For immediate release
Chicago, IL – April 08, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. ETFs recently featured in the blog include SPDR MSCI USA StrategicFactors ETF QUS, VanEck Vectors Morningstar Wide Moat ETF MOAT, iShares MSCI USA Min Vol Factor ETF USMV, SPDR S&P Dividend ETF SDY, and Pacer Global Cash Cows Dividend ETF GCOW.
Here are highlights from Thursday’s analyst blog:
How to play the uncertainties in Q2 with ETFs?
The global market is at a critical juncture right now. The supply chain problems caused by the pandemic and the resulting rampant inflation, the Russian-Ukrainian war that led to Western sanctions and the resulting blow to the commodity market, and the tightening of the policy of central banks in the developed world to fight inflation could push the world economy into recession in the medium term, according to some analysts.
China has returned to lockdown mode due to a spike in COVID-19 cases. The United States halted Russian bond payments, increasing the risk of default. The Fed’s fight against inflation will trigger a recession in the United States that will begin at the end of next year, Deutsche Bank warned on April 5.
The probability of a recession in the United States next year could reach 35%, according to economists at Goldman Sachs Group Inc., according to a report by Bloomberg, cited in a Yahoo Finance article in mid-March. There’s a 35% chance the S&P 500 will fall into a bear market, according to Bank of America, as reported on CNBC.
The broader market has become extremely volatile and news driven. Bond yields go up and down every day. As a result, value and growth-oriented investments flex their muscles alternately. So, with a number of disincentives circulating in the market, it is wise to look for quality when picking stocks. Market watchers and market participants test different investment techniques to find trustworthy stocks. In this regard, we highlight some interesting strategies below.
No wonder such a volatile environment calls for quality investments.SPDR MSCI USA ETF StrategicFactors measures the stock performance of large and mid caps in the US stock market. It aims to represent the performance of a combination of three factors: value, quality and low volatility.
There are VanEck Vectors Morningstar Wide Moat ETF. The fund tracks an index that tracks the overall performance of “attractively priced companies with sustainable competitive advantages”. Therefore, this fund requires quality exposure. MOAT tracks the overall performance of the 20 most attractively priced companies with sustainable competitive advantages.
Low Volatility ETFs
Low volatility ETFs have the potential to outperform the broader market in an uncertain environment, providing significant portfolio protection. This is because these funds include more stable stocks that have experienced the least price movement in their portfolio. In addition, these allocate more to defensive sectors which generally have a higher payout yield than broader markets. ETF iShares MSCI USA Min Vol Factor is an example in this regard.
Dividend Growth ETFs and High Dividend Low Volatility ETFs
Companies that are willing and able to pay and grow their dividend over time are called dividend aristocrats. These activities make them quality choices. US-based dividend growth ETFs include SPDR S&P Dividend ETFwhich charges 35 basis points in fees and earns 2.61% per annum.
Cash Cow ETF
According to Investopedia, “a cash cow can refer to a business, product, or asset that, when acquired and paid for, will produce consistent cash flows throughout its lifespan.” In other words, these companies are known for their continued positive cash flow, reflecting their inherent strength. Knowing that a cash cushion is always necessary in a difficult market, one can easily look at indicators related to cash flow to measure the performance of a business.
ETF Pacer Global Cash Cows Dividend provides exposure to global companies with high dividend yields backed by high free cash flow yield. The United States (32.33%), the United Kingdom (18.74%) and Japan (13.97%) occupy the first three places of the fund. The fund charges 60 basis points (bps) in fees and earns 4.11% annually.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.
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SPDR S&P Dividend ETF (SDY): ETF Research Reports
VanEck Morningstar Wide Moat ETF (MOAT): ETF Research Reports
iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports
ETF SPDR MSCI USA StrategicFactors (QUS): ETF Research Reports
ETF Pacer Global Cash Cows Dividend (GCOW): ETF Research Reports
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.