ETFs For The End Of QE2
By ETF Professor | April 28, 2011 5:34 AM EST
Tick tock. Just minutes from now, Federal Reserve Chairman Ben Bernanke could very well tell the world that the Fed will not extend its oft-criticized quantitative easing program.
Sure, QE2 has been a major catalyst for lifting ETFs, commodities and stocks higher in recent months, but the silver lining with the potential end of the asset buying program is this: Maybe the economy and equity markets are finally on firm enough footing to function (and move higher) on their own merits.
Of course there will be detractors that say the end of QE2 is bad news for stocks, so playing this news means a mix of conservative picks along with some high-beta fare might be the best approach. So here are some ETFs for the end of QE2.
Global X Copper Miners ETF (NYSE: COPX):The Dr. Copper bit gets tired after a while, but if copper is the economic harbinger that so many believe, should it not benefit from an improving economy? Weakness in copper ahead of Bernanke's comments may have been a buying opportunity in COPX.
Vanguard Dividend Appreciation ETF (NYSE: VIG):Consider this a “give me shelter” play. If stocks react negatively to Bernanke's comments, wait for the dust to settle, and then start establishing a position in this conservative, low-cost ETF.
ETFS Physical Swiss Gold Shares (NYSE: SGOL):Strictly opinion here, but is the end of QE2 really bad for gold? If investors like what they hear, commodities still get bid up. If they become concerned, they run to a safe haven. Enter gold.
iShares Dow Jones US Pharmaceuticals Index Fund (NYSE: IHE):Nirvana for conservative investors is the land of pharma. The biggest risk here isn't what Bernanke says or doesn't say. It's the fact that IHE's chart has moved in straight-line fashion in recent weeks. The good news is pharma is not be beholden to the whims of the Fed, at least it shouldn't be. An ideal buy on a dip candidate.