ETF Investors Can Take Hints from Millionaires

ETFtrends.com
May 6, 2014

Investors can take cues from American millionaires, as many wealthy participants expect to put more money into the stock market.

In a recent CNBC Millionaire’s survey of 514 individuals with over $1 million in assets, millionaires plan to put 46% of their investment wealth into equities, followed by 21% into fixed-income and 14% into short-term cash instruments, reports Robert Frank for CNBC.

America’s wealthy can have a large influence on the markets, with the top 10% of Americans holding over 80% of stocks.

Investors can access broad stock market indices through ETFs. For instance, the SPDR Dow Jones Industrial Average ETF (DIA) provides exposure to Dow bluechips, SPDR S&P 500 (SPY) reflects the S&P 500 index and PowerShares QQQ (QQQ) tracks the Nasdaq-100. [Broad Market ETF Ideas for Dealing With May’s Doldrums]

Looking into the equities markets, 22% of surveyed millionaires with $5 million in assets or more are bullish on tech names.

ETF investors can access broad technology sectors through the Technology Select Sector SPDR (XLK) , the largest U.S. technology ETF. XLK has a 0.16% expense ratio. Additionally, other options include the Vanguard Information Technology (VGT) , which has a 0.14% expense ratio, and iShares U.S. Technology ETF (IYW) , which has a 0.46% expense ratio. [Stick With High Quality Over Momo ETFs]

Moreover, millionaires with less than $5 million in assets are more bullish on health care names, with 15% of those surveyed pointing to this sector as their top pick.

For health care sector exposure, ETF investors can take a look at sector plays like the Health Care Select Sector SPDR (XL.V) , which has a 0.16% expense ratio; iShares U.S. Healthcare ETF (IYH) , which has a 0.46% expense ratio; and Vanguard Health Care ETF (VHT) , which has a 0.14% expense ratio. [Identifying Key Differences Among Sector ETFs]

While millionaires are more bullish on stocks, the group remain cautious on the overall economy. Of the survey respondents, 43% expect the economy to end flat this year, 42% believe it will expand and 12% anticipate a contraction.

For more information on market sectors, visit our sector ETFs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.