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 - Get Report). 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 - Get Report), 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 - Get Report). "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."
Another pick that Welch says will do well in the long run is the iShares MSCI Emerging Markets Index ( EEM - Get Report). "It's very diversified for an emerging market fund," he says. "It is volatile, but it hasn't done much worse than the S&P 500." Golden opportunity: The uncertainty that was ever-present in the market in 2008 could very well have a hangover effect in 2009. This doubt could make gold a good bet going forward. Tom Lydon, president and portfolio manager for Global Trends Investments, says the Market Vectors Gold Miners ETF ( GDX - Get Report) is the best way to play this theme. "Gold should continue to gain momentum as investors look for safe havens in challenging markets even with a weaker U.S. dollar," he says. "Production costs for gold miners have also been declining, leading to wider profit margins for gold mining companies." Another theme that Lydon likes for 2009 is the potential for a strong infrastructure build-out brought about by a new administration. Lydon sees the iShares S&P Global Infrastructure Index ( IGF - Get Report) as being an efficient way to invest in infrastructure. "Don't let 'global' fool you -- 26% of this fund is in the U.S., the largest country weighting in the fund," he says. "Proposed improvement projects cannot be outsourced, so they'll directly benefit the U.S. economy and employ many of the people who have lost their jobs in recent months." Treasury bubble? David Vomund, president and founder of Vomund Investment Management, isn't so sure that the recent rush into Treasuries, which has pushed ETFs such as the iShares Lehman 20+ Year Treasury Bond Fund ( TLT - Get Report) higher, is sustainable over the long haul. Vomund likes the UltraShort Lehman 20+ Year Treasury Fund ( TBT). "With yields so low, I can't imagine what those who are buying T-bonds are thinking," he says. "T-bond prices are parabolic now, but when this bubble bursts, as it surely will, momentum players will exit and prices will plummet just as fast as they rose."
Vomund's other pick for 2009 is the iShares S&P U.S. Preferred Stock Index ( PFF), which includes preferred shares of Wells Fargo ( WF), Citigroup ( C) and JPMorgan ( JPM) among its holdings. "The best way to profit from stabilization in our financial system is to own preferred stocks tied to banks," he says. "About 85% of this ETF's holdings are financial companies, and the 11% yield makes it especially attractive."