The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (ETF Expert ) -- Window-dressing money managers need to show that they are "long" the energy sector in their quarterly reports. Not surprisingly, there are scores of energy services ETFs and energy exploration ETFs on the "new highs" list. You'll find:
1. Oil Services HOLDRs (OIH)
2. iShares DJ Oil Equipment & Services (IEZ)
3. PowerShares Dynamic Oil Services (PXJ)
4. SPDR S&P Oil &Gas Equip/Services (XES)
5. iShares DJ Energy (IYE)
6. SPDR S&P Select Energy (XLE)
7. Vanguard Energy (VDE)
even...8. Global X China Energy (CHIE) and... 9. PowerShares S&P Small Cap Energy (PSCE) In contrast, there are asset managers who have been overweight non-OPEC nations and oil services since Q4, 2010. (See "The Economics of Oil Favor Canada ETFs and Oil Services ETFs.") Of course, the "energy trade" may become overcrowded at some point. Investors need to think about alternative means for generating a combination of capital appreciation and income for their portfolios. Indeed, they should consider using pullbacks to do what money managers have been doing... snapping up shares of equity income ETFs, preferred ETFs and dividend ETFs. Data show that many of these exchange-traded investment types have experienced increased inflow in recent weeks. What's more, outside of the energy world, income-producing ETFs dominate the "new highs" list. In the dividend arena, you'll find: 1. Claymore Guggenheim S&P Global Dividend (LVL)
2. S&P International Dividend (DWX)
3. WisdomTree Global Equity Income (DEW)
4. First Trust Morningstar Dividend (FDL)
5. iShares DJ Dividend (DVY) Last week, I expressed a bit of wonder with respect to interest in S&P International Dividend (DWX) . The fund has significant exposure to developed world financial services companies at a time when Spanish banks are receiving downgrades and default woes are plaguing Portugal sovereign debt. By the same token, investors may be looking to dividend ETFs to lessen portfolio volatility, increase quarterly cash flow and minimize stock uncertainty. Considering the number of these ETFs appearing on the "new highs" list -- FDL, DVY, DEW -- the trend toward modest risk seems clear. After all, most of the broader benchmarks are still 2%-3% away from new highs. And there are those who are willing to journey part of the way up the risk ladder. They'll take on more risk than bonds for a higher income stream, but they'll avoid too much exposure to uncertainty in common stock. Enter preferred ETFs. PowerShares Financials Preferred (PGX), Powershares Preferred (PGF) and iShares S&P Preferred (PFF) all made an appearance on the "new highs" list. Each delivers monthly income at approximately 7% annualized; each has a modicum of potential for incremental capital appreciation.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV