Over 6 Months, REITs, Telecom ETFs Hold Up
Wednesday October 25, 7:00 pm ET
Donald H. Gold
While exchange traded funds are an easy way to buy into some complex markets -- energy, biotechs, a booming foreign economy -- they also offer something more: information.
A look at the top-performing ETFs over the last six months will help reveal the market's hottest sectors.
Be ready for a few surprises.
For instance, despite all the talk of a tumbling property market, real estate investment trusts, or REITs, make up four of the top 10 ETFs.
They are iShares Cohen & Steers Realty Majors (AMEX:ICF - News), Vanguard REIT Index ETF (AMEX:VNQ - News), streetTracks Wilshire REIT (AMEX:RWR - News) and iShares Dow Jones US Real Estate (AMEX:IYR - News).
How did REITs, and REIT ETFs, dodge the housing market's slippage?
Residential and commercial property markets are two separate animals, experts say. And while the residential market has faltered, commercial values have held up, vacancies are low and tenants are paying their rent.
Commercial Property
These four successful ETFs all held shares of some very successful commercial REITs, including Simon Property Group (NYSE:SPG - News), Equity Office Properties Trust (NYSE:EOP - News), Vornado Realty Trust (NYSE:VNO - News) and General Growth Properties (NYSE:GGP - News).
Three names in the top 10 come from the telecom industry, including the No. 1 six-month winner, Telecom Holdrs (AMEX:TTH - News), with a 20.1% gain for the period. Telecom Holdrs is a big-cap value fund. More than half the fund's assets are in two stocks: AT&T (NYSE:T - News) and Verizon Communications (NYSE:VZ - News).
AT&T is a member of the IBD Big Cap 20. But Verizon is not a CAN SLIM candidate. Its earnings have declined in eight of the last 12 quarters. Still, the stock has been rising modestly the last few months.
Ma Bell
Two other telecom ETFs popped up on the list: iShares S&P Global Telecommunications (AMEX:IXP - News) and Vanguard Telecom Services ETF (AMEX:VOX - News).
All three are big holders of AT&T, although iShares S&P Global devotes only 11% of its assets to it, and Vanguard Telecom 17%.
IShares S&P Global Telecom may be a riskier play since foreign telecom shares swing more widely than their U.S. counterparts.
Vodafone (NYSE:VOD - News), the U.K.-based megacap stock, accounts for 10% of this ETF's assets.
It may be less volatile than some. But it's been trending lower for about a year.
Here's another surprise: iShares MSCI Mexico Index gained 18.5% in the last six months.
That's a real comeback after its 33% plunge from March through July, which includes almost all of this measuring period.
From that July 23 bottom, this fund soared 54%. Thank the recent elections, where conservative Felipe Calderon defeated leftist Andres Manuel Lopez Obrador.
AI
