5 ETFs to Buy for Growth in 2012

Look toward these sector ETFs to guide you through the year

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In my last couple of articles, I discussed the growth of the ETF industry and how to determine what types of ETFs are smart investments.

Now, it’s time to figure out which ETFs look promising for your 2012 investment dollars. But first, let’s take a look back at the ETF marketplace in 2011.

According to Morningstar.com, here were the 10 worst-performing ETFs for the past year:

ETF Ticker 1-year return (%)
ProShares UltraShort Silver ZSL -66.31%
Direxion Daily India Bull 3x Shares INDL -64.22%
PowerShares DB 3x Short
25+ Year Treasury Bond ETN
SBND -63.78%
Market Vectors Solar Energy KWT -63.46%
iPath Global Carbon GRN -62.47%
C-Tracks Citi Volatility Index CVOL -62.32%
Direxion Daily China Bull 3x YINN -62.25%
Guggenheim Solar TAN -61.87%
Direxion Daily Emerging Markets
Bull 3x
EDC -61.30%
Global X Uranium URA -57.27%

As you can see, alternative energy and emerging markets didn’t fare too well last year.

And here are the top 10 performers:

ETF Ticker 1-year return (%)
PowerShares DB 3x Long
25+ Year Treasury Bond ETN
LBND 102.71%
Direxion Daily 20+ Year Treasury Bull 3X TMF 96.95%
ProShares Ultra 20+ Year Treasury ETF UBT 65.71%
Direxion Daily India Bear 3X INDZ 58.98%
PIMCO 25+ Year Zero Coupon
U.S. Treasury Index Fund
ZROZ 58.74%
Vanguard Extended Duration EDV 53.89%
Direxion Daily 7-10 Year Treasury Bull 3X TYD 44.49%
iPath U.S. Treasury 10-Year Bull DTYL 42.25%
iPath Treasury Long Bond DLBL 42.06%
PowerShares Base Metals Double Short BOM 39.34%

Huge bets on leveraged debt and Treasuries were the golden ETFs of 2011. But as I said in my last article, leveraged ETFs are very risky and should be purchased only by experienced, sophisticated investors who well understand their risks.

However, it’s clear that in a year when most stock market sectors saw negative, or tepid returns, fixed income was the winner. Yet a couple equity sectors outperformed, as shown by the next chart, and represented by various iShares ETFs:

Sector Symbol 1-year return (%)
Health Care IXJ 8.2%
Consumer Staples KXI 7.3%
Energy IXC -0.3%
Technology IXN -3.7%
Telecommunications IXP -4.8%
Consumer Discretionary RXI -5.3%
Utilities JXI -8.0%
Industrial EXI -8.9%
Basic Materials MXI -18.4%
Financial Services IXG -21.4%
Source: SeekingAlpha

Both health care and consumer staples managed to eke out decent returns last year, but it certainly was not a banner year for equities or equity ETFs!

So let’s look ahead and see what 2012 might have in store for us.


Article printed from InvestorPlace Media, http://investorplace.com/2012/01/5-etfs-to-buy-for-2012/.

©2014 InvestorPlace Media, LLC

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