Tracking the Best ETFs in May

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Sell in May and go away? Well, that wasn’t very good advice this year, especially if you were allocated to emerging markets and, in particular, India and Russia.

The table below shows the top-performing exchange-traded funds (ETFs) during May (excluding leveraged funds). As you can see, the list is dominated by India, with returns of more than 22% in the top three India-centric funds.

Ticker Name Return Assets (in $millions)
SCIN India Small Cap ETF 23.53% 20.40
SCIF India Small-Cap Index ETF 23.12% 110.35
INXX India Infrastructure ETF 22.72% 16.50
SMIN MSCI India Small Cap Index Fund 18.83% 5.37
RSXJ Market Vectors Russia Small-Cap ETF 15.08% 16.19
ERUS iShares MSCI Russia Capped ETF 13.53% 388.08
RBL SPDR S&P Russia ETF 12.88% 33.36
RSX Market Vectors Russia ETF 12.61% 1,187.90
EPI India Earnings Fund 11.87% 1,022.03
INCO India Consumer ETF 11.13% 4.47

The gains were so good in the small-cap segment of the Indian market that we were able to close out a profit of nearly 27% in the India Small-Cap Index ETF (SCIF) in the Successful ETF Investing newsletter advisory service. Moreover, we captured that gain in just three weeks to serve as a testament to very good timing, as well as the power of country-specific ETFs in hot sectors.

One thing that makes a sector hot, especially when it comes to country-specific funds, is some type of major political change or policy reforms. In the case of India, the gains really started when it became clear that the Indian people were about to elect the pro-business Bharatiya Janata Party, or BJP, and particularly the BJP Party leader Narendra Modi to the post of prime minister. The market loved this development, and hence the big gains in our SCIF position.

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The second market on this list making bullish waves in May is Russia. Now, with all of the bellicose political headlines over the past several months between Russia, the Ukraine and Crimea, you might think that Russia is a market to avoid at all costs. Well, this view would be both short-sighted and wrong.

RSX-60414

The chart here of the Market Vectors Russia ETF (RSX) shows the big move higher in the Russian equity market since mid March. Interestingly, though RSX is trading above its 50-day moving average, it has not yet broken resistance at the 200-day moving average of $26.01.

If the buying continues in RSX, it could be the catalyst for a very bullish move above the 200-day average — and that could foist this fund into even bigger gains in the latter half of 2014.

Introducing the New Successful ETF Investing

After nearly four decades of helping investors make money, the one thing we know is that in order to continue delivering the best possible investment advice, we have to keep evolving and keep adjusting to the tools the market provides. This is a philosophy that my father, Dick Fabian, held when he first started the flagship Fabian publication, and this is a philosophy that still operates at the core of our business approach.

Our belief is that ETFs will continue to dominate the investment landscape, and that means they also should be the primary vehicles in your investment portfolio. With that concept at the forefront, I am proud to introduce the new Successful ETF Investing.

Our newly redesigned, revamped, and renamed publication offers an enhanced focus on ETFs, a focus that includes new sections, new features and new portfolios to help income, growth and even very aggressive investors make more money.

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One example of a pick designed for the aggressive investor is the recent addition of a small-cap, country-specific ETF in one of the hottest emerging market countries in Asia. This ETF is up more than 15% during just the past week, and that’s the kind of profit potential we’re seeking in our new aggressive recommendations.

We are very proud of our tuned-up version of Successful ETF Investing, and we know you’re going to love it. Check out Successful ETF Investing right now to discover what it’s all about.

How to Avoid the Knockout Punch

“The knock-out punch is always the one you never see coming.”

–Aimee Mann

Singer/songwriter Aimee Mann is known for her hauntingly emotional voice and her thought-provoking lyrics. Here, however, she gives us a little lesson that applies to investing. You see, it’s usually not the things you’re prepared for that hurt you the most. It’s usually the shot you never saw coming that really knocks you out. That’s what happened to many investors in 2008-2009. Fortunately, our readers didn’t get smacked with that knockout punch, as we had warned consistently that the housing bubble was overblown and likely to burst. And while nobody really knew how bad things were going to get, we did know that you always have to be ready for that wealth-destroying punch thrown from seemingly nowhere.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Making Money Alert readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

Exclusive  My #1 Pick in Russia, the World's Most Hated Stock Market

In case you missed it, I encourage you to read my e-letter column posted last week on Eagle Daily Investor about how the Chinese market has risen quietly. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

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This year is turning out to be a terrific one for income investors.

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