What to Buy Now

Mutual Funds

What to Buy Now

Top ETFs for today's market.

Don't let the bear market paralyze you. We don't know when stocks will end their slide, but these five exchange-traded funds look timely.

SPDR S&P Biotech Index (symbol XBI). The biotechnology sector has a history of behaving independently of sweeping stock-market trends. Lately, that's been a good thing: The ETF lost just 2% in the first half of 2008.

Rydex S&P Equal Weight Technology (RYT). According to First Call, analysts on average see technology-company earnings rising 13% this year and 18% in 2008. Yet the group has been hammered. For more on the Rydex ETF, see the facing page.

PowerShares Dynamic Banking (PJB). This contrarian bet is filled with midsize regional banks. It's a better choice, for now, than the riskier Pro-Shares Ultra Financials (see the story, at left). There are parallels between technology stocks in 2002 -- after their crash -- and banks in 2008. Tech got better. So should banking.


SPDR Lehman Municipal Bond ETF (TFI). This ETF yields 3.8%, the same as the ten-year Treasury note. But because the ETF invests in tax-free muni bonds, that 3.8% yield is equivalent to a taxable yield of as much as 5.8% for taxpayers in the 35% federal bracket. The ETF, which launched in September 2007, charges annual fees of just 0.20%.

ProShares UltraShort Lehman 20+ Year Treasury (TBT). With yields in the area of 4% and inflation rising, Treasury bonds are unattractive. This ETF, which launched in May, is designed to deliver twice the daily inverse return of a long-term Treasury-bond index.