Halloween is one of the most underrated holidays of the year, up there with Pi Day and Leif Erikson Day. You get to dress up, you get to play “Thriller” nonstop, and you get candy, thanks to trick-or-treating.
Or at least you did. If you’re older than 16 and you have any social awareness, you’ve had to hang up your bucket and leave trick-or-treating to the kids.
Until today.
The following exchange-traded funds are “treats” and “tricks” for adults in the room. The “treats” are just darn good funds. The “tricks”? Well, they’re not necessarily funds that belong in every portfolio, but have an interesting hitch that makes them useful in select situations.
[See: 20 Awesome Dividend Stocks for Guaranteed Income.]
Treat: PowerShares S&P 500 High Dividend Low Volatility Portfolio (ticker: SPHD). The SPHD, as the name implies, invests in dividend stocks (50, to be exact) that, over a 12-month period, have offered high yields and demonstrated low volatility. Thus, the fund is heavy in utilities, industrials and real estate, and top holdings include solid yielders like HCP ( HCP) and CenturyLink ( CTL). The result: SPHD has outperformed the Standard & Poor’s 500 index since inception, but most notably, has acted as a source of stability during market hiccups. Expenses are 0.3 percent, or $30 annually on every $10,000 invested.
Trick: QuantShares Hedged Dividend Income Fund (DIVA). Apologies for all the puns, but this ETF teaches an old dog a new trick. The Dogs of the Dow theory, very briefly, involves buying the highest-yielding Dow Jones industrial average stocks with the thought that their high yield also reflects high value, which should lead to outperformance via capital gains, too. DIVA looks at a much broader universe of stocks, invests in the highest-yielding stocks, then takes it a step further by shorting numerous low-yielding stocks, for a 100 percent-50 percent long-short balance. DIVA is up 13 percent year-to-date and yields nearly 3 percent. Expenses are 0.99 percent, including a 5.07-percentage-point fee waiver.
Treat: Robotics & Artificial Intelligence Thematic ETF (BOTZ). The name of this fund is decadent, but the real treat from BOTZ is the snooze-worthy nougat filling. Top holdings include giant industrial automation companies like Japan’s SMC Corp. and Switzerland’s ABB ( ABB). These aren’t stocks playing off the consumer fad aspects of robots and AI — this is where real, consistent money will be made as machines take on increasingly complex industrial functions. But, if you’re dying for excitement, BOTZ also holds stocks like Mobileye ( MBLY), which is teaming up with BMW and Intel Corp. ( INTC) to power driverless automotion. Expenses are 0.68 percent.
[See: 9 Blue-Chip Powerhouse ETFs to Buy.]
Trick: First Trust US IPO Index Funds (FPX). The trick behind the FPX is that it actually doesn’t invest in initial public offerings … at least, not before they actually go public, which is what most people want. In fact, it won’t invest in any IPO until six days after the company goes public. But it does hold through the first 1,000 trading days, allowing the fund to suck up the gains of stocks like Facebook ( FB) and AbbVie ( ABBV). FPX doesn’t make many headlines, but it’s one of the 10 best-performing equity ETFs over the past 10 years. Expenses are 0.6 percent.
Treat: SPDR S&P Biotech ETF (XBI). Yes, biotech stocks aren’t exactly in favor right now thanks to price-hiking scandals from Mylan ( MYL), Valeant Pharmaceuticals International ( VRX) and Turing Pharmaceuticals drawing the attention of the Great Eye of Washington, D.C. However, even if biotech-unfriendly Hillary Clinton enters the White House, a red House of Representatives should keep her efforts in check. Enter XBI. This fund capitalizes on the explosive potential of smaller biotech companies, both in positive trial results and buyouts by bigger pharma outfits. In the short-term, expect XBI to enjoy an Election Day relief rally. Expenses are 0.35 percent.
[See: 10 Ways to Invest in Pharmaceuticals With ETFs.]
Trick: REX Gold Hedged S&P 500 ETF (GHS). Using gold as a hedge against stocks is an age-old tactic that often finds success because uncertain, declining stock markets often drive investors into safe-haven assets such as gold. The problem? It’s not a perfect hedge, and sometimes gold and stocks can move in lockstep. However, in certain conditions — say across a year in which the Fed continuously pushed off raising interest rates — stocks and gold alike can benefit. That’s the optimal environment for the GHS, which goes long gold futures as a hedge against its long positions on S&P 500 holdings. GHS has doubled the S&P 500 year-to-date. Expenses are 0.48 percent after a 5-basis-point fee waiver.
More from U.S. News
High-Tech Investing: 7 Sectors to Watch
7 Dividend Stocks to Buy That Pay More Each Year
Halloween ETF Haul: 3 Tricks, 3 Treats originally appeared on usnews.com
