Dip Buying? Try These Five ETFs

These days, it's hard to be excited by much in the ETF universe from long side. Unless of course you've taken to buying inverse funds, which has been a fine idea since the start of May. Yes, these are trying times, but this is also the type of environment where the astute investor can scoop up some solid ETFs at discount prices. While that's not an invitation to bet the farm or initiate large positions, the following ETFs may just be what the doctor ordered for those that are looking to buy on a dip. 1) PowerShares Dynamic Food & Beverage ETF PBJ: PBJ has a been a constant favorite in this space for several months, but even the defensive trade got a little crowded as the pundits like to say, forcing PBJ down about 5% in the past month. Upon further examination, there's a lot to like here. Hershey HSY, the ETF's biggest holding, is catching a bid on plunging cocoa prices while Smithfield Foods SFD, the world's largest hog producer, recently reported surprisingly strong quarterly results. For good measure, General Mills GIS, the second-largest U.S. food company, reiterated guidance, and in the case of all three of these PBJ holdings, if they're coping with commodities prices, that's a good thing. 2) PowerShares Dynamic Industrials ETF PRN: Through its exposure to Caterpillar CAT, General Electric GE and some others, PRN shares a tight correlation with the Dow Jones Industrial Average and that has not been a good thing lately. The flip side to that is if you're a believer in a third quarter through year end rally, as long as PRN continues to find support at its 200-day moving average, an entry below $30 is attractive right here and now. 3) Market Vector Gold Miners ETF GDX: Perhaps the riskiest member of this list, GDX and other mining ETFs have been decimated lately and that's no surprise given that they were lagging the metals their constituents mine for earlier this year. The bet here is that the scenario change and gold miners will at some point start to perform in line with gold. The risk is that there is no clear timetable for when that will start to happen. Downside risk is a move below $50. 4) Market Vectors Coal ETF KOL: A clear victim of the high-beta trade being turned off, KOL's price has changed for the worse, but the fundamentals of many of its top holdings have remained rock solid. Hey, if bullish comments on the coal sector earlier today by Goldman Sachs aren't enough to give KOL some positive mojo, we're not sure what it's going to take. 5) iShares S&P SmallCap 600 Index Fund IJR: Small-caps certainly helped the cause on the way up, but they've been a real drag on the way down. The Russell 2000 serves as a great indicator of fund manager sentiment and it's hard to imagine that Index staying flat if the Dow and S&P 500 rally in the third quarter. While IJR does not track the Russell 2000, it's worth a look on a pullback to the $68 area. From there, the ETF could run to the mid- to high-70s by year end.