The global stock market is stuck in a vicious circle of trading triggered by the tech rout, lofty valuation, lack of further monetary stimulus, the upcoming U.S. election, new restrictions spurred by rising coronavirus cases and concerns over global growth (read:
4 Sector ETFs to Benefit From 3-Year Lower Rates). The COVID-19 infections have been growing globally with new lockdown measures in Spain and other European countries, including Denmark, Greece and Spain. There have been talks of lockdown in London as well. Additionally, the latest report showing money-laundering allegations over HSBC Holdings, led to a bloodbath in the market. HSBC slumped to 25-year low. A report from China's state-run Global Times suggested that HSBC could be a possible candidate for inclusion in the country's “unreliable entity list” that targets foreign firms, which violate Chinese laws or commit illegal acts. The U.S. political battle between Republicans and Democrats over who will be the next Supreme Court justice is also weighing on sentiments. The combination of developments has resulted in higher demand for safe haven avenues or lower-risk securities. Below we have highlighted five such zones and their popular ETFs wherein investors could stash their money amid the market turmoil. Gold - SPDR Gold Trust ETF ( GLD Quick Quote GLD - Free Report) Gold is often viewed as a store of value and hedge against market turmoil. The product tracking this bullion like GLD could be an interesting pick in the current market turbulence. The fund tracks the price of gold bullion measured in U.S. dollars, and is kept in London under the custody of HSBC Bank USA. It is the ultra-popular gold ETF with AUM of $79 billion and heavy volume of nearly 15 million shares a day. It charges 40 bps in fees per year from investors. The product has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Gold ETFs to Get Back Their Glitter As Volatility Flares Up?). Long-Dated Treasury - iShares 20+ Year Treasury Bond ETF ( TLT Quick Quote TLT - Free Report) The products tracking the long end of the yield curve often provide a safe haven. TLT provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. It is one of the most popular and liquid ETFs in the bond space with AUM of $17.2 billion and average daily volume of 9.2 million shares. Expense ratio comes in at 0.15%. The fund has a Zacks ETF Rank #3 with a High risk outlook. Low Volatility - iShares MSCI Global Min Vol Factor ETF ( ACWV Quick Quote ACWV - Free Report) These products have the potential to outpace the broader market, 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, ACWV, with AUM of $5.9 billion and average daily volume of 318,000 shares, offers exposure to global stocks with potentially less risk. The fund charges 20 bps in annual fees (read: Here's Why it Makes Sense to Invest in Low-Volatility ETFs Now). Dividend - Global X SuperDividend ETF ( SDIV Quick Quote SDIV - Free Report) 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 worlds — safety in the form of payouts and stability in the form of mature companies that are less volatile to large swings in stock prices. The companies that offer 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, high-yield dividend ETFs like SDIV seem good picks amid the backdrop of a low-rate environment and market volatility. The ETF has AUM of $646.9 million and trades in volume of 379,000 shares a day on average. It charges 59 bps in annual fees and has a Zacks ETF Rank #3 with a Low risk outlook (read: 5 High-Yield Dividend ETFs & Stocks to Buy Now). 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 >>