We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights: PowerShares S&P 500 Low Volatility Portfolio, PowerShares Russell 1000 Low Beta Equal Weight, Vanguard Value, Vanguard Dividend Appreciation and Guggenheim Defensive Equity
Read MoreHide Full Article
For Immediate Release
Chicago, IL – May 1, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include PowerShares S&P 500 Low Volatility Portfolio (SPLV - Free Report) , PowerShares Russell 1000 Low Beta Equal Weight Portfolio , Vanguard Value ETF (VTV - Free Report) , Vanguard Dividend Appreciation ETF (VIG - Free Report) and Guggenheim Defensive Equity ETF .
Don’t Sell in May and Go Away, Follow These ETF Strategies
With just a day away to the month of May, investors have turned cautious given that seasonality will play a huge role in pushing stocks down for the next six months, as per the old adage “Sell in May and Go Away.” According to this investment saying, the stock market has a long history of weak performance during the summer months (May to October).
Will May 2018 Pen the Same Story?
After a blockbuster start, the U.S. stock market was hit by a series of hurdles including inflationary pressures, a faster-than-expected rates hike, political instability in Washington, geopolitical tension, technology sector turmoil and rising yields.
Additionally, the signal from European Central Bank to end the cheap money era policy anytime soon and the latest round of domestic economic data added to the weakness (read: ETFs to Benefit or Lose from Rising Yields).
This is especially true as America's economic growth slowed to start the year with 2.3% in the first quarter compared with 2.9% in fourth-quarter 2017 driven by weak consumer spending in nearly five years. Domestic demand rose 1.7% -- the slowest in two years -- after rising at a brisk 4.8% pace in the final three months of 2017.
However, tightening labor market conditions, lower tax rates, strong earnings expectations and increased government spending are expected to spur economic growth in the coming months, thereby resulting in a bullish condition for the stock market. In particular, the massive $1.5-trillion tax cut will create an economic surge, boosting job growth in manufacturing and other sectors, increasing inflation and interest rates. Additionally, it would lead to higher earnings, increased buyback activities and fat dividends.
Against such a backdrop, it might be foolish to quit the stock market altogether. Instead, investors could follow some ideas that could lead to a winning portfolio during this soft six-month period.
Focus on Low Volatility ETFs
As weak historical trends and volatility are expected to play foul in the stock market, low volatility ETFs appear sensible choices. This is because these have the potential to outpace the broader market in bearish-to-neutral market conditions, providing significant protection to the portfolio. These funds include more stable stocks that have experienced the least price movement in their portfolio. Further, these allocate more to defensive sectors that usually have a higher distribution yield than the broader markets.
While there are several options in the space, one of the most popular is PowerShares S&P 500 Low Volatility Portfolio, with a Zacks ETF Rank #3 (Hold).
Lower Risk with Low Beta ETFs
Low beta ETFs tend to exhibit greater levels of stability than their market-sensitive counterparts, and usually lose less when the market is crumbling. Though these have lower risk and lower returns, funds like PowerShares Russell 1000 Low Beta Equal Weight Portfolio are considered safe and resilient in rocky markets. The product has a Zacks ETF Rank #3.
Emphasis on Value ETFs
Value stocks have proven to be outperformers over the long term and are less susceptible to trending markets. These stocks have strong fundamentals — earnings, dividends, book value and cash flow — that trade below their intrinsic value and are undervalued. These have the potential to deliver higher returns and exhibit lower volatility compared with their growth and blend counterparts (read: Why Value ETFs May Rule in Q2).
One of the Zacks ETF Rank #2 ETFs is Vanguard.
Overweight Dividend ETFs
The dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. This is especially true as these stocks offer the best of both these world’s — safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices. The companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.
While the dividend space has been crowded, ETFs with stocks having a strong history of dividend growth seem to be good picks. Vanguard Dividend Appreciation ETF has a Zacks ETF Rank #2 (read: Here's Why You Should Buy Dividend Growth ETFs Now).
Invest in Defensive ETFs
Investors could try out safer avenues and rotate into defensive sectors, like utilities, healthcare, and consumer staples, which generally outperform during periods of low growth and high uncertainty. Additionally, this is a much better option than holding cash. Guggenheim Defensive Equity ETF having a Zacks ETF Rank #2 could be an excellent choice. This fund offers equal-weight exposure to all the stocks in the index, resulting in a more balanced and diversified portfolio. It helps the portfolio to better weather periods of volatility, while remaining positioned to take advantage of market upswings.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights: PowerShares S&P 500 Low Volatility Portfolio, PowerShares Russell 1000 Low Beta Equal Weight, Vanguard Value, Vanguard Dividend Appreciation and Guggenheim Defensive Equity
For Immediate Release
Chicago, IL – May 1, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include PowerShares S&P 500 Low Volatility Portfolio (SPLV - Free Report) , PowerShares Russell 1000 Low Beta Equal Weight Portfolio , Vanguard Value ETF (VTV - Free Report) , Vanguard Dividend Appreciation ETF (VIG - Free Report) and Guggenheim Defensive Equity ETF .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
Don’t Sell in May and Go Away, Follow These ETF Strategies
With just a day away to the month of May, investors have turned cautious given that seasonality will play a huge role in pushing stocks down for the next six months, as per the old adage “Sell in May and Go Away.” According to this investment saying, the stock market has a long history of weak performance during the summer months (May to October).
Will May 2018 Pen the Same Story?
After a blockbuster start, the U.S. stock market was hit by a series of hurdles including inflationary pressures, a faster-than-expected rates hike, political instability in Washington, geopolitical tension, technology sector turmoil and rising yields.
Additionally, the signal from European Central Bank to end the cheap money era policy anytime soon and the latest round of domestic economic data added to the weakness (read: ETFs to Benefit or Lose from Rising Yields).
This is especially true as America's economic growth slowed to start the year with 2.3% in the first quarter compared with 2.9% in fourth-quarter 2017 driven by weak consumer spending in nearly five years. Domestic demand rose 1.7% -- the slowest in two years -- after rising at a brisk 4.8% pace in the final three months of 2017.
However, tightening labor market conditions, lower tax rates, strong earnings expectations and increased government spending are expected to spur economic growth in the coming months, thereby resulting in a bullish condition for the stock market. In particular, the massive $1.5-trillion tax cut will create an economic surge, boosting job growth in manufacturing and other sectors, increasing inflation and interest rates. Additionally, it would lead to higher earnings, increased buyback activities and fat dividends.
Against such a backdrop, it might be foolish to quit the stock market altogether. Instead, investors could follow some ideas that could lead to a winning portfolio during this soft six-month period.
Focus on Low Volatility ETFs
As weak historical trends and volatility are expected to play foul in the stock market, low volatility ETFs appear sensible choices. This is because these have the potential to outpace the broader market in bearish-to-neutral market conditions, providing significant protection to the portfolio. These funds include more stable stocks that have experienced the least price movement in their portfolio. Further, these allocate more to defensive sectors that usually have a higher distribution yield than the broader markets.
While there are several options in the space, one of the most popular is PowerShares S&P 500 Low Volatility Portfolio, with a Zacks ETF Rank #3 (Hold).
Lower Risk with Low Beta ETFs
Low beta ETFs tend to exhibit greater levels of stability than their market-sensitive counterparts, and usually lose less when the market is crumbling. Though these have lower risk and lower returns, funds like PowerShares Russell 1000 Low Beta Equal Weight Portfolio are considered safe and resilient in rocky markets. The product has a Zacks ETF Rank #3.
Emphasis on Value ETFs
Value stocks have proven to be outperformers over the long term and are less susceptible to trending markets. These stocks have strong fundamentals — earnings, dividends, book value and cash flow — that trade below their intrinsic value and are undervalued. These have the potential to deliver higher returns and exhibit lower volatility compared with their growth and blend counterparts (read: Why Value ETFs May Rule in Q2).
One of the Zacks ETF Rank #2 ETFs is Vanguard.
Overweight Dividend ETFs
The dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. This is especially true as these stocks offer the best of both these world’s — safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices. The companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.
While the dividend space has been crowded, ETFs with stocks having a strong history of dividend growth seem to be good picks. Vanguard Dividend Appreciation ETF has a Zacks ETF Rank #2 (read: Here's Why You Should Buy Dividend Growth ETFs Now).
Invest in Defensive ETFs
Investors could try out safer avenues and rotate into defensive sectors, like utilities, healthcare, and consumer staples, which generally outperform during periods of low growth and high uncertainty. Additionally, this is a much better option than holding cash. Guggenheim Defensive Equity ETF having a Zacks ETF Rank #2 could be an excellent choice. This fund offers equal-weight exposure to all the stocks in the index, resulting in a more balanced and diversified portfolio. It helps the portfolio to better weather periods of volatility, while remaining positioned to take advantage of market upswings.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com/
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.