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Low-Volatility ETFs to Pick on Trump's Impeachment Talks

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A sudden effort has been noticed by Democrats in favor of impeachment of U.S. President Donald Trump. Speaker Nancy Pelosi recently said that the U.S. House of Representatives will launch a formal impeachment inquiry into President Donald Trump.

The announcement followed reports that Trump may have abused his presidential powers and “sought help from a foreign government to undermine former Vice President Joe Biden, the current Democratic frontrunner, and help his own reelection.”

Certain economic factors might also disturb market momentum. September saw the maximum drop in U.S. consumer confidence in nine months. The Conference Board said its index of consumer sentiment fell to 125.1 from a downwardly revised 134.2 the month before. The reading lagged market estimate of 133.5.

The prior month’s reading was also revised to 134.2 from 135.1. Same was the case pertaining to the expectations index — which is formed on the basis of consumers’ short-term outlook for income, business and labor market conditions. The index fell to 95.8 in September from 106.4 last month.

Meanwhile, trade tensions ebb and flow. A recent speech by Trump in the United Nations General Assembly urges nations to opt for nationalism and reject globalism. Trump also issued a message to China that he will not conform to any “bad deal” pertaining to trade negotiations.

Such a harsh rhetoric came at a moment when markets were hopeful about the upcoming meeting of U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer with Chinese Vice Premier Liu He over trade (read: ETFs in Focus as Deputy-Level U.S.-China Trade Talks Begin).

Meanwhile, the British pound strengthened as chances of a no-deal Brexit waned after the U.K. Supreme Court ruled Prime Minister Boris Johnson’s decision to suspend parliament unlawful (read: ETFs in Focus as a No-Deal Brexit May be in the Cards).

These factors are likely keep the broader market edgy in the near and may open doors for low-volatility ETF investing.

ETF Picks

Franklin Liberty U.S. Low Volatility ETF (FLLV - Free Report)

The actively-managed fund seeks capital appreciation with an emphasis on lower volatility than the broader equity market, as measured by the Russell 1000 Index. No stock accounts for more than 1.47% of the portfolio. Technology, healthcare, financials and consumer discretionary have a double-digit weight in the fund. It charges 50 bps.

SPDR SSGA US Large Cap Low Volatility Index ETF (LGLV - Free Report)

The underlying index of the fund is designed to track the performance of U.S. large capitalization companies that exhibit low volatility. No stock makes up about 1.87% of the portfolio. Financials, technology and industrials have a double-digit weight in the fund. The fund charges 12 bps in fees.

Invesco S&P 500 Low Volatility ETF (SPLV - Free Report)

The underlying S&P 500 Low Volatility Index consists of 100 stocks from the S&P 500 Index with the lowest-realized volatility over the past 12 months. Utilities, financials and real estate have a double-digit weight in the fund. No stock makes up about 1.23% of the fund, which charges 25 bps in fees.

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