Best ETFs For Sectors In 2012

By Tom Lydon: The latest data from S&P Capital IQ suggests that investors are still taking a defensive stance, evidenced by the particular exchange traded funds they are choosing. The most popular ETFs are dividend-focused, which helps create an income stream and protect against some downside risk.

By Tom Lydon: Materials sector exchange traded funds have been outperforming broader U.S. equities as global growth gains momentum, notably in the emerging markets.The Materials Select Sector SPDR (XLB) has gained 8.2% over the past month, while the S&P 500 rose 3%.

By Tom Lydon: Exchange traded funds that invest in Canada have benefited from the move higher in commodities prices due to the country’s strong presence in natural resources and energy markets. The ETFs have been supported by solid third quarter profit at major oil companies, the European Central Bank rate cut and hopes the Greek bailout will survive.

Tom Lydon submits: Alcoa’s first-quarter results Monday start the earnings season as Wall Street gets its latest update on the health of corporate America. Investors can capitalize on the potentially greater fortunes of U.S. companies through earnings- or revenue-based exchange traded funds (ETFs). Indexing based on revenues, rather than a company’s size, may be an appealing strategy for an economic cycle entering a recovery mode.

By Tom Lydon: The New Year is a fresh start for investors and their approach to the stock market. Analysts are predicting that dividends and international debt will be hot exchange traded fund sectors to add to a portfolio."While many forecasts for 2013 are tied to the state of the U.S. economy and the likelihood of Congress having resolved the fiscal cliff, S&P Capital IQ believes the ETF industry will continue to gather assets," S&P Capital wrote in a recent note.

By Tom Lydon: New money continues to flow into U.S. equity exchange traded funds during the final month of 2012. With the impending fiscal cliff less than one month away, investors are prepared to put more capital into certain sectors should a deal be reached.

By Tom Lydon: Homebuilder stocks and exchange traded funds are in focus this week amid several key data points on the housing market that will let investors gauge the strength of the ongoing recovery. Builder ETFs are hovering around multiyear highs and have been one of the best-performing sectors in 2012.

By Tom Lydon: Gold ETFs continue to rise as the precious metal touched $1,700 an ounce on Tuesday, to its highest level in about six months on speculation central banks will announce more easing measures to support the global economy.Investors are using ETFs to position for higher gold prices.