A Rush For The Exits Leaves The Door Open For Higher-Yielding ETFs (Podcast)

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 |  Includes: AMJ, EWP, HDV, HILO, HYG, PCEF, PZA, SPLV, YMLP
by: Gary Gordon

Less than two weeks ago, a large number of media writers and analysts were expressing their exuberance for higher stock market highs. Most seemed to ignore the possibility that fewer and fewer corporations were participating in the S&P 500's accomplishments.

Sell in May and go away? The smart money may have already rebalanced in March, and it's not like institutional advisers hadn't been tipping their hands.

1. March 16, 2012. In "Relatively Tight Credit Still Weighing On Overseas ETFs," I discussed the implications of 3-month LIBOR rates flat-lining and Spanish bond yields soaring. I offered the possibility of shorting iShares MSCI Spain (NYSEARCA:EWP).

2. March 28, 2012. In "Shifting Toward Non-Cyclical Stock ETFs in Q2," I discussed the advantages of pharmaceutical-heavy iShares High Dividend Equity (NYSEARCA:HDV) and consumer staples-intensive PowerShares S&P 500 Low Volatility (NYSEARCA:SPLV).

3. April 4, 2012. Before the disappointing jobs report, I gave "3 Reasons For Pursuing Income Producing ETFs." In the feature, I talked about the pursuit of yield in the springtime, from PowerShares Insured National Muni (NYSEARCA:PZA) to PowerShares CEF Income (NYSEARCA:PCEF) to iShares Corporate High Yield (NYSEARCA:HYG).

It's not that I have been pessimistic since mid-March ... on the contrary. I have regularly advocated adding to higher-yielding stock ETFs like EG Shares Emerging Markets Low Volatility (NYSEARCA:HILO) on pullbacks. Of course, we are only now getting the chance to see a substantive sell-off in riskier assets.

And while questionable global demand for oil and natural gas has been hurting the price of energy pipeline partnerships, I still like the prospect of steady growth and income from these high-yielding transporters. Cons notwithstanding, look to 6%-8%-plus from JP Morgan Alerian (NYSEARCA:AMJ) or Yorkville High Income MLP (NYSEARCA:YMLP).

Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.