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Sail Through Omicron-Induced Market Volatility With These ETFs
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Wall Street recovered from the omicron strain-related setback on Nov 29 to some extent. President Joe Biden’s assurances that if people undertake proper restrictions, new lockdown measures and travel-related restrictions might not have to be imposed, supported the market sentiments. The S&P 500 and the Nasdaq Composite indices were up 1.3% and 1.9%, respectively, on the day.
Meanwhile, the omicron strain of coronavirus has brought about a slowdown in the market momentum. Dow Jones Industrial Average index witnessed its weakest performance since October 2020 on Nov 26. Going on, Moderna (MRNA - Free Report) CEO Stephane Bancel’s comment to the Financial Times on Nov 29, claiming that he anticipates the existing COVID-19 vaccines to prove comparatively less effective against the new strain, has brought about a new wave of concerns (per a CNBC article).
Investors willing to sail through the current market turbulences from the latest COVID-19-variant-related concerns can consider iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , Invesco S&P 500 Low Volatility ETF (SPLV - Free Report) , iShares MSCI Global Min Vol Factor ETF (ACWV - Free Report) and Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) .
The variant was first detected in South Africa with numerous mutations (more than 30) to the spike protein (as stated in a CNBC article). The omicron variant has now been reported in the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong. Going on, the World Health Organization (WHO) has labeled the variant as a “variant of concern.” At least 70 countries and territories are believed to have put travel restrictions from several African countries to control the outbreak, per a CNN report.
The coronavirus outbreak is aggravating in some parts of Europe, largely due to the cold weather conditions. Various measures are being taken to curtail the spread, which might again impact the economic recovery achieved so far from the pandemic-led slump. For instance, a 30-day state of emergency has been declared along with several new restrictions in the Czech Republic. In fact, Austria has imposed at least a 10-day-long national lockdown to fight the resurgence. Considering the current situation, the WHO has issued a warning that Europe and Central Asia could witness another 700,000 COVID-19 deaths by Mar 1, 2022, per a Euronews article.
Weak U.S. consumer sentiment might also contribute to the market carnage. U.S. consumers have clearly remained worried about rising prices, as reflected by the surging inflation levels. The latest consumer sentiment readings for November look very disappointing as the metric has slipped to the lowest level in a decade compared to the previous month. The University of Michigan’s final consumer sentiment declined to 67.4 during November from 71.7 in October. Now, the rise in concerns related to the new variant can also dent consumer spending further and increase supply-chain disruptions.
Low-Volatility ETFs to the Rescue
Low-volatility products could be intriguing choices for those who want to continue investing in equities in the turbulent market conditions. Consider the following exciting options:
iShares MSCI USA Min Vol Factor ETF
iShares MSCI USA Min Vol Factor ETF offers exposure to 184 U.S. stocks with lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility (USD) Index. With AUM of $29.29 billion, iShares MSCI USA Min Vol Factor ETF charges 0.15% in expense ratio.
Invesco S&P 500 Low Volatility ETF
Invesco S&P 500 Low Volatility ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. The fund is based on the S&P 500 Low Volatility Index and holds 102 securities in its basket. Invesco S&P 500 Low Volatility ETF has AUM of $8.35 billion and charges an expense ratio of 25 basis points (bps) as stated in the prospectus (read: 5 ETFs That Gained Investors' Love Last Week).
iShares MSCI Global Min Vol Factor ETF
iShares MSCI Global Min Vol Factor ETF provides exposure to global stocks with potentially less risk. ACWV tracks the MSCI All Country World Minimum Volatility Index and holds 399 securities. iShares MSCI Global Min Vol Factor ETF has AUM of $5.38 billion and charges 20 bps in annual fees.
Invesco S&P 500 High Dividend Low Volatility ETF
Invesco S&P 500 High Dividend Low Volatility ETF seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500 Low Volatility High Dividend Index. It holds 52 securities. Invesco S&P 500 High Dividend Low Volatility ETF has AUM of $2.95 billion and charges 30 bps in annual fees (read: ETF Strategies to Play Rising U.S. Treasury Yields).
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Sail Through Omicron-Induced Market Volatility With These ETFs
Wall Street recovered from the omicron strain-related setback on Nov 29 to some extent. President Joe Biden’s assurances that if people undertake proper restrictions, new lockdown measures and travel-related restrictions might not have to be imposed, supported the market sentiments. The S&P 500 and the Nasdaq Composite indices were up 1.3% and 1.9%, respectively, on the day.
Meanwhile, the omicron strain of coronavirus has brought about a slowdown in the market momentum. Dow Jones Industrial Average index witnessed its weakest performance since October 2020 on Nov 26. Going on, Moderna (MRNA - Free Report) CEO Stephane Bancel’s comment to the Financial Times on Nov 29, claiming that he anticipates the existing COVID-19 vaccines to prove comparatively less effective against the new strain, has brought about a new wave of concerns (per a CNBC article).
Investors willing to sail through the current market turbulences from the latest COVID-19-variant-related concerns can consider iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , Invesco S&P 500 Low Volatility ETF (SPLV - Free Report) , iShares MSCI Global Min Vol Factor ETF (ACWV - Free Report) and Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) .
The variant was first detected in South Africa with numerous mutations (more than 30) to the spike protein (as stated in a CNBC article). The omicron variant has now been reported in the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong. Going on, the World Health Organization (WHO) has labeled the variant as a “variant of concern.” At least 70 countries and territories are believed to have put travel restrictions from several African countries to control the outbreak, per a CNN report.
The coronavirus outbreak is aggravating in some parts of Europe, largely due to the cold weather conditions. Various measures are being taken to curtail the spread, which might again impact the economic recovery achieved so far from the pandemic-led slump. For instance, a 30-day state of emergency has been declared along with several new restrictions in the Czech Republic. In fact, Austria has imposed at least a 10-day-long national lockdown to fight the resurgence. Considering the current situation, the WHO has issued a warning that Europe and Central Asia could witness another 700,000 COVID-19 deaths by Mar 1, 2022, per a Euronews article.
Weak U.S. consumer sentiment might also contribute to the market carnage. U.S. consumers have clearly remained worried about rising prices, as reflected by the surging inflation levels. The latest consumer sentiment readings for November look very disappointing as the metric has slipped to the lowest level in a decade compared to the previous month. The University of Michigan’s final consumer sentiment declined to 67.4 during November from 71.7 in October. Now, the rise in concerns related to the new variant can also dent consumer spending further and increase supply-chain disruptions.
Low-Volatility ETFs to the Rescue
Low-volatility products could be intriguing choices for those who want to continue investing in equities in the turbulent market conditions. Consider the following exciting options:
iShares MSCI USA Min Vol Factor ETF
iShares MSCI USA Min Vol Factor ETF offers exposure to 184 U.S. stocks with lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility (USD) Index. With AUM of $29.29 billion, iShares MSCI USA Min Vol Factor ETF charges 0.15% in expense ratio.
Invesco S&P 500 Low Volatility ETF
Invesco S&P 500 Low Volatility ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. The fund is based on the S&P 500 Low Volatility Index and holds 102 securities in its basket. Invesco S&P 500 Low Volatility ETF has AUM of $8.35 billion and charges an expense ratio of 25 basis points (bps) as stated in the prospectus (read: 5 ETFs That Gained Investors' Love Last Week).
iShares MSCI Global Min Vol Factor ETF
iShares MSCI Global Min Vol Factor ETF provides exposure to global stocks with potentially less risk. ACWV tracks the MSCI All Country World Minimum Volatility Index and holds 399 securities. iShares MSCI Global Min Vol Factor ETF has AUM of $5.38 billion and charges 20 bps in annual fees.
Invesco S&P 500 High Dividend Low Volatility ETF
Invesco S&P 500 High Dividend Low Volatility ETF seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500 Low Volatility High Dividend Index. It holds 52 securities. Invesco S&P 500 High Dividend Low Volatility ETF has AUM of $2.95 billion and charges 30 bps in annual fees (read: ETF Strategies to Play Rising U.S. Treasury Yields).