With the benefit of the broader market's recent sturdy performance, plenty of exchange-traded funds can be found within spitting distance of their 52-week highs. To be precise, nearly 670 ETFs, or almost half the entire exchange-traded products universe, currently reside with five percent or less of their 52-week highs.
Obviously, that is a lot of ETFs to sort through to find credible candidates exhibiting strong technicals without being overbought. To whittle the list down, a screen was run to find only those ETFs trading above their 20-, 50- and 200-day moving averages with relative strength index readings of 60 or below so as to include those ETFs that are not overbought.
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Using those parameters, 140 ETFs came back, still a healthy list. To pare the group down even further while ensuring the funds that came back would represent better yield plays than short-term cash instruments, a dividend yield of at least one percent was added. That cut the list down to 41. Not a large number, but enough to find some ETFs worth embracing even though they have already run higher.
First Trust Large Cap Core AlphaDEX Fund (NYSE:FEX) The First Trust Large Cap Core AlphaDEX Fund is not the typical large-cap broader market ETF on the market today. For starters, Netflix (NASDAQ:NFLX) is the fund's top holding. More importantly, FEX keeps with AlphaDEX tradition of eschewing traditional market capitalization weighting in favor of a deeper screening process.
Screening by growth factors such as price appreciation and value factors such as return assets, FEX is an almost 380-stock ETF where no individual holding represents more than 0.87 percent of the ETF's total weight. FEX is also diverse at the sector level as five industry groups consumer discretionary, industrials, energy, technology and financials receive double-digit allocations.
Thirty-day average daily volume of less than 70,000 shares might imply lower liquidity with FEX, but that assumption would be inaccurate. Not only are the bulk of the ETF's underlying holdings robustly traded, but FEX rarely trades uncomfortably above the midpoint of its bid/ask spread. FEX is currently just 0.9 percent below its 52-week high.
Guggenheim Multi-Asset Income ETF (NYSE:CVY) The Guggenheim Multi-Asset Income ETF may not be as large as some of the more well-known dividend ETFs out there, but it is by no means small. Nearly $909 million in assets under management affirms as much. More importantly, CVY makes good on its name and provides investors exposure to several high-yielding asset classes under one roof.
Yes, CVY is home to common stocks such as Norfolk Southern (NYSE:NSC) and Gannett (NYSE:GCI), but the ETF also features Canadian royalty trusts, closed-end funds, MLPs, REITs, preferred and foreign stocks among its lineup. The result is a trailing 12-month yield of almost 5.1 percent.
Conservative investors will like the fact that CVY is not exceptionally volatile with a beta of 0.97 and a standard deviation of 12.37 percent, according to Guggenheim data. CVY is up 7.2 percent year-to-date and is currently trading just 0.6 percent below its 52-week high.
Global X FTSE Nordic Region ETF (NYSE:GXF) Southern Europre has again shown it can be a volatile place to invest. Recent challenging headlines include Spain's astronomical unemployment rate, pressure on Italian equities following that country's elections and Greece's demotion to emerging markets status.
That type of news flow reminds investors that the Nordic region remains an area of strength in Europe. It is not surprising to see the Global X FTSE Nordic Region ETF on this list, particularly because the iShares MSCI Sweden Index Fund (NYSE:EWD) and the Global X Norway ETF (NYSE:NORW) are flirting with new 52-week highs as well. Sweden and Norway combine for over 69 percent of GXF's weight.
Do not sleep on GXF's 20.6 percent allocation to Denmark, either. Danish equities have performed well this year and the country, like Sweden and Norway, is not a Eurozone member, perhaps adding to the bull case for investing in Denmark. As for GXF, it is just pennies away from a new high and if the ETF breaks through resistance at $22, that could represent a breakout.
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