Making Money Alert: The Top 10 ETFs in 2014

A third of the year is already in the books, and 2014 has been a year of surprises so far.

I mean, who would have predicted that long-term Treasury bonds would be so strong this year, with the value of the iShares 20+ Year Treasury Bond ETF (TLT) up more than 11% year to date?

Another big surprise this year is the gains, particularly last month, in both energy and emerging markets. The table below shows the best-performing (non-leveraged) exchange-traded funds (ETFs) in April.

As you can see, emerging market standout Turkey topped the list of ETF performers, but the rest of the best (save for Peru) were all in the energy space. To be certain, there’s been a pronounced move higher in the energy space, and that’s a trend all investors should be watching closely.

As for the top-performing ETFs year-to-date, we’ve also seen a rotation toward emerging markets, energy and commodities. The table below shows the best of the best through the first four months of the year.

I doubt that very many market mavens thought that Egypt would be the best-performing sector in the market through the first third of the year, but that’s what’s happened. I also doubt that many had selected gold mining stocks as potential big winners.

The results here show that the most unloved sectors of years past often are the ones ripe and ready for new money flows and for outstanding performance. The key for you as an investor is to identify these trends, and then allocate accordingly.

Introducing the New Successful ETF Investing

After nearly four decades of helping investors make money, we know that delivering the best possible investment advice requires us to keep evolving and adjusting to the tools that the market provides. This is a philosophy that my father, Dick Fabian, held when he first started the flagship Fabian publication, and this is a philosophy that still operates at the core of our business.

Our belief is that ETFs will continue to dominate the investment landscape, and that means they also should be the primary vehicles in your investment portfolio. With that concept at the forefront, I am proud to introduce the new Successful ETF Investing.

Our newly redesigned, revamped and renamed publication will have an enhanced focus on ETFs. That focus includes new sections, new features and new portfolios to help both conservative and aggressive investors make more money.

We are very proud of our tuned-up version of Successful ETF Investing and we know you’re going to love it. Check out Successful ETF Investing right now, and see what you’re missing.

ETF Talk: Market Vectors Offers Gold and Global Trading to Investors

Van Eck Global, the parent company of Van Eck Market Vectors, has a long tradition in international investing and has grown its exchange-traded fund (ETF) offerings to 50 funds, with roughly 40% focused on international investments. Its international ETFs go beyond the usual ones featuring Brazil, Russia, India and China (BRIC), as well as European Union countries, and include some smaller developed and developing markets, such as Israel, Poland, Indonesia and Colombia.

The firm became a trendsetter in 1955 when it offered one of the first international mutual funds and followed suit in 1987 by launching one of the first global bond funds. In addition, the firm has a long history in the hard asset classes, particularly gold. Market Vectors created the first U.S. gold-mining shares mutual fund in 1968, rode the gold boom of the 1970s and created the first gold-mining shares ETF in 2006, Gold Miners ETF (GDX).

GDX is presented as a hard-asset hedge against the volatility of financial markets. It provides exposure to a global market of publicly traded gold mining companies. (If you believe in the small-cap advantage, you may be more interested in the Junior Gold Miners ETF (GDXJ), which focuses on small- and medium-capitalization firms in gold or silver mining.) So far this year, GDX has gained 14.91%, even after a pullback from highs in March and April that leave it below its 50-day moving average. It issues dividends annually, and its current yield is 0.79%.

Van Eck Market Vectors’ array of hard-asset and internationally focused ETFs makes it a potential source of diversity in your portfolio. Diversity is important in times like now, when the U.S. stock market is just treading water on the average investment.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

ETF Snapshot: Strategies for Wealthy Investors

Next week is the annual Las Vegas MoneyShow, and one of the workshops I’ll be teaching this year is specifically aimed at the needs of high-net-worth investors. In my opinion, the three best strategies for wealth investors involve growth funds, total return funds and tax-efficient/tax-free funds. Let’s take a quick look at each.

Growth Oriented:
Investors using this strategy are focused on capital appreciation during the next 1-3 Years. Income generation is not a priority, and some market volatility is acceptable. Investors should be aware of the potential for drawdowns and have the staying power to withstand short-term price fluctuations.

Total Return Oriented:
This strategy is focused on income generation, while also participating in capital appreciation opportunities. Volatility and drawdowns will generally be manageable; however, capital appreciation may not be as robust. The tradeoff here is the strong income and high yields inherent in these funds.

Tax-Free Income Oriented:
This strategy best suits investors with high federal and/or state tax burdens. These tax-efficient vehicles generate tax-free income on a state or federal level, depending on the security. Risks include interest rate volatility and municipality defaults.

To see which funds made my top 10 list of favorite ETFs for wealthy investors, just check out the ETF Snapshot today!

NOTE: Fabian Wealth Strategies is a Securities and Exchange Commission-registered investment adviser, and is not affiliated with Eagle Financial Publications.

What Power Attracts

“It is said that power corrupts, but actually it’s more true that power attracts the corruptible. The sane are usually attracted by other things than power.”

–David Brin

The great science fiction novelist is known for producing some great reads (“The Postman,” “The Uplift War,” “Infinity’s Shore”), but here he warns us about a problem that’s anything but fiction. You see, the nature of power (and specifically political power) tends to attract a certain type of corruptible person. Just beware of that view the next time you assess a proposed government policy, or the next time you put your faith in any politician.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Making Money Alert readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

In case you missed it, I encourage you to read my Making Money Alert article posted on last week on Eagle Daily Investor about how the slow-growing market reacted to the Fed’s latest monetary-policy decision. I also invite you to comment in the space provided below my column at Eagle Daily Investor.

All the best,

Doug Fabian