These days, it's hard to fathom investing for the long-term,
unless the conversation involves Warren Buffett. Buffett, the
legendary value investor and chairman CEO of Berkshire Hathaway
(NYSE: BRK-A, BRK-B) has made a fortune taking a long-term view
of his company's investments, whether they be acquired businesses
or equity stakes.
Even with the obvious lessons investors can learn from the
Oracle of Omaha, these days most investors want to be traders as
well. That's not surprising when phrases such as "high-frequency
trading" and "buy-and-hold is dead" are oft-repeated
Of course there is also the misnomer that all ETFs are
volatile instruments only worthy of use over short-term time
frames. Contrary to that misinformation, there are myriad ETF
options for investors looking to play long-term ideas. Here are
some to consider.
First Trust ISE-Revere Natural Gas Index Fund (NYSE:
Did you notice that as natural gas prices have started to rebound
the First Trust ISE-Revere Natural Gas Index Fund went on a
seven-day winning streak? Getting in the business of calling a
bottom in natural gas has proven foolhardy, but if the
commodity does experience a renaissance, FCG is
one ETF that will benefit
FCG's long-term prospects are bright for multiple reasons.
First, many Americans are realizing the benefits of moving toward
natural gas for power generation and as a transportation fuel.
Second, many of FCG's holdings are oily plays, so the ETF is
somewhat levered to rising oil prices. Third, this ETF is
littered with potential takeover targets.
EGShares Emerging Markets Consumer ETF (NYSE:
The emerging markets consumer is
is certainly an investable theme, but it has to
be executed the right way
. That means gaining exposure to local brands and ECON, one of
the original and dominant EM consumer ETFs, does that.
The knock on ECON, particularly as a long-term play, is the
0.85% expense ratio. On the other hand, ECON is up 22% since its
late 2010 debut. The fund is also heavier on staples names over
discretionary stocks, indicating it has a more conservative
posture than meets the eye.
WisdomTree Emerging Markets Equity Income Fund (NYSE:
The WisdomTree Emerging Markets Equity Income Fund proves one
point long-term investors should be aware of: Dividends matter.
DEM can be viewed as the dividend-paying answer to the Vanguard
MSCI Emerging Markets ETF (NYSE:
) and the iShares MSCI Emerging Markets Index Fund (NYSE:
VWO and EEM are the two largest EM ETFs and two of the largest
U.S. ETFs overall. Both are down significantly over the past five
years, but DEM is up by almost 10%. Someone must be paying
had $3 billion in AUM in late February
. Today, that number is over $3.8 billion.
WisdomTree Emerging Markets Corporate Bond Fund (Nasdaq:
The WisdomTree Emerging Markets Corporate Bond Fund has proven to
be one of the better new ETF ideas of 2012 and the fund will
always be able to say it was the first to be devoted exclusively
to EM corporate bonds. Better yet, EMCB will probably always
offer better yields than U.S. Treasuries.
Approximately three-quarters of the fund's holdings are
investment-grade and about 14% of EMCB's country weight goes to
Hong Kong (not an emerging market) and South Korea (only an
emerging market in the eyes of one particular index
Bottom line: There are multiple reasons why
emerging markets bonds are more attractive than
their developed markets counterparts and EMCB is poised to
benefit over time from those reasons
For more ETFs for patient investors, please click
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