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ETF Strategies for August as Coronavirus Outbreak Worsens

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The coronavirus outbreak is aggravating globally as the number of cases has crossed the grim mark of 19 million, according to Johns Hopkins University. The condition in the United States also doesn’t look good as the total number of cases have crossed 4.8 million with at least 160,000 deaths, per a CNN report. Globally, total number of coronavirus cases in India has surpassed 2 million with Africa seeing more than 1 million infections, going by a CNN report. The scenario in Latin America also looks troubling as the number of coronavirus cases continue to rise.

Meanwhile, per a CNN report, a major coronavirus model is now forecasting the death toll of nearly 300,000 by Dec 1 in the United States. However, the numbers can improve if the public adheres to wearing masks strictly. Meanwhile, the rising number of coronavirus cases in the United States hurt consumer confidence in July due to worries about job prospects and business conditions. Also, the U.S. economy’s second-quarter GDP’s most devastating plunge of 32.9% on an annualized basis, according to the Commerce Department’s first reading of the data, dented investors’ optimism (going by a CNBC article).

Investors are worrying that another round of business restrictions and lockdown measures might derail the economic recovery achieved so far. In such a scenario, investors can take a look at the following ETF strategies to combat the coronavirus crisis:

Dividend ETFs to Take Shelter in

In a low-interest rate environment, dividend investing becomes a hot spot. Against this backdrop, dividend ETFs like WisdomTree U.S. Quality Dividend Growth Fund (DGRW - Free Report) , FlexShares Quality Dividend Defensive Index Fund (QDEF - Free Report) , WBI Power Factor High Dividend ETF (WBIY) and Schwab US Dividend Equity ETF (SCHD) might be compelling picks (read: A Quick Guide to Dividend Aristocrat ETFs).

Mid-Cap ETFs Looking Good

In the current scenario, where the market is behaving in a highly unpredictable manner, a mid-cap investment strategy can come in handy. Investment in mid-cap funds is often recognized as a good portfolio diversification strategy. These funds combine attractive attributes of both small and large-cap ETFs. While large companies are normally known for stability and the smaller ones for growth, mid-caps offer the best of both worlds. As such, investors seeking to capitalize on the strong fundamentals but worried about uncertainty should consider mid-cap ETFs like Vanguard Mid-Cap ETF (VO - Free Report) , SPDR S&P MIDCAP 400 ETF Trust (MDY - Free Report) , iShares Russell Mid-Cap Value ETF (IWS - Free Report) , Vanguard Mid-Cap Growth ETF (VOT) and Schwab U.S. Mid-Cap ETF (SCHM) (read: Here's Why Mid-Cap ETFs Could Make for a Safer Bet Now).

Gold ETFs: Popular Safe-Haven Asset Touching New Highs

The year 2020, majorly dominated by the coronavirus pandemic and geopolitical tensions, has been quite promising for safe-haven assets like gold. On track for the best year since 1979, spot gold prices have witnessed an increase of more than 32% so far this year, going by a CNBC article. Yellow metal prices have once again hit a new high, steering past $2,000 an ounce. The upside is being largely supported by a weaker dollar and declining bond yields. Gold ETFs mostly move in tandem with gold prices. The SPDR Gold Shares (GLD - Free Report) , iShares Gold Trust (IAU - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report)   and GraniteShares Gold Trust (BAR) are some of the popular ETFs (read: Silver ETFs or Gold: Which Metal to Shine More Ahead?).

Bet on Low-Volatility ETFs

Demand for funds with “low volatility” or “minimum volatility” generally increases during tumultuous times. These seemingly-safe products usually do not surge in bull market conditions but offer protection against unpredictable ones. Providing more stable cash flow than the overall market, these funds are less cyclical in nature. Here are some options --  iShares Edge MSCI Min Vol USA ETF (USMV - Free Report) , Invesco S&P 500 Low Volatility ETF (SPLV - Free Report) , iShares Edge MSCI EAFE Minimum Volatility ETF (EFAV), iShares Edge MSCI Min Vol Global ETF (ACWV ), Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) (read: 10 Power-Packed ETFs to Buy for Second-Half 2020).

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