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Wall Street seems to be grappling with the rising 10-year Treasury yields, the Russia-Ukraine war crisis and the resurging COVID-19 cases in China that have led to a lockdown in its financial hub Shanghai.
According to the latest updates, Gazprom is halting gas supplies to Poland and Bulgaria as they have denied paying for the gas in rubles, not meeting Moscow’s latest demands (per a CNBC article). This is leading to a surge in European gas prices, pulling the euro lower. The move has come at a time when tensions between Russia and the Western allies are at a high because of the ongoing war.
Investors are also on edge as the threat of a nuclear attack seems real. Kremlin has itself been stressing on the significant risk posing the usage of the highly fatal nuclear weapons in the attack. The U.S. Defense Secretary Lloyd Austin has retaliated to the nuclear war threats by stating it to be “very dangerous and unhelpful,” according to a CNBC article.
Fed Chairman Jerome Powell has indicated aggressive rate hikes next month. In this regard, Powell mentioned at the International Monetary Fund Debate on the Global Economy that it will be “appropriate in my view to be moving a little more quickly,” as stated in a CNBC article. He also mentioned that “I also think there is something to be said for front-end loading any accommodation one thinks is appropriate. ... I would say 50 basis points will be on the table for the May meeting.”
Moreover, resurging COVID-19 cases in China have led to a lockdown in Shanghai, in keeping with China’s zero-COVID policy. The city has witnessed more than 500,000 infections since the beginning of March 2022 (per a CNN article). The resurging cases and lockdown measures have reinstated fears of a pandemic-induced global economic slowdown and renewed supply-chain disturbances.
Considering the current investing environment, let’s take a glance at some top-ranked ETFs that investors can consider in April:
The healthcare sector is a good defensive investment option as several investors believe consumers will have to purchase healthcare products even during tough and uncertain times. Currently, the Russia-Ukraine war crisis and the chances of a Fed rate hike are causing uncertainty in the markets. The pandemic has also triggered a race to introduce vaccines, tests and treatment options, opening up investment opportunities in the healthcare sector.
The iShares U.S. Healthcare ETF seeks to track the investment results of an index composed of U.S. equities in the healthcare sector. With AUM of $2.86 billion, IYH charges 41 basis points (bps) in fees. The iShares U.S. Healthcare ETF also sports a Zacks ETF Rack #1 (Strong Buy), with a Medium-risk outlook (read: Healthcare ETFs in Focus Ahead of Q1 Earnings).
The Financial Select Sector SPDR Fund (XLF - Free Report)
The shift toward a tighter monetary policy will push yields higher, thereby helping the financial sector. This is because rising rates will help in boosting profits for banks, insurance companies, discount brokerage firms and asset managers. The steepening of the yield curve (the difference between short and long-term interest rates) is likely to support banks’ net interest margins. As a result, net interest income, which constitutes a chunk of banks’ revenues, is likely to receive support from the steepening of the yield curve and a modest rise in loan demand. Notably, as the economy starts operating in full swing, the banking space will be able to generate more business.
The Financial Select Sector SPDR Fund seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Financial Select Sector Index. XLF has AUM of $37.65 billion and charges 10 bps of fees. XLF sports a Zacks Rank #1 and a Medium-risk outlook (read: Why Value ETFs May Outdo Growth for the Rest of 2022).
Value investing is looking to be more appealing, given the rebounding U.S. economy, the expectation of higher inflation and the Fed’s aggressive stance on interest rate hikes. Moreover, value stocks seek to capitalize on market inefficiencies. They can deliver higher returns with lower volatility than their growth and blend counterparts. Additionally, value stocks are less exposed to the trending markets and their dividend payouts offer a shield against the market turbulence.
Invesco S&P 500 Enhanced Value ETF is based on the S&P 500 Enhanced Value Index. With AUM of $178.9 million, SPVU charges 13 bps as expense ratio. SPVU carries a Zacks Rank #1, with a Medium-risk outlook.
WisdomTree U.S. Quality Dividend Growth Fund (DGRW - Free Report)
Dividend aristocrats are blue-chip dividend-paying companies with a long track record of increasing dividend payments year over year. Moreover, dividend aristocrat funds give investors dividend growth opportunities compared to other products in the space but might not necessarily have the highest yields. ‘Dividend aristocrats’ or ‘dividend growers’ are mostly deemed the smartest way to deal with market turmoil. The inclination toward dividend investing is rising because of easing monetary policy on the global front and the market uncertainty triggered by the pandemic and deceleration in global growth. Demand for these funds is mainly driven by their characteristic of being the major source of consistent income for investors when returns from the equity markets are uncertain.
WisdomTree U.S. Quality Dividend Growth ETF seeks to track the investment results of dividend-paying large-cap companies with growth characteristics in the U.S. equity market. It holds 299 securities in the basket and charges 28 bps in annual fees. The product has AUM of $6.85 billion and sports a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook (read: Guide to Dividend Aristocrat ETFs).
Cloud computingand storage are expected to stay in vogue in 2022. The space has received quite a push amid the coronavirus outbreak, with a vast population working from home across the globe. Even amid the accelerated coronavirus vaccine rollout globally, demand for cloud computing is set to stay robust even after the pandemic.
It is worth knowing here that cloud computing and storage have found applications in social networking, messaging apps and streaming services. It has empowered video conferencing, gaming, e-commerce shopping, remote project collaboration, online classes, editing, etc. Cloud computing is also supporting organizations in remotely processing a lot of information, and developing and running key applications and services.
Global X Cloud Computing ETF provides exposure to 34 securities and seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Cloud Computing Index.The product managed assets worth $798.1 million and charges 68 bps of annual fees and expenses. CLOU currently carries a Zacks ETF Rank #2.
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5 Top-Ranked ETFs That Can be Great Bets Now
Wall Street seems to be grappling with the rising 10-year Treasury yields, the Russia-Ukraine war crisis and the resurging COVID-19 cases in China that have led to a lockdown in its financial hub Shanghai.
According to the latest updates, Gazprom is halting gas supplies to Poland and Bulgaria as they have denied paying for the gas in rubles, not meeting Moscow’s latest demands (per a CNBC article). This is leading to a surge in European gas prices, pulling the euro lower. The move has come at a time when tensions between Russia and the Western allies are at a high because of the ongoing war.
Investors are also on edge as the threat of a nuclear attack seems real. Kremlin has itself been stressing on the significant risk posing the usage of the highly fatal nuclear weapons in the attack. The U.S. Defense Secretary Lloyd Austin has retaliated to the nuclear war threats by stating it to be “very dangerous and unhelpful,” according to a CNBC article.
Fed Chairman Jerome Powell has indicated aggressive rate hikes next month. In this regard, Powell mentioned at the International Monetary Fund Debate on the Global Economy that it will be “appropriate in my view to be moving a little more quickly,” as stated in a CNBC article. He also mentioned that “I also think there is something to be said for front-end loading any accommodation one thinks is appropriate. ... I would say 50 basis points will be on the table for the May meeting.”
Moreover, resurging COVID-19 cases in China have led to a lockdown in Shanghai, in keeping with China’s zero-COVID policy. The city has witnessed more than 500,000 infections since the beginning of March 2022 (per a CNN article). The resurging cases and lockdown measures have reinstated fears of a pandemic-induced global economic slowdown and renewed supply-chain disturbances.
Considering the current investing environment, let’s take a glance at some top-ranked ETFs that investors can consider in April:
iShares U.S. Healthcare ETF (IYH - Free Report)
The healthcare sector is a good defensive investment option as several investors believe consumers will have to purchase healthcare products even during tough and uncertain times. Currently, the Russia-Ukraine war crisis and the chances of a Fed rate hike are causing uncertainty in the markets. The pandemic has also triggered a race to introduce vaccines, tests and treatment options, opening up investment opportunities in the healthcare sector.
The iShares U.S. Healthcare ETF seeks to track the investment results of an index composed of U.S. equities in the healthcare sector. With AUM of $2.86 billion, IYH charges 41 basis points (bps) in fees. The iShares U.S. Healthcare ETF also sports a Zacks ETF Rack #1 (Strong Buy), with a Medium-risk outlook (read: Healthcare ETFs in Focus Ahead of Q1 Earnings).
The Financial Select Sector SPDR Fund (XLF - Free Report)
The shift toward a tighter monetary policy will push yields higher, thereby helping the financial sector. This is because rising rates will help in boosting profits for banks, insurance companies, discount brokerage firms and asset managers. The steepening of the yield curve (the difference between short and long-term interest rates) is likely to support banks’ net interest margins. As a result, net interest income, which constitutes a chunk of banks’ revenues, is likely to receive support from the steepening of the yield curve and a modest rise in loan demand. Notably, as the economy starts operating in full swing, the banking space will be able to generate more business.
The Financial Select Sector SPDR Fund seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Financial Select Sector Index. XLF has AUM of $37.65 billion and charges 10 bps of fees. XLF sports a Zacks Rank #1 and a Medium-risk outlook (read: Why Value ETFs May Outdo Growth for the Rest of 2022).
Invesco S&P 500 Enhanced Value ETF (SPVU - Free Report)
Value investing is looking to be more appealing, given the rebounding U.S. economy, the expectation of higher inflation and the Fed’s aggressive stance on interest rate hikes. Moreover, value stocks seek to capitalize on market inefficiencies. They can deliver higher returns with lower volatility than their growth and blend counterparts. Additionally, value stocks are less exposed to the trending markets and their dividend payouts offer a shield against the market turbulence.
Invesco S&P 500 Enhanced Value ETF is based on the S&P 500 Enhanced Value Index. With AUM of $178.9 million, SPVU charges 13 bps as expense ratio. SPVU carries a Zacks Rank #1, with a Medium-risk outlook.
WisdomTree U.S. Quality Dividend Growth Fund (DGRW - Free Report)
Dividend aristocrats are blue-chip dividend-paying companies with a long track record of increasing dividend payments year over year. Moreover, dividend aristocrat funds give investors dividend growth opportunities compared to other products in the space but might not necessarily have the highest yields. ‘Dividend aristocrats’ or ‘dividend growers’ are mostly deemed the smartest way to deal with market turmoil. The inclination toward dividend investing is rising because of easing monetary policy on the global front and the market uncertainty triggered by the pandemic and deceleration in global growth. Demand for these funds is mainly driven by their characteristic of being the major source of consistent income for investors when returns from the equity markets are uncertain.
WisdomTree U.S. Quality Dividend Growth ETF seeks to track the investment results of dividend-paying large-cap companies with growth characteristics in the U.S. equity market. It holds 299 securities in the basket and charges 28 bps in annual fees. The product has AUM of $6.85 billion and sports a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook (read: Guide to Dividend Aristocrat ETFs).
Global X Cloud Computing ETF (CLOU - Free Report)
Cloud computingand storage are expected to stay in vogue in 2022. The space has received quite a push amid the coronavirus outbreak, with a vast population working from home across the globe. Even amid the accelerated coronavirus vaccine rollout globally, demand for cloud computing is set to stay robust even after the pandemic.
It is worth knowing here that cloud computing and storage have found applications in social networking, messaging apps and streaming services. It has empowered video conferencing, gaming, e-commerce shopping, remote project collaboration, online classes, editing, etc. Cloud computing is also supporting organizations in remotely processing a lot of information, and developing and running key applications and services.
Global X Cloud Computing ETF provides exposure to 34 securities and seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Cloud Computing Index.The product managed assets worth $798.1 million and charges 68 bps of annual fees and expenses. CLOU currently carries a Zacks ETF Rank #2.