of BOND, with an expense ratio that has been cut to 0.8% while BOND charges 0.55%, reports Benzinga. [How PIMCO Manages Its Active ETFs]

Market Vectors Emerging Markets Local Currency Bond (NYSEArca: EMLChas surpassed $1 billion in assets under management, and 2013 should be another successful year for this ETF. Various emerging market currencies are looking healthier than developed nation counterparts, due to higher interest rates, lower debt, smaller deficits and pro-active Central Banks, reports Simon Smith for ETF Strategy. [Emerging Market Bond ETF: Higher Yield, Less Debt]