These ETFs Are Near 52-Week Highs But Could Go Higher
In the tail-end of a rally that started in June, plenty of ETFs are trading near 52-week highs.
This outperformance might lead some investors to believe these funds have been overbought. After all, many investors are conditioned to hunt for value by searching for beaten names. However, buying stocks that are making new highs has proven to be an efficacious strategy on a historical basis and the same can be applied to ETFs.
The following four ETFs are trading near new 52-week highs and could deliver even more upside if markets remain in rally mode.
SPDR S&P Dividend ETF (NYSE: SDY) The SPDR S&P Dividend ETF is trading close to 25 cents below its 52-week high.
SDY has risen around 3 percent in the past month, trailing the SPDR S&P 500 (NYSE: SPY) by about 100 basis points. However, utilities and health care names comprise more than 38 percent of SDY's weight, so the ETF has a lower beta than SPY.
In addition, SDY's dividend yield of nearly 3.2 percent is vastly superior to what an investor gets with SPY. With investors being forced out of cash and Treasuries in an effort to find yield, slow-moving SDY could easily continue making new highs through the end of the year.
iShares MSCI Philippines Invstable Market Index Fund (NYSE: EPHE) The emerging markets universe not been steady for ETF investors this year, but the iShares MSCI Philippines Invstable Market Index Fund has provided some shelter from the storm.
Through the first half of 2012, EPHE was one of the top-performing country funds, implying that if the broader emerging markets universe starts to grow rapidly, EPHE may excel to an even greater degree. The fund is currently trading about 40 cents below its 52-week high.
PowerShares Dynamic Media Portfolio (NYSE: PBS) Perhaps the PowerShares Dynamic Media Portfolio is getting an Olympics bounce. Comcast (NASDAQ: CMSCA), majority owner of NBC, is the ETF's second-largest holding with a weight of approximately 5.49 percent. Alternatively, the fund's recent outperformance may stem from the approaching impact of increased election-year advertising spending.
Whatever the reason, PBS has broken out to new highs. The fund has gained almost nine percent in the past three months, validating the prediction that 2012 would be an excellent year for this ETF.
Market Vectors Retail ETF (NYSE: RTH) Amid the past several months' mediocre economic data, the Market Vectors Retail ETF has managed to surge almost 10 percent since June. Along the way, RTH has not only broken out to a new 52-week high, but also has outperformed some rival retail funds, including the SPDR S&P Retail ETF (NYSE: RTH).
RTH's lineup explains the fund's recent outperformance. The ETF is not heavy on risky apparel and high-end retail names. Rather, Wal-Mart (NYSE: WMT), Target (NYSE: TGT) and CVS Caremark (NYSE: CVS) comprise over 21 percent of the fund's weight.
For more about ETFs that are moving higher, click here.
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