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July 29, 2009
If only you had loaded up on technology stocks in the late '90s and dumped them before the dot-com bust. Or jumped into commodities before they went gangbusters in 2007. Perhaps if you had foreseen the recent market collapse and moved all of your money into treasuries. But unless your trading abilities include psychic perception, it's not likely that you make the right calls all of the time.
Sure enough, there are funds that aim to do just that. One such is the Huntington Rotating Markets Fund, which invests in what's hot—be it a small slice of the market, like gold, or a broader category, such as large companies—and dumps (or avoids) what's not. The fund, which uses exchange-traded funds to gain exposure to a segment of the market, is currently almost fully invested in emerging markets, including Brazil, Taiwan, China, and Russia, according to manager Paul Koscik. "They're cheaper than the U.S., and if you look at growth rates, they're much higher," he says. "Investors tend to gravitate to areas of the market with great growth that they don't have to pay much for, so that's where the money goes. I think it's possible that in the next year we'll see a bubble in emerging markets."
The key, of course, is getting out before the bubble bursts.