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5 ETFs in Green Despite the Coronavirus-Driven Sell-Off
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COVID-19 has been hurting economy worldwide, leading to bloodbath across the global market. In fact, the outbreak has ended the longest ever 11-year bull market and sent the stocks into a deep bear territory.
This is because the outbreak has turned into a worldwide pandemic with the number of coronavirus cases climbing above 236,000 globally and disrupting international commerce. This, in turn, will hurt global growth and corporate earnings. According to analysis by The Independent, one of the main U.S. equity market indexes has fallen even more rapidly than during the Wall Street Crash of 1929 in the past month (read: Coronavirus Hits Feb Retail Sales: Winning & Losing ETFs).
Even a slew of stimulus measures by the government and the central banks globally failed to revive investors’ confidence in the economy and the stock market. Though almost every sector the market has declined sharply, there are few ETFs that have held their ground amid the turmoil over the past month. These funds do not purely seek investment in equities but follow some kind of strategies. We have highlighted some of them below:
AdvisorShares Dorsey Wright Short ETF (DWSH - Free Report) – Up 66.3%
This is an actively managed ETF that short sells U.S. large-cap securities with the highest relative weakness within an investment universe primarily, comprising large-capitalization U.S.-traded equities. It holds 100 stocks in its basket and charges higher annual fee of 3.07%. The product trades in lower average daily volume of 90,000 shares and has accumulated $124.7 million in its asset base (read: Don't Fear the Bear: 5 ETFs to Bet on).
This actively managed fund seeks to deliver positive returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns. It tries to follow the S&P 500 Dynamic VEQTOR Index, which provides broad equity market exposure with an implied volatility hedge by dynamically allocating between different asset classes: equity, volatility and cash. The S&P 500 Total Return Index represents the equity component while the S&P 500 VIX Short-Term Futures Index represents the volatility component of the index. The non-equity (volatility + cash) portion makes up for one-fourth of the portfolio while the rest goes to equity. The fund has accumulated $21.9 million in its asset base and charges 39 bps in fees per year from investors. Volume is light, exchanging 7,000 shares a day on average (read: Long-Short ETF Hits New 52-Week High).
Barclays ETN+ S&P VEQTOR ETN – Up 10.4%
This is an ETN option tracking the S&P 500 Dynamic VEQTOR Index. VQT uses volatility futures contracts directly to hedge volatility. It increases allocation to the equity component as measured by the S&P 500 Total Return Index in times of low volatility. It increases volatility exposure as measured by the S&P 500 VIX Futures Total Return index and allocates entirely into cash if the index slumps 2% or more in the preceding five days. In this manner, the note manages to keep a check on volatility. The product has amassed $12.2 million in AUM and charges 95 bps in annual fees. The ETN sees paltry average daily volume of 500 shares.
This actively managed ETF aims to produce capital gains while reducing risk exposure across market conditions. It invests primarily in U.S. equities, specifically focusing on high-quality companies across all industries and sectors that have prospects for long-term total returns as a result of their ability to grow earnings and willingness to increase dividends over time. The ETF holds 47 securities in its basket and charges a high expense ratio of 1.23%. CCOR has accumulated $121.5 million in its asset base and trades in paltry volume of 21,000 shares.
Eaton Vance Stock NextShares – Up 1.2%
This is an actively managed ETF that seeks long-term capital appreciation by investing in a diversified portfolio of equity securities. With AUM of $4.9 million, it holds 61 stocks in its basket with none making up for more than 5.1% share. The fund charges 65 bps in annual fees from investors and trades in meager volume of under 500 shares.
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5 ETFs in Green Despite the Coronavirus-Driven Sell-Off
COVID-19 has been hurting economy worldwide, leading to bloodbath across the global market. In fact, the outbreak has ended the longest ever 11-year bull market and sent the stocks into a deep bear territory.
This is because the outbreak has turned into a worldwide pandemic with the number of coronavirus cases climbing above 236,000 globally and disrupting international commerce. This, in turn, will hurt global growth and corporate earnings. According to analysis by The Independent, one of the main U.S. equity market indexes has fallen even more rapidly than during the Wall Street Crash of 1929 in the past month (read: Coronavirus Hits Feb Retail Sales: Winning & Losing ETFs).
Even a slew of stimulus measures by the government and the central banks globally failed to revive investors’ confidence in the economy and the stock market. Though almost every sector the market has declined sharply, there are few ETFs that have held their ground amid the turmoil over the past month. These funds do not purely seek investment in equities but follow some kind of strategies. We have highlighted some of them below:
AdvisorShares Dorsey Wright Short ETF (DWSH - Free Report) – Up 66.3%
This is an actively managed ETF that short sells U.S. large-cap securities with the highest relative weakness within an investment universe primarily, comprising large-capitalization U.S.-traded equities. It holds 100 stocks in its basket and charges higher annual fee of 3.07%. The product trades in lower average daily volume of 90,000 shares and has accumulated $124.7 million in its asset base (read: Don't Fear the Bear: 5 ETFs to Bet on).
Invesco S&P 500 Downside Hedged ETF (PHDG - Free Report) – Up 12.6%
This actively managed fund seeks to deliver positive returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns. It tries to follow the S&P 500 Dynamic VEQTOR Index, which provides broad equity market exposure with an implied volatility hedge by dynamically allocating between different asset classes: equity, volatility and cash. The S&P 500 Total Return Index represents the equity component while the S&P 500 VIX Short-Term Futures Index represents the volatility component of the index. The non-equity (volatility + cash) portion makes up for one-fourth of the portfolio while the rest goes to equity. The fund has accumulated $21.9 million in its asset base and charges 39 bps in fees per year from investors. Volume is light, exchanging 7,000 shares a day on average (read: Long-Short ETF Hits New 52-Week High).
Barclays ETN+ S&P VEQTOR ETN – Up 10.4%
This is an ETN option tracking the S&P 500 Dynamic VEQTOR Index. VQT uses volatility futures contracts directly to hedge volatility. It increases allocation to the equity component as measured by the S&P 500 Total Return Index in times of low volatility. It increases volatility exposure as measured by the S&P 500 VIX Futures Total Return index and allocates entirely into cash if the index slumps 2% or more in the preceding five days. In this manner, the note manages to keep a check on volatility. The product has amassed $12.2 million in AUM and charges 95 bps in annual fees. The ETN sees paltry average daily volume of 500 shares.
The Core Alternative ETF (CCOR - Free Report) – Up 1.8%
This actively managed ETF aims to produce capital gains while reducing risk exposure across market conditions. It invests primarily in U.S. equities, specifically focusing on high-quality companies across all industries and sectors that have prospects for long-term total returns as a result of their ability to grow earnings and willingness to increase dividends over time. The ETF holds 47 securities in its basket and charges a high expense ratio of 1.23%. CCOR has accumulated $121.5 million in its asset base and trades in paltry volume of 21,000 shares.
Eaton Vance Stock NextShares – Up 1.2%
This is an actively managed ETF that seeks long-term capital appreciation by investing in a diversified portfolio of equity securities. With AUM of $4.9 million, it holds 61 stocks in its basket with none making up for more than 5.1% share. The fund charges 65 bps in annual fees from investors and trades in meager volume of under 500 shares.
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