Exchange Traded Funds are a kind of index funds that essentially trade like stocks. 2013 was a great year in terms of ETF trading as more than 100 (net) new products hit the market. Investing in ETFs can at times be quite challenging, especially in the volatile market conditions. Chapwood Investments, Ed Butowsky, recently visited Fox Business splashing out advice on some of the best ETFs to invest in the current market conditions as well as those to sell and Hold.
Mr. Butowsky went straight into business by giving his consent for buying the Utilities SPDR (ETF) (NYSEARCA:XLU), an ETF that has been experiencing an upswing in the market for quite some time. Mr. Butowsky strongly advises on the purchase of a utility stock rather than a utility mutual fund. Butowsky believes Utilities SPDR (ETF) (NYSEARCA:XLU) is all but set to go higher. He had this to say “I have been buying it for a long time and I will tell you right now this thing is going to continue to go higher.”
Mr. Butowsky considers that Utilities SPDR (ETF) (NYSEARCA:XLU) is going to continue growing as it is not affected by any geopolitical effects or anything that is happening outside the U.S borders. This ETF comes with 3.4% dividend, which makes it even more attractive. The 3.4% yield is quite high considering one gets quite low percentages on interest, for money stored in a bank.
The Utilities ETF has already gained 17% this year alone, although Mr. Butowsky has some reservations about the performance of the market going forward.
“Well, I have some issues with that too, I think we have a better probability of the market going down than going higher.”
Mr. Butowsky also advised on dumping ETFs that track small-cap companies, like the iShares Russell 2000 Growth Index (ETF) (NYSEARCA:IWO), which might turn down in the future. He also suggested staying clear of small growth capitalized companies as soon as interest rates start to go a little higher. Mr. Butowsky also maintains a “Hold” on the real estate-related ETFs, such as iShares Cohen & Steers Realty Maj. (ETF) (NYSEARCA:ICF), because it is doing slightly better, but nobody has a
clear view of what the future holds.