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5 ETFs With Strong Bullish Trends: Ned Davis

By: Investor's Business Daily
Posted: 11/27/2012 5:50:00 PM
Referenced Stocks: AUD;BBH;EMB;SPY;XBI

The best ETF investments at the moment are biotechs and international bonds, according to the Ned Davis Research Group of Venice, Fla.

In an "ETF Highlights" report sent Tuesday, Ned Davis ETF strategist Neil Leeson writes that these groups sport the most bullish trends according to the firm's "tape indicators."

"Biotech funds have been the real leaders in the sector this year," Leeson wrote. "Nearly all of them are oversold, and the recent pullback did nothing to remedy the situation. The trend model forMarket Vectors Biotech ETF ( BBH ) is at a new high on the year."

BBH carries an IBD Relative Strength Rating of 89 and a C+ Accumulation-Distribution Rating on an A to E scale. A is best. That means BBH's price action has outpaced 89% of the market in the past 12 months and that institutions are buying slightly more shares than selling.

BBH is trading above its 50-day and 200-day moving averages, which confirms a strong uptrend. It's rallied an eye-popping 48.72% year to date vs. 14.07% for SPDR S&P 500 ( SPY ).

David Fry has evaluated the top five biotech ETFs for , ranking BBH third andSPDR Biotechnology Select ETF ( XBI ) best. XBI carries a 78 RS Rating and D+ Acc/Dis Rating.

For international bond plays, Ned Davis' Leeson recommendsPimco Australia Bond Index ETF ( AUD ),iShares JPMorgan USD Emerging Markets Bond ( EMB ) andWisdomTree Dreyfus Emerging Currency (CEW).

AUD holds Australian-dollar denominated, investment-grade government and corporate bonds. AUD returned 9.47% year to date vs. 4.2% for the benchmark Barclays U.S. Aggregate Bond index. It currently yields 3.05%.

EMB and CEW have benefited from U.S. dollar weakness. EMB yields 3.34%. It's returned a handsome 15.12% year to date.

CEW gained 5.28% year to date. It shows no yield.

Follow Trang Ho on Twitter @TrangHoETFs .