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.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.