Popular on the Street:Utilities Select Sector SPDR

The Utilities Select Sector SPDR ETF had a 12-month yield of 3.43% as of this morning.To have a good single digit compound rate of return is a very nice thing to have in a portfolio,said David Kotok,founder,chairman and CIO of Cumberland Asset Management.Cumberland has the etf in its managed portfolios.The fund is insulated from central bank moves and other overseas problems,consisting of mostly domestic electric utilities,with some natural gas,Mr.Kotok,who has a BS in Economics from the University of Pennsylvania's Wharton School of Business,pointed out.*
Morningstar Associates gives the Utilities Select etf five stars out of five.It is a strong,appealing option for investors who want broad exposure to defensive,high-yielding US utilities companies,Morningstar says.It also gives the etf a sustainability rating of three for average.This rating judges how well the companies in etf portfolios are managing the environmental,social and governance issues relevant to their industries.
The top five holdings of the Utilities Select etf are:
1.NextEra Energy Inc;
2.Duke Energy Corp;
3.Southern Co;
4.Dominion Resources Inc;
5.Exelon Corp. *
Utilities Select Sector SPDR ETF (XLU)

A Warning To High Yield Investors From Billionaire Carl Icahn

Billionaire activist investor Carl Icahn tweeted that a meltdown in high yield was just beginning.For example,Third Avenue Management is liquidating its Focused Credit Fund and preventing withdrawals,promising to distribute the bulk of investors' money on 16 December,and put the rest in a trust that will pay them interest and make distributions to them until its liquidation costs are covered.The fund was liquidated because so many investors were redeeming their shares at once,Third Avenue said in a letter to the fund's investors.*
We did have that Seeking Alpha conference,Mr.Icahn told CNBC.I warned then it's simple and self-evident that the high yield market is just a keg of dynamite that sooner or later will blow up.The etfs of BlackRock and other companies are very dangerous because there's no liquidity behind these etfs.I think that any person that goes into this should basically be warned.You're starting to see the danger that is manifest now that there is no liquidity for these high yield bonds.They were sold at very low interest rates.Because it's BlackRock,everybody believes there's going to be liquidity.
It's just beginning to be a major problem.The SEC sees danger because these companies that really should have had to pay higher interest rates borrowed a great deal of money,and I'd like to know how they're going to pay that back,or even how they're going to restructure the finances,Mr.Icahn explained.

What BlackRock Sees

The tone of regulators in the U.S. and Europe is pretty consistent:a more secure banking system with more capital,according to Laurence Fink,CEO of BlackRock,the world's largest money manager.In Europe,they're talking about Basel III,with lots of capital,and it's similar in the U.S.Most certainly banks are more reluctant to lend, because they're not certain about capital requirements in the future.Corporations are not hiring;not building factories;and not buying equipment.Huge pools of money are sitting in banks and corporations.This is the problem we're seeing today in our economy.They're seeing what the new regulations will be.
BlackRock is seeing increased appetite for mutual funds and exchange-traded funds.We're seeing renewed interest in equities,as opposed to fixed income.We're not concerned about our competition at all,Mr.Fink insisted.The etf market needs a lot of liquidity and research.It is our belief the etf market will continue to grow from both institutions and individual investors.
There's a healing in commercial real estate going on,Mr.Fink believes,but not fast enough.He's not terribly worried about it,although some of the regional banks will be destabilized.The Federal Reserve is aware of this.
Mr.Fink is one of the more forthright executives in the financial industry.His colleague at BlackRock,Bob Doll,follows the same path of openness.