Furthermore, economic growth will also strengthen REITS and MLPs. REITs will benefit from rising demand for housing and office space as the economy expands. Meanwhile, MLPs can also grow as the U.S. builds up its energy infrastructure to accommodate the new shale oil boom. [Shale Oil Boom Will Bolster MLP, Energy Infrastructure ETFs]
Investors can consider at commodities to diversify their stock and bond positions. The PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), which tracks 14 of the most heavily traded commodities, is up 0.3% over the last month and up 2.8% year-to-date. The PowerShares DB Agriculture Fund (NYSEArca: DBA), which only tracks agricultural commodities, provides a more focused exposure to the space. DBA is up 1.3% over the last month and increased 18.5% year-to-date. [A Commodity ETF to Diversify Your Investment Portfolio]
“Commodities are a strong portfolio diversifier in most market environments because they are only loosely correlated with equities and fixed-income assets,” according to Morningstar analyst Abby Woodham. “From 1970 to 2004, commodities were negatively correlated with other asset classes like global equities and domestic bonds.”
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Max Chen contributed to this article.