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3 ETFs for a volatile market

Publié le 30 septembre 2015

Tom Lydon, editor of ETFtrends.com, stopped by Yahoo Finance to share three funds in those areas that he thinks are worth a look right now.

PowerShares DWA Technology Momentum Portfolio (PTF)

Technology is always a hot area of interest no matter which way the market is moving. When the market bounced back, albeit briefly, after the big stock slide late last month, tech names led the way.

The PTF, however, doesn’t just pack your portfolio with big consumer technology companies. Instead, Lydon says, it focuses on “forward momentum and high growth tech names whose earnings are expected to rise at an above average pace relative to the market.”

That means you won’t find names like Twitter (TWTR) and Alibaba (BABA) in this fund, though you will find a fair amount of Apple (AAPL). The top holdings are: Equinix (EQIX) 6.3%, Apple (AAPL) 5.5%, Amphenol Corp (APH) 5.0%, Skyworks Solutions (SWKS) 4.0%, Facebook (FB) 2.9%, Palo Alto Networks (PANW) 2.7%, Manhattan Associates (MANH) 2.7%, Cerner Corp (CERN) 2.5%, SBA Communications (SBAC) 2.5%, Ultimate Software Group (ULTI) 2.5%

Market Vectors Oil Refiners ETF (CRAK)

Looking for a way to play energy even while the headlines scream at you to run the other way? Lydon says oil refiners are the way to go. Such companies have held their own while the price of crude is sliding.

When refineries can buy crude at lower prices, the “crack spread” - the money made when refiners turn around and sell refined products like gasoline - increases. This ETF captures that money with holdings like: Phillips 66 (PSX) 8.3%, Valero (VLO) 7.9%, Marathon Petroleum (MPC) 7.9%, Reliance Industries (RIGD.L) 6.8%, Tesoro (TSO) 6.6%, HollyFrontier Corp (HFC) 6.3%, Polski Koncern Naftowy Orlen (PKN PW) 5.8%, Jx Holdings (JXHLY) 5.4%, Galp Energia (GALP.LS) 4.2%, Formosa Petrochemical (6505.TW) 4.2%

ProShares High Yield Interest Rate Hedged ETF (HYHG)

The Fed’s coming interest rate hike is a matter of when, not if. According to Fed Chair Janet Yellen that “when” should come before the ball drops in Times Square and 2016 begins.

Regardless, Lydon suggests that the ProShares High Yield Interest Rate Hedged ETF (HYHG) is the way to “diminish interest rate risk.”

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Despite the daunting name of the fund, Lydon says it’s relatively easy to understand. “In a rising rate environment, newer bonds issued with higher yields are more attractive,” he says. “Consequently, older bonds with lower yields are less appealing. If you would still like to generate yields without the fear of rising rates weighing on returns, look to interest rate hedged bond ETFs.”

The HYHG fund is broken down into the following sectors: Industrials-services 38.5%, industrials-manufacturing 25.9%, industrial energy 16.5%, utilities telecom 4.6%, industrial consumer 2.7%, utility 2.2%, utility electric 2.1%, finance 1.5%, banks 1.1%.

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