An ETF For M&A's Rebound

There was some decent M&A activity today with Denbury Resources' (NYSE: DNR) $3.2 billion purchase of Encore Acquisition (NYSE: EAC) announced before the bell and Stanley Works' (NYSE: SWK) $4.5 billion buy of Black & Decker (NYSE: BDK) announced after the close.

Throw in CF Industries (NYSE: CF) upping its bid for Terra Industries (NYSE: TRA), which may force Agrium (NYSE: AGU) to up its bid for CF and it was a pretty busy "Merger Monday."

If you're a believer in the M&A trend continuing, the ETF Professor recommends the SPDR KBW Capital Markets ETF (NYSE: KCE). KCE holds stocks that benefit from increased M&A like Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and other brokers and M&A advisers.

Volume in KCE was more than 30% above its daily average today, but the ETF Professor cautions that many of the financials KCE holds, Goldman included, appear a bit overbought at this point and you might be able to get KCE at a better price, say below $35.