These days, it's hard to fathom investing for the long-term, unless the conversation involves Warren Buffett. Buffett, the legendary value investor and chairman CEO of Berkshire Hathaway BRK BRK-B) has made a fortune taking a long-term view of his company's investments, whether they be acquired businesses or equity stakes.
Even with the obvious lessons investors can learn from the Oracle of Omaha, these days most investors want to be traders as well. That's not surprising when phrases such as "high-frequency trading" and "buy-and-hold is dead" are oft-repeated buzzwords.
Of course there is also the misnomer that all ETFs are volatile instruments only worthy of use over short-term time frames. Contrary to that misinformation, there are myriad ETF options for investors looking to play long-term ideas. Here are some to consider.
First Trust ISE-Revere Natural Gas Index Fund FCG
Did you notice that as natural gas prices have started to rebound the First Trust ISE-Revere Natural Gas Index Fund went on a seven-day winning streak? Getting in the business of calling a bottom in natural gas has proven foolhardy, but if the commodity does experience a renaissance, FCG is one ETF that will benefit.
FCG's long-term prospects are bright for multiple reasons. First, many Americans are realizing the benefits of moving toward natural gas for power generation and as a transportation fuel. Second, many of FCG's holdings are oily plays, so the ETF is somewhat levered to rising oil prices. Third, this ETF is littered with potential takeover targets.
EGShares Emerging Markets Consumer ETF ECON
The emerging markets consumer is is certainly an investable theme, but it has to be executed the right way. That means gaining exposure to local brands and ECON, one of the original and dominant EM consumer ETFs, does that.
The knock on ECON, particularly as a long-term play, is the 0.85% expense ratio. On the other hand, ECON is up 22% since its late 2010 debut. The fund is also heavier on staples names over discretionary stocks, indicating it has a more conservative posture than meets the eye.
WisdomTree Emerging Markets Equity Income Fund DEM
The WisdomTree Emerging Markets Equity Income Fund proves one point long-term investors should be aware of: Dividends matter. DEM can be viewed as the dividend-paying answer to the Vanguard MSCI Emerging Markets ETF VWO and the iShares MSCI Emerging Markets Index Fund EEM.
VWO and EEM are the two largest EM ETFs and two of the largest U.S. ETFs overall. Both are down significantly over the past five years, but DEM is up by almost 10%. Someone must be paying attention. DEM had $3 billion in AUM in late February. Today, that number is over $3.8 billion.
WisdomTree Emerging Markets Corporate Bond Fund EMCB
The WisdomTree Emerging Markets Corporate Bond Fund has proven to be one of the better new ETF ideas of 2012 and the fund will always be able to say it was the first to be devoted exclusively to EM corporate bonds. Better yet, EMCB will probably always offer better yields than U.S. Treasuries.
Approximately three-quarters of the fund's holdings are investment-grade and about 14% of EMCB's country weight goes to Hong Kong (not an emerging market) and South Korea (only an emerging market in the eyes of one particular index provider).
Bottom line: There are multiple reasons why emerging markets bonds are more attractive than their developed markets counterparts and EMCB is poised to benefit over time from those reasons.
For more ETFs for patient investors, please click HERE.
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