A little slower moving than our stock picks.
We’re going to cover two main areas: healthcare and commodities.
First we will add both the RYH (Rydex Equal Weight Healthcare ETF) and the IXJ (iShares Global Healthcare ETF). We like several stocks in the Healthcare sector right now and these two are a good way to cover it all with a lower volatility package. Look for specific stock picks to follow as we expand on this theme and follow the sector rotation of capital.
Next up are the recently beaten down commodity plays. Here we’ll pick up the JJA (iPath Dow Jones-AIG Agriculture Total Return ETN), KOL (Market Vectors Coal ETF) & GAZ (iPath Dow Jones-AIG Natural Gas Total Return ETN) while they are on sale. While KOL is an ETF comprised of stocks, that provides targeted exposure to companies worldwide that are engaged in the coal industry; both JJA & GAZ are Exchange Traded Notes based directly on the commodities. GAZ tracks the Henry Hub Natural Gas futures contract traded on the NYMEX. JJA includes Soybeans, Corn, Wheat, Soybean Oil, Sugar, Coffee & Cotton with Soybeans & Corn comprising half of the weighting while the Softs (Sugar, Coffee & Cotton) only hold barely a quarter all together with Wheat & Soybean Oil roughly sharing the final 22.5%. To balance out this mix, consider adding JJS (iPath Dow Jones-AIG Softs Total Return ETN) which includes roughly a third each of Sugar, Coffee & Cotton. Finally, another Soft totally missed by the larger ETNs, yet available alone, is NIB (iPath Dow Jones-AIG Cocoa Total Return ETN).
Both JJS and NIB are barely a month old so there is not much to go on, but the charts of the underlying futures contracts look poised to bounce. At this point, we would only nibble on NIB and use JJS to balance out the weighting of the JJA if you are trading large positions or have a strong desire to be equally allocated.