XLU utilities sector is a low volatility and relatively high distribution yields, is useful for establishing low risk equity exposure or for enhancing the current returns generated by the equity side of a portfolio. XLU is probably most appealing to those implementing a sector rotation strategy or looking to establish a tactical tilt towards this low beta sector of the U.S. market. Those building a long-term, buy-and-hold portfolio will likely achieve utilities exposure through broad-based equity funds
noninstitutional
XLRE tracks a market cap-weighted index of REITs and real estate stocks, excluding mortgage REITs, from the S&P 500. XLRE represents the new real estate sector concentrated portfolio of mostly large-caps . XLF provided roughly $3B in AUM in the form of REITs to XLRE in return for its shares, which were then distributed to XLF shareholders, thus providing a massive boost to XLRE’s AUM.
The XLP offers exposure to the consumer staples sector, making it an appealing option for investors looking to implement a sector rotation strategy or tilt exposure towards corners of the U.S. market that may perform well during a downturn. XLP offers impressive liquidity, cost efficiency, and depth of exposure, making it one of the best ETF options for playing
offshore oil rig at sunset
XLE is U.S. energy industry, including many of the world’s largest oil producers. Compared to other energy options, XLE is impressive in terms of both cost efficiency and liquidity; investors can generally expect to execute at penny wide spreads. But like many funds offering exposure to the energy sector, XLE maintains some concentration issues, as a few stocks account for big chunks of the total portfolio.
This ETF gives investors an opportunity to achieve exposure to uranium, an important mineral that currently is inaccessible via futures. For investors looking to bet on increased demand for a raw material used widely in power production, URA is a nice option. URA often trades as a leveraged play on the underlying natural resources, meaning that this fund can experience significant volatility but can be a powerful tool for profiting from a surge in commodity prices.
XLK includes market segments like IT services, wireless telecommunication services, and semiconductors to name just a few. The fund invests in the who’s-who of the U.S. tech sector, with major holdings in companies like Apple and IBM. The fund splits its assets mainly between the technology and communication services sectors, while allocating mainly to giant and large cap firms. One of the major strengths of this ETF is the fact that it does not single out a particular sector; rather it invests in companies from all across the technology sector.
MLPA seeks to replicate USA Oil master limited partnerships (MLP) asset class. MLPs have become very popular in recent years for primarily two reasons: (1) required quarterly distributions provide a steady stream of current income, and (2) because they are partnerships, MLPs avoid corporate income taxes at both the federal and state level as the the tax liability is passed through to the individual partners. By generating at least 90% of income from natural resource-based activities such as transportation and storage, an entity can qualify as an MLP
IWM ETF is one of several offering exposure to the Russell 2000 Index, a widely followed measure of small cap U.S. stocks. Given this investment objective, IWM may be useful in a number of different ways; more active investors may use this fund as a way to establish short-term exposure to a risky asset class when risk tolerance is expected to climb, while IWM can also be appealing as a way of accessing an asset class that should be included in any long-term, buy-and-hold portfolio.
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EEM is one of the most popular ETFs in the world, and is one of the oldest products on the market offering exposure to stock markets of emerging economies. Given this objective, EEM can be used in a number of different ways; this ETF can be equally useful as a short-term trade to increase exposure to risky assets or as a core holding in a long-term, buy-and-hold portfolio. EEM