Money Managers' Top ETF Picks for 2009

Most investors are happy to have turned the page on 2008. Now money managers are looking for ways to help them bounce back in the new year. Here are some managers' top ETF picks for 2009 and beyond.

Maximizing utility: Alan Rosenfield, managing director and founder of Harmony Asset Management, is anticipating adversity for the market in 2009. "We like the long term, but are nervous about the shorter term," he says. "I think we might see a lot of sideways action in the months ahead."

One of Rosenfield's top picks for the next 12 to 18 months is the Vanguard Utilities ETF(VPU). This ETF has 84 holdings and a yield of 3.7%. "We think it's cheap, has a good dividend yield and it's defensive," he says.

Although the potential for inflation has taken a backseat to the slumping economy, Rosenfield believes inflation could emerge as a byproduct from a spike in the nation's money supply. "As an investor, you have to be very careful about what you are buying," he says. "Over the long term, you have to be concerned about inflation."

Rosenfield says the PowerShares DB Agriculture Fund(DBA), which now trades 39.8% below its 52-week high achieved in late February, will be a prime beneficiary if inflation quickens.

Bullish on agriculture: Tony Welch, a portfolio manager at Sarasota Capital Strategies who specializes in ETFs, is also bullish on the agriculture front. Welch recently took a long position in the Market Vectors Agribusiness ETF(MOO). "Agribusiness is definitely a long-term trend," he says. "A lot of the stocks in this ETF were beaten down by hedge fund liquidations so there is a lot of value in it now."