Betting Big on the U.S. Economy
The U.S. financial sector 2012 has a lot in common with the 1840s California gold rush: There's so much opportunity, but so many terrifying risks as well. Financial stocks have been showing significant volatility for the last several years, posting big gains during market rallies but struggling mightily when uncertainty and anxiety spike. While volatility gives many investors heartburn, it undeniably creates big opportunities for those skillful enough to anticipate swings in market sentiment. Today I'm diving into a financial ETF that doesn't have nearly the assets or trading volume of a fund like Financial Select Sector SPDR (XLF), but can be a pretty useful tool for beefing up exposure to a narrow segment of the U.S. financial industry.
There are a couple of investment theses bundled into iShares Dow Jones U.S. Broker-Dealers Index Fund (IAI), each of which may have its own unique appeal. First is the exposure to stock exchanges, a corner of the financial market that has seen expanding margins in recent years amid significantly higher trading activity and the increasingly complex, rising number of products available to investors. With substantial allocations to stocks such as the CME Group (CME), at 6.5% of holdings; IntercontinentalExchange (ICE) at 5%; and NYSE Euronext (NYX) at 5%, IAI offers a way to overweight this segment of the financial sector....350 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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