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Wall Street on Track for Worst 1H: 4 Top-Ranked ETFs Win
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Wall Street is about to post its worst first half in 50 years, thanks to persistently high inflation and an economic downturn caused by a hawkish Fed. Russia’s invasion of Ukraine added to the chaos. Notably, the S&P 500 is down nearly 18% this year — the worst since 1970 — as tracked by Dow Jones Market Data Group.
While there have been losers in many corners of the space, we highlight five ETFs from different industries that have gained in the first half of the year. These have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). The funds are, namely, Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) , Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) , Morningstar Dividend Leaders Index Fund (FDL - Free Report) , and VanEck Vectors Pharmaceutical ETF (PPH - Free Report) . These are likely to continue outperforming should the trends prevail.
With inflation soaring to a four-decade high, the Fed raised interest rates by 75 bps in its latest FOMC meeting — the biggest interest-rate increase since 1994 — and signaled continued tightening ahead, which could further weigh on stocks. This is because an increase in interest rates means higher loan rates for consumers and businesses, including mortgages, credit cards and auto loans that will likely cut consumer spending, thereby hurting economic growth. The central bank is on pace to hike rates again in July by another 75 basis points, as tracked by the CME's Fed Watch Tool.
Additionally, the latest rounds of data suggest a slowdown in economic activity in the key sectors. Mortgage rates reached their highest level in more than 13 years, while retail sales registered a bigger-than-expected drop in May as record gasoline prices prompted households to cut back on spending (read: 5 Undervalued ETFs to Buy for Second Half 2022).
Further, as the global economy is struggling with skyrocketing inflation and low growth, the World Bank has warned of a recession.
We have profiled the above-mentioned ETFs in detail below:
Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) – Up 43.1%
Invesco Dynamic Energy Exploration & Production ETF follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies involved in the exploration and production of natural resources used to produce energy based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value (read: Top ETF Stories of First-Half 2022 (revised)).
Holding 32 stocks in its basket, Invesco Dynamic Energy Exploration & Production ETF has amassed $297.5 million in its asset base and charges 63 bps in annual fees. It has a Zacks ETF Rank #1 with a High risk outlook.
Invesco KBW Property & Casualty Insurance ETF provides exposure to the 25 leading national money centers and regional banks or thrifts. It follows the KBW Nasdaq Property & Casualty Index. Invesco KBW Property & Casualty Insurance ETF is concentrated on the top five firms that make up for more than 7% share each.
Invesco KBW Property & Casualty Insurance ETF has managed $140.5 million in its asset base and expense ratio of 0.35%. KBWP has a Zacks ETF Rank #2 with a Medium risk outlook.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report) – Up 2.3%
First Trust Morningstar Dividend Leaders Index Fund offers exposure to stocks that have shown the highest dividend consistency and sustainability by tracking the Morningstar Dividend Leaders Index. It holds 100 stocks in its basket with key holdings in financials, energy, consumer staples, healthcare and information technology (read: ETF Areas Defying the Bear Market This Year: Can They Rally?).
With AUM of $2.9 billion, First Trust Morningstar Dividend Leaders Index Fund charges 45 bps in annual fees from investors and has a Zacks ETF Rank #2 with a Medium risk outlook.
VanEck Vectors Pharmaceutical ETF offers exposure to the companies involved in pharmaceuticals, including pharmaceutical research and development as well as production, marketing and sales of pharmaceuticals. It follows the MVIS US Listed Pharmaceutical 25 Index and holds 25 stocks in its basket.
The product has amassed $545.9 million in its asset base and has expense ratio of 0.35%. VanEck Vectors Pharmaceutical ETF carries a Zacks ETF Rank #2 with a Medium risk outlook.
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Wall Street on Track for Worst 1H: 4 Top-Ranked ETFs Win
Wall Street is about to post its worst first half in 50 years, thanks to persistently high inflation and an economic downturn caused by a hawkish Fed. Russia’s invasion of Ukraine added to the chaos. Notably, the S&P 500 is down nearly 18% this year — the worst since 1970 — as tracked by Dow Jones Market Data Group.
While there have been losers in many corners of the space, we highlight five ETFs from different industries that have gained in the first half of the year. These have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). The funds are, namely, Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) , Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) , Morningstar Dividend Leaders Index Fund (FDL - Free Report) , and VanEck Vectors Pharmaceutical ETF (PPH - Free Report) . These are likely to continue outperforming should the trends prevail.
With inflation soaring to a four-decade high, the Fed raised interest rates by 75 bps in its latest FOMC meeting — the biggest interest-rate increase since 1994 — and signaled continued tightening ahead, which could further weigh on stocks. This is because an increase in interest rates means higher loan rates for consumers and businesses, including mortgages, credit cards and auto loans that will likely cut consumer spending, thereby hurting economic growth. The central bank is on pace to hike rates again in July by another 75 basis points, as tracked by the CME's Fed Watch Tool.
Additionally, the latest rounds of data suggest a slowdown in economic activity in the key sectors. Mortgage rates reached their highest level in more than 13 years, while retail sales registered a bigger-than-expected drop in May as record gasoline prices prompted households to cut back on spending (read: 5 Undervalued ETFs to Buy for Second Half 2022).
Further, as the global economy is struggling with skyrocketing inflation and low growth, the World Bank has warned of a recession.
We have profiled the above-mentioned ETFs in detail below:
Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) – Up 43.1%
Invesco Dynamic Energy Exploration & Production ETF follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies involved in the exploration and production of natural resources used to produce energy based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value (read: Top ETF Stories of First-Half 2022 (revised)).
Holding 32 stocks in its basket, Invesco Dynamic Energy Exploration & Production ETF has amassed $297.5 million in its asset base and charges 63 bps in annual fees. It has a Zacks ETF Rank #1 with a High risk outlook.
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) – Up 2.3%
Invesco KBW Property & Casualty Insurance ETF provides exposure to the 25 leading national money centers and regional banks or thrifts. It follows the KBW Nasdaq Property & Casualty Index. Invesco KBW Property & Casualty Insurance ETF is concentrated on the top five firms that make up for more than 7% share each.
Invesco KBW Property & Casualty Insurance ETF has managed $140.5 million in its asset base and expense ratio of 0.35%. KBWP has a Zacks ETF Rank #2 with a Medium risk outlook.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report) – Up 2.3%
First Trust Morningstar Dividend Leaders Index Fund offers exposure to stocks that have shown the highest dividend consistency and sustainability by tracking the Morningstar Dividend Leaders Index. It holds 100 stocks in its basket with key holdings in financials, energy, consumer staples, healthcare and information technology (read: ETF Areas Defying the Bear Market This Year: Can They Rally?).
With AUM of $2.9 billion, First Trust Morningstar Dividend Leaders Index Fund charges 45 bps in annual fees from investors and has a Zacks ETF Rank #2 with a Medium risk outlook.
VanEck Vectors Pharmaceutical ETF (PPH - Free Report) – Up 0.6%
VanEck Vectors Pharmaceutical ETF offers exposure to the companies involved in pharmaceuticals, including pharmaceutical research and development as well as production, marketing and sales of pharmaceuticals. It follows the MVIS US Listed Pharmaceutical 25 Index and holds 25 stocks in its basket.
The product has amassed $545.9 million in its asset base and has expense ratio of 0.35%. VanEck Vectors Pharmaceutical ETF carries a Zacks ETF Rank #2 with a Medium risk outlook.