Chinese Tech And MLP ETFs On A Tear

ETF Outlook for Week of June 30, 2014 (KWEB, AMJ, EWT, SPY)

KraneShares CSI China Internet ETF KWEB

One of the best performing non-leverage ETFs last week was KWEB. Its basket of Chinese Internet stocks rallied to the highest close since the first week in April, up 3.8 percent on the week.

KWEB's two closest competitors were up 2.7 percent and 2.0 percent. As a whole the Chinese technology sector had a strong week and its ETFs look attractive on a valuation basis versus their international peers.

KWEB does not have much resistance until the low $40’,s and it closed out Friday at $36.53.

JP Morgan Alerian MLP Index ETN AMJ

The niche master limited partnership (MLP) sector has been on fire lately as AMJ closed the week out with a gain of 2.8 percent at a new historic high. The ETF’s largest holding, Enterprise Products Partners EPD, had some good news last week and hit a new all-time high, helping boost the value of AMJ.

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The attraction to AMJ and MLPs in general is the exposure to the energy boom in the U.S., as well as above-average income payments. AMJ currently has a 4.8 percent dividend yield.

iShares MSCI Taiwan Index ETF EWT

For the week ending June 25 the Asian funds brought in $1.5 billion, the largest weekly amount in over a year. Money was flowing out of Latin American countries and into their emerging market peers.

The three countries attracting the most money were Taiwan, China (FXI), and Korea (EWY). EWT closed the week with a gain of 1.4 percent and at the best level in over three years. Both EWY and FXI have been lagging the market breakout, but both appear to stabilizing over the last few months.

SPDR S&P 500 ETF SPY

The broad-based market ETF closed the week lower by 0.1 percent after a few choppy days, but for the most part the index traded within a narrow trading range.

While the bears continue to call for a major correction, investors need to put things into perspective. The SPY is down 0.3 percent from an all-time high. The ETF will not go straight up and even the strongest bull markets have “healthy pullbacks”.

It is correct that SPY is due for a pullback, however trying to time that is difficult. The best strategy continues to be holding stocks long-term and using any healthy pullbacks as buying opportunities.