ETFs Expected To Do Well In The Summer Months

| April 11, 2014 | 0 Comments

summerSpring is in full swing here in Arizona.  Temperatures are soaring into the 90s this week and the air conditioning is already working overtime at my house.

That can only mean one thing… my electricity bill is about to go through the roof. 

And I’m not the only one; electricity demand for cooling purposes is a big expense for consumers in the summer months.  What’s more, the price of gasoline goes up in the summer as demand from the summer driving season increases. 

It leads to one thing.  We typically see more money spent on energy during the summer months.  And that can lead to some nice gains for ETFs that track oil & gas, alternative energy, or electricity stocks.

Let’s take a look a three top performing ETFs that I expect to do well this summer.

Market Vectors Unconventional Oil & Gas (FRAK)

FRAK is a top performing ETF in the Energy sector with a current price of $30.45. It has a current YTD return of 6.04% but a 20.20% 1-year return. The bulk of those gains came over the summer when the price went up over 5 points.

The Market Vectors Unconventional Oil & Gas tracks the overall performance of companies involved in the exploration, development, extraction, production, and refining of unconventional oil and natural gas.

FRAK currently holds 61 stocks and has an expense ratio of .54%. It has a dividend yield of .47%.

This ETF contains a majority of U.S. energy stocks with companies such as Occidental Petroleum (OXY), Hess Corp (HES), and Anadarko Petroleum Corporation (APC). 

S&P Global Water Index ETF (CGW)

CGW is another ETF that typically does well during the summer. With a current price of $28.83, it has a YTD return of 4.27% and an overall 1-year rate of return of 21.23%.

The S&P Global Water Index is made up of about 50 stocks that are chosen based on the relative importance to the global water industry.   It includes various water utility companies and water systems and infrastructure companies are included in this index.

CGW holds 50 stocks and has an expense ratio of .65%. It has a dividend yield of 1.45%.

The majority of CGW’s holdings are in international stocks in the Industrials and Utilities markets. Its top holdings include Pentair Ltd (PNR), United Utilities Group PLC (UUGWF), and American Water Works Co Inc (AWK).

Market Vectors Global Alternative Energy ETF (GEX)

GEX is another top performing ETF that is expected to do well during the hot summer months. It has a current price of $59.65%. It has a year to date return of 6.69% and an amazing 55.94% 1-year return!

This ETF provides exposure to publicly traded companies worldwide that are principally engaged in the alternative energy industry.

It currently holds 36 stocks and has an expense ratio of .62%. It has a dividend yield of .90%.

GEX has about half of its holdings in the US market and the other half in foreign investments. It has 40% of its holdings in the technology sector, 20% in the utilities sector, and the rest is comprised of energy and the consumer cyclical sector.

This ETF invests in companies in the alternative energy market. These companies include Tesla Motors (TSLA), First Solar Inc (FSLR), and Vestas Wind Systems (VWS).

Here’s the lowdown…

Buying these ETFs early in the spring will give you the most gains when these ETFs heat up over the summer.

Good Investing,

Corey Williams

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Category: ETFs, Sector ETFs

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets three times a week. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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