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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) -- Last week, I wrote a piece on ETFs with remarkably positive trends in relative strength. Specifically, I highlighted 3 successful investments that rarely garner media coverage, yet deserved a bit more of the limelight. (See "
Three ETFs With Momentum That You Probably Don't Know Exist
I received a great deal of direct feedback on this particular article. Do I own
Market Vectors Gaming(BJK) in my own portfolio? (Answer: Not at the moment.) Is the trading volume on lesser-known ETFs an issue? (Answer: It depends.) Don't I know that Columbia is an emerging market, not a frontier market? (Answer: Get a grip, wannabe. The reclassification happened just last fall.)
As I look at the tape, I consider discussing the ongoing trend toward high-income production. Indeed, REIT ETFs and high-yield bond ETFs have hit fresh 52-week highs (4/24/2012). On the other hand, if writing about the wild and the exotic revs up the reader base, why should I disappoint?
Here, then, are three more ETFs with momentum that you probably haven't heard "word one" about:
Guggenheim Defensive Equity(DEF). Outside of the REIT ETFs and the high-yield bond ETFs, you won't find many exchange-traded investments hitting new 52-week peaks. Guggenheim's DEF is one of the few that can make this claim as well as trumpet its 5-star Morningstar rating. DEF's defensive enough to experience only 2/3 of the beta volatility of the
S&P 500, yet present comparable 5-year performance percentages. Currently, DEF is above short-term (50-day) and long-term (200-day) moving averages.
PowerShares Dynamic Leisure and Entertainment(PEJ). A majority of stock ETFs had fallen below a 50-day moving average in April, giving rise to the notion that a more substantial market correction was inevitable. PEJ, however, barely budged. This exchange-traded vehicle passively tracks an index comprised of discretionary eateries like
McDonald's(MCD) as well as discretionary entertainment corporations like
Walt Disney(DIS) and
Viacom(VIAB). Since PEJ began trading in mid-June of 2005, it has handily outpaced the S&P 500.
First Trust ISE Water(FIW). This global ETF seeks to replicate the performance of the ISE Water Index -- a modified market cap-weighted index comprised of stocks of potable water and waste-water corporations. Surprisingly enough, since its inauspicious inception in mid-2007, it has outperformed the Russell 3000.
FIW has a P/S (price-to-sales) below 1 at just 0.81. And while recent momentum may be fading due to its international exposure, FIW still maintains a relative strength ranking in the 70th percentile of the entire ETF universe.
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