NEW YORK (
) -- Wall Street survivors like
JP Morgan Chase
have survived the crush of recession and are profiting on the upside.
ETFs like the
iShares Dow Jones U.S. Broker-Dealers Index Fund
RevenueShares Financials Sector ETF
, heavily weighted towards these companies, should continue to prosper.
Like it or not, Goldman Sachs survived the downturn. Individual investors may not be able to control bonuses, but they can continue to benefit from the rise in Goldman's stock.
ETF for Wall Street Survivors
On the brokerage side, highlighted by
iShares' Broker Dealer ETF
, firms like GS and
will benefit in the wake of fallen comrades like Lehman and Bear Stearns.
Less competition means a greater piece of the pie, and these firms continue to be at the forefront of trading technology. In addition to GS and MS, IAI's top five components include the
IAI tracks the Dow Jones U.S. Select Investment Services Index, a narrowly-themed group that includes brokers and dealers and commodity and stock exchanges. While this bunch was hit hard by the economic downturn, IAI has risen nearly 45% year to date.
of Schwab's proprietary ETFs gives investors a unique view of what some of these firms will be up to in the future. By offering asset management clients a "one-stop shop" for trading needs, SCHW will help to cultivate a client base that stays in-house for transactions. These recurring fees will help firms like SCHW to continue growing.
If you are looking for a broader angle on the financial sector, funds like
iShares Dow Jones US Financial Services
and RevenueShares Financials Sector. While IYG is, by far, the larger and more liquid fund, it has a lower exposure to Goldman Sachs.
RWW, which is still relatively new, uses a revenue-weighted strategy rather than the more common capitalization-weighted approach. When it comes to financials, this strategy gives investors access to the give financial behemoths at the top of this fund: Goldman Sachs, Morgan Stanley, JP Morgan,
Bank of America
. Since the RevenueShares offering has yet to gain steam, and investor interest, it may be a fund best watched from the sidelines for average investors. The revenue-weighted strategy, however, is certainly one to keep an eye on. In the meantime, investors can gain access to firms like Goldman through IAI.
-- Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion did not have any positions in the equities mentioned.
Don Dion is president and founder of
, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.
Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.