April 17 is usually just another day, but this year, it has
the distinction of replacing April 15 as Tax Day in the U.S. Most
folks don't like paying taxes, but some such as Warren Buffett,
have been kind enough to volunteer to pay more.
Eschewing a laborious debate on U.S. tax code and policy,
let's just run with the simple facts. As the
Wall Street Journal
reported, in 2011 the IRS refunded $300 billion, or 25 cents for
every $1 it collected. That means 80% of the 143 million returns
filed earned a refund, the Journal reported.
The average refund is around $3,000. That's not Buffett money,
but it's still a decent chunk of change. So before you go
spending most of that refund on the new iPad or cargo shorts from
Abercrombie & Fitch (NYSE:
ANF
), consider some ETF portfolio building with the following
funds.
WisdomTree Emerging Markets Equity Income Fund (NYSE:
DEM
)
Somewhat quietly, the WisdomTree Emerging Markets Equity Income
Fund continues to rake in assets under management. At the end of
February, we noted the fund eclipsed the
$3 billion AUM mark
. Today, DEM has nearly $3.7 billion in AUM.
The fund offers exposure to 18 countries, but Taiwan, Brazil
and South Africa combine for 53% of the country weight. DEM
features a 30-day SEC yield of almost 6.8%. That's better than
triple what the iShares MSCI Emerging Markets Index Fund (NYSE:
EEM
) offers. Plus, DEM's expenes ratio of 0.63% is better than EEM's
0.67%/ and DEM has sharply outperformed the iShares fund over the
past five years.
WisdomTree Emerging Markets Corporate Bond Fund (Nasdaq:
EMCB
)
Why not use some of that tax refund to kill multiple birds with
one ETF stone. The still new EMCB, the first emerging markets
corporate debt bond fund to come market, helps investors fill
bond, emerging markets and yield voids in their portfolios.
EMCB features a 30-day SEC yield of 4.7% and most its holdings
rate as investment grade as 48.3% of the fund's issues are rated
BBB and another 19.9% are rated A. Brazilian, Russian and Mexican
bonds combine for about 55% of EMCB's weight. The fund has proven
so popular that iShares has
decided to copy the idea
.
SPDR S&P Retail ETF (NYSE:
XRT
)
Instead of squandering your refund at some of XRT's 96
constituents, use your refund and bullish consumer data to your
advantage by considering a stake in XRT. At the start of trading
today, XRT had slid more than 2% in the past month, but has
erased almost all of those losses and there's still plenty of
time to go in Tuesday's session. If U.S. economic data remains
supportive, XRT could challenge the $64-$65 area later this
year.
Market Vectors Oil Services ETF (NYSE:
OIH
)
For those that already have their tax refunds, OIH might be worth
a look now ahead of some
critical earnings reports this week
. OIH doesn't have the best looking chart out there and the ETF
has slid 9.5% in the past month, but Wednesday's earnings update
from Halliburton (NYSE:
HAL
) and Friday's report from Schluberger (NYSE:
SLB
) will impact OIH one way or the other. Those two stocks account
for over 29% of OIH's weight.
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