Scott Burns’ ETF Ideas For Yield Seekers (AMJ, IXP, XLKS)
Scott Burns sat in on Morningstar’s “Friday Five” segment Friday to discuss the week’s housing, M&A news, and most importantly to give ETF ideas for yield-seekers. Burns was posed with the question: “If you are going to put some money to work in ETFs right now what things would be on your radar?”
Well, we are focused on yield, which is really hard thing to do right now in a kind of yield free world. We really like AMJ, that’s the JPMorgan Alerian MLP ETF (NYSE:AMJ). That’s currently yielding 5.3%. It’s not quite the bargain it was six months ago. So this isn’t necessarily backup the truck, but if you are looking to boost your yield, it’s definitely something worth looking at.
We also really like global telecom right now–very steady business. I mean people will stop paying their heating bill before they’ll stop paying their cable or phone bill. IXP, particular that’s the iShares Global Telecom (NYSE:IXP), that’s yielding 4.4% right now. So that’s a fund that it doesn’t have a lot of growth prospects. But if you can earn 4.4% versus 2.5% with actually fairly similar risk characteristics, I mean that’s where you want to put your money.
And then something for those that are a little more aggressive: Obviously, M&A is picking up in the tech sector right now, and what we like is (NASDAQ:XLKS) so that’s the small-cap version of the S&P, so it’s the S&P 600, I believe, small-cap technology sector. So as the HPs and the Dells keep looking to gobble up the 3PARs of the world, those companies should see a lot of activity and really get a nice tailwind from that.
See the full Morningstar segment below: