Today, we look at exchange-traded funds (ETFs) as a way to profit from trends in the economy and markets. We zero in on a pair of ETFs in response to questions from two Members of Pat McKeough’s Inner Circle.The first asks how and when investors can get in on a possible recovery in Greece. The second asks whether a specific ETF is a good way to invest in the technology sector.
Q: Pat: I would assume Greece has terrific investment opportunities. Is it time yet, and do you have any recommendations? Thank you.
A: The Greek situation will remain highly volatile—and the economy and political system have deep structural deficiencies—so we don’t recommend investing in Greek stocks at this point.
However, if you do want to speculate on a Greek recovery, one way to do it is through the Global X FTSE Greece 20 ETF (symbol GREK on New York (Units outstanding: 31.1 million; Market cap: $294.2 million; www.globalxfunds.com).
This fund holds 20 stocks and has a 0.61% MER. The units are down from a high of $24 in early 2014.
Top holdings are Coca-Cola HBC (Hellenic Bottling Company) AG, Hellenic Telecom, National Bank of Greece, Eurobank Ergasias SA, Alpha Bank, OPAP SA, Piraeus Bank SA, Public Power and Jumbo SA.
Inner Circle recommendation: We do not recommend the Global X FTSE Greece 20 ETF. Hold it only if you are willing to speculate on an eventual Greek recovery.
Smart conservative investing at a time of uncertainty
Pat McKeough’s approach to smart conservative investing gives you two big advantages. Your investments are safer when the market is down—and you’re in a stronger position to profit when the markets move up.
Pat’s safety-first philosophy is simple and always effective. It is built on the investments conservative investors need to succeed—established dividend-paying stocks, the most reliable exchange-traded funds (ETFs) and Canada’s best Real Estate Investment Trusts (REITs). You can achieve surprisingly powerful results through income and capital gains. And you never need to take big risks.
The next issue of Canadian Wealth Advisor will be released Friday, August 7.
Apple, Google, Microsoft top the list of holdings for Technology Select Sector ETF
Q: Hi, Pat: I would like your opinion on the Technology Select Sector SPDR Fund. Thank you.
A: Technology Select Sector SPDR Fund ETF (symbol XLK on New York (Units outstanding: 316.2 million; Market cap: $13.3 billion; www.spdrs.com), aims to track the S&P Technology Select Sector Index, which consists of tech stocks in the S&P 500 Index. The fund’s MER is just 0.15%.
The fund’s top 10 holdings are Apple, Google, Microsoft, Verizon, IBM, Cisco Systems, Facebook, AT&T, Visa and Oracle.
The fund is broken down by segment as follows: technology, hardware, storage and peripherals, 21.6%; software, 17.2%; information technology services, 16.5%; Internet software and services, 16.4%; semiconductors and semiconductor equipment, 9.9%; diversified telecommunication services, 9.8%; communications equipment, 6.9%; and electronic equipment, instruments and components, 1.7%.
Inner Circle recommendation: The Technology Select Sector SPDR Fund is okay to hold.
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