Holiday ETF Portfolio: XRT, KOL, FAA, CUT, COW
Tumultuous trading and clouds of uncertainty on all fronts were dominant themes this year. However, despite all of the pessimism surrounding the global recovery, U.S. markets appear poised to settle comfortable in green territory as 2012 draws to a close. The Santa Claus rally hit Wall Street a bit early this year, as optimism surrounding “fiscal cliff” negotiations bolstered markets higher from the middle of November only to encounter fear-induced selling pressures ahead of the holidays [Download How To Pick The Right ETF Every Time].
Despite the mixed outlook, we can’t help but get into the holiday spirit, so we’re highlighting five ETFs that fit the festive theme [see our 13 Rapid Fire ETF Ideas For 2013].
SPDR S&P Retail ETF (XRT, A-)
Shopping for presents around the holidays is a joyful activity for some, but pure torture for those who can hardly handle bustling malls and crowds of people. As the second most popular fund in the Consumer Discretionary Equities ETFdb Category, XRT deserves a spot in every holiday portfolio. This ETF has racked up gains of 20% on the year, showcasing the health of the U.S. consumer and offering hope to the sluggish recovery [see Consumer Centric ETFdb Portfolio].
Market Vectors Coal ETF (KOL, B-)
We all know at least one person that deserves a lump of coal in their stocking, but the holiday spirit has a way of swaying us towards kindness instead of brutal honesty. Aside from oil and gas ETFs in the Energy Equities ETFdb Category, KOL is the next most popular fund in the space having accumulated over $238 million in assets under management since launching at the start of 2008. This year has proven to be quite painful for KOL, shedding 20% on the year, as growing excitement about the prospects of our domestic natural gas industry have scared off many investors from this corner of the energy market [see 101 High Yield ETFs For Every Dividend Investor].
Airline ETF (FAA, B+)
Traveling around the holidays is a hassle on its own; add nasty weather to the mix and you’ve got yourself in an unimaginably stressful situation. As the only ETF focused on airlines, FAA has carved out a nice niche for itself, managing to accumulate $17 million in assets under management. This fund has gained over 30% on the year and holds well-known companies like Southwest Airlines (LUV), Delta (DAL) and United (UAL).
Timber ETF (CUT, B+)
Despite its sour performance in the first half of 2012, the cleverly titled CUT ETF will look to end the year with a 25% gain as improving housing market data has resonated well among timber companies. From a geographic perspective, this ETF is split 60/40 between international and U.S. stocks; top holdings include West Fraser Timber (WFTBF), Weyerhaeuser Co (WY) and Plum Creek Timber Co Inc (PCL) [try our Free ETF Stock Exposure Tool].
DJ-UBS Livestock Total Return Sub-Index ETN (COW, A-)
No festivities would be complete without a feast, which is why we’ve included COW in our holiday portfolio. This futures-based ETN is comprised of contracts on lean hogs and live cattle, serving as a viable instrument for rounding out exposure to the often overlooked livestock family of commodities. Mixed economic growth expectations in 2012 served as headwinds for livestock prices, and COW appears poised to end on a fairly flat note.
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Disclosure: No positions at time of writing.
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