ETF Expert

Do some ETFs have destiny on their side? Consider the iShares Networking Fund (IGN). In spite of ominous macroeconomic clouds, IGN has surged 42.4% in 5 weeks.

The overall market? The S&P 500 SPDR Trust (SPY) picked up an astonishing 27% over the same time frame… but it's still well short of Networking's remarkable pop.

Last October, I released a report on Obama-friendly ETFs. My top personal pick was the iShares Networking Fund (IGN). The reasoning? Tech infrastructure spending coupled with attractive valuations would propel the one-time laggard much higher.

Some may wonder if it's "too late" to ride the Cisco Express. Maybe the Sun won't shine this quarter. Or perhaps Google will say something negative about the state of online advertising.

The truth is… yes. You can probably get a more attractive entry point. That's a prediction, of course. In essence, I would expect that the 5-week bear rally might hit some hefty headwinds here in earnings season.

However, the basic premise is still quite sound; that is, the iShares Networking Fund (IGN) will benefit from the hundreds of billions being spent to increase broadband access for schools, healthcare professionals, libraries and hospitals. Moreover, President Obama strongly believes that America's success is tied to our country's leading internet players. And that translates into the helping hand of government in an era of seriously checked capitalism.

Are there other sleepers out there? I can't say that Retail (XRT) is a sleeper, as I've covered XRT extensively. Yet the health of the global consumer doesn't appear to be as impacted by the worldwide crisis of confidence as one may have been led to think.

Take a look at the Global Consumer Discretionary Fund (RXI). If discretionary spending has been slashed throughout the developed world, one might expect to see the harshest effects of economic malaise here. Yet RXI is performing on par with the S&P 500 SPDR Trust (SPY) and outperofrming the MSCI EAFE Index Fund (EFA) since the bear effectively began on 10/9/2007.

But that's not all. If you want to talk about 3-month momentum, the Global Consumer Discretionary Fund(RXI) is outperforming Global Energy (IXC), Global Healthcare (IXJ), Global Industrials (EXI) and Global Utilities (JXI). Who could have seen that coming!

One last sub-sector that's caught fire… coal. 

When the commodity bubble burst in the summer of 2008, few were as badly injured as companies engage in the coal industry. The Market Vectors Coal Fund (KOL) might as well have been left for dead, losing more than 70% of value in a matter of months.

Now, however, might be the time for a speculator to take another gander. With a price-to-earnings ratio of 6, and a bit more "uhmmmmph"than energy at large, KOL may be one way to play a rise in global activity as well as inflation. Just bring your stop-loss protection!

If you'd like to learn more about ETF investing… then tune into "In the Money With Gary Gordon." You can listen to the show "live" or via podcast or on your iPod at this link.

Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Advisor with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.