Goldberg's Picks: The 6 Best Exchange-Traded Funds for 2012

Funds that hold mega-cap, high-quality stocks are poised to do well. But don't give up on emerging markets.

Stocks of high-quality, blue-chip companies led all stock categories -- domestic and foreign -- in 2011, and I think they'll continue to do so this year. So in picking exchange-traded funds for 2012, I like those that focus on huge companies that have sustainable competitive advantages, boast strong balance sheets and pay dividends.

Last year's results mark a reversal of a long pattern of small- and midsize-company stocks topping their larger-capitalization brethren. Today, large caps are cheaper based on price-earnings ratios and other measures. What's more, blue chips should hold up better if the euro-zone crisis boils over.

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Steven Goldberg
Contributing Columnist,
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or