ETFs Moving On Looming Fed Rate Hike

The better-than-expected jobs number publicized March 6 sent the market into a downward spiral, as many believe a 2015 rate hike has become more plausible, ending the Federal Reserve's five-year zero interest rate policy.

Sectors that have been affected the most are those that investors have flocked to the last couple years for their high yields in lieu of low-bond yields. Now that bond yields are jumping on an anticipated rate hike, many investors are dumping holdings in the utility, REIT and other high-yield sectors.

Additionally, as the U.S. prepares for monetary tightening and Europe continuing its quantitative easing program, the dollar will continue to be positively affected through 2015.

Highlighted below are a number of ETF that have been affected in some way by the positive jobs numbers and will be moving ahead of an anticipated interest rate hike by the Fed.

Related Link: U.S. Dollar Index Up Sharply

SPDR Gold Trust

The SPDR Gold Trust (ETF) GLD is an index that tracks movement of the gold futures market. Historically, a rise in the U.S. dollar will have a bearish effect on the precious metal and commodities as a whole.

The ETF is down 13 percent over the last 12 months and down 7 percent over the last six months. Investors will often make a case for gold as a portfolio holding, but the trend is clear that lower prices are likely around the corner.

The ETF has an expense ratio of 0.40 percent.

Utilities Select Sector SPDR

The Utilities SPDR (ETF) XLU follows 32 companies across five sub-sectors of the utilities industry. Electrical utilities at 56 percent and multi-utilities at 40 are the most heavily weighted sub sectors.

The top individual holdings include:

• Duke Energy Corp DUK at 9 percent
• NextEra Energy Inc NEE coming in at 8 percent
• Dominion Resources, Inc. D making up 7.6 percent of the ETF

XLU is up 9 percent over the last 12 months and 2 percent over the last six. The utility ETF has a 30-day SEC yield of 3.42 percent and has an expense ratio of 0.15 percent.

Related Link: Euro/USD Sharply Lower

iShares Cohen & Steers REIT

The iShares Cohen & Steers Realty Maj. (ETF) ICF provides exposure to the 30 largest U.S. real estate companies.

The top holdings include:

• Simon Property Group Inc SPG with a 7.9 percent holding
• Public Storage PSA at 6.9 percent
• Equity Residential EQR making up 6.8 percent of the ETF

ICF is up 20 percent over the last 12 months and up 7 percent over the last six months. The ETF has a 30-day SEC yield of 2.77 percent and an expense ratio of 0.35 percent.

iShares 20+ Year Treasury Bond

The iShares 20+ Yr Trea.Bond (ETF) TLT offers investors exposure to 29 long-term U.S. treasury bonds.

Over the last 12 months, the ETF is up 18 percent and up 8 percent over the last six months. The ETF has a 30-day SEC yield of 2.5 percent and has an expense ratio of 0.15 percent.

PowerShares DB US Dollar Index Bullish Fund

The PowerShares DB US Dollar Index Bullish UUP is designed for investors who want to track the value of the U.S. dollar against the six major world currencies: the euro, the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. The most weighted currencies in the ETF are the euro at 58 percent, followed the yen at 14 percent and the pound at 12 percent.

UUP is up 21 percent over the last 12 months and up 15 percent over the last six months. The ETF has an expense ratio of 0.80 percent.