This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

2 ETFs Do Well Without Financial Stocks

Stocks in this article: DTN DOO SPY EFA RY TD SAN BCH

NEW YORK ( TheStreet) -- Mohamed El-Erian has said that Europe is on the verge of a banking crisis. This is hardly a surprise as bad news for European, and UK banks has been playing out for years and has been getting worse for the last few months.

Readers of my articles at TheStreet and of my blog have probably grown weary of my droning on about how bad U.S. and European banks are. Operation twist will not help the U.S. banks as a flatter yield curve makes lending less profitable.

Anyone agreeing that most financial stocks stink can simply avoid those stocks or sector ETFs but not everyone is comfortable with individual stocks or narrow products. A user of broad-based funds using the SPDR S&P 500 Trust (SPY) or the iShares MSCI EAFE Index Fund (EFA) is going to get 13% and 22% respectively in financials. If financials continue to be the exact wrong place to be, then 13% and 22% are too much.

Fortunately for investors there are broad-based substitutes for these funds that exclude financial stocks. The WisdomTree Dividend ex-Financials (DTN) can replace SPY and the WisdomTree International Dividend ex-Financials (DOO) can replace EFA.

The domestic-oriented DTN is obviously dividend weighted. The largest sectors are staples and utilities at 15% each, telecom at 10%, discretionary 9%, industrials and health care 8% each and energy at 7%.

The WisdomTree Website reports a distribution yield of 3.04%. The trailing 12 months have actually been a little better but dividends from ETFs vary over time and the future dividend could be better or worse, there is no way to know. Avoiding financials has allowed DTN to outperform SPY by a noticeable amount over the last 12 months and year to date, 12% versus 6% and flat versus a decline of 6%

DOO allocates 18% to telecom, 11% to utilities, 9% each to industrials and staples, 8% each to health care and energy and 7% each to materials, tech and discretionary. At the country level DOO is heaviest in Australia 17%, France 11% and Japan 10% before getting smaller from there. The telecom sector and Australia are each big dividend payers which accounts for their large exposures in the fund. The trailing dividend yield for DOO is 4.7% but the same caveat about future dividends applies.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs