We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Wall Street has entered March on a shaky note as markets have not digested rising rate worries yet. Inflation is running hot in developed economies and may creep higher due to rising energy prices. Fed Governor Christopher J. Waller recently adopted a hawkish tone in his comments, raising the likelihood of a higher terminal rate if inflation numbers don’t subside.
However, Atlanta Fed President Raphael Bostic said he thinks the central bank can keep its interest rate hikes to 25 basis points rather than the half-point increase backed by some other officials, as quoted on CNBC.
The 10-year U.S. benchmark treasury yield started the month at 4.01%, reached 4.08% on Mar 2 and then dropped to 3.97% on Mar 3. Against this backdrop, below, we highlight a few ETFs that could be tapped in March.
Supply-chain disruptions and high energy prices are boosting inflation globally. The Federal Reserve's preferred inflation measure increased in January at its fastest clip since June, an ominous sign that price pressures remain deep rooted in the U.S. economy and could lead the Fed to further interest rate hikes well into this year. So, one can play IWIN (read: PCE Inflation Jumps the Most Since June: 5 ETFs to Play).
IWIN is an actively managed ETF, investing in asset classes that look to benefit, either directly or indirectly, from inflation. IWIN intends to provide investors with long-term capital appreciation in inflation-adjusted terms. The portfolio includes an active mix of asset miners, commodities, land development, homebuilders, commodity REITs and real estate technology. The expense ratio of IWIN is 0.85%.
The Fed is highly likely to hike rates in mid-March. Sky-high inflation emanating from labor shortage, supply-chain disruptions, as well as higher crude prices, should make Fed members comfortable with several rate hikes in the coming days.
The fund LVHD serves the situation better as it offers low volatility as well dividend exposure. The fund, which provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility, yields 3.31% annually.
Most of the U.S. economic data points for the month of January came in decent despite higher rates and high inflation. This points to the resilience of the U.S. economy. This should benefit the small-cap ETF VBR as these stocks focus more on the domestic economy. Geopolitical tensions are also less likely to bother the segment. Moreover, value stocks fare better in a rising rate environment.
Invesco DB US Dollar Index Bullish ETF (UUP - Free Report)
The U.S. dollar is soaring amid the conflict between Russia and Ukraine and global growth concerns. All these global economic issues normally cause a flight to safety. Since the greenback is a safe asset, it has every chance of wining. Plus, the Fed rate hike should bolster the strength of the greenback. The ETF has a Zacks Rank #2 (Buy).
iShares Currency Hedged MSCI EAFE Small Cap ETF (HSCZ - Free Report)
International investing has been outperforming the U.S. investing this year probably due to the fact that U.S. rates are pretty higher and may thwart the economic growth potential. The fund HSCZ gives a currency-hedged exposoure to unhedged version SCZ, which offers exposure to developed market small-cap segment.
The fund is heavyweight on Japan (30.24%), followed by United Kingdom (14.96%) and Australia (9.97%). Industrials takes the top spot while Consumer Discretionary, Financials and Real Estate sectors round out the top four positions.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 ETFs to Pick for March
Wall Street has entered March on a shaky note as markets have not digested rising rate worries yet. Inflation is running hot in developed economies and may creep higher due to rising energy prices. Fed Governor Christopher J. Waller recently adopted a hawkish tone in his comments, raising the likelihood of a higher terminal rate if inflation numbers don’t subside.
However, Atlanta Fed President Raphael Bostic said he thinks the central bank can keep its interest rate hikes to 25 basis points rather than the half-point increase backed by some other officials, as quoted on CNBC.
The 10-year U.S. benchmark treasury yield started the month at 4.01%, reached 4.08% on Mar 2 and then dropped to 3.97% on Mar 3. Against this backdrop, below, we highlight a few ETFs that could be tapped in March.
ETFs in Focus
Amplify Inflation Fighter ETF IWIN
Supply-chain disruptions and high energy prices are boosting inflation globally. The Federal Reserve's preferred inflation measure increased in January at its fastest clip since June, an ominous sign that price pressures remain deep rooted in the U.S. economy and could lead the Fed to further interest rate hikes well into this year. So, one can play IWIN (read: PCE Inflation Jumps the Most Since June: 5 ETFs to Play).
IWIN is an actively managed ETF, investing in asset classes that look to benefit, either directly or indirectly, from inflation. IWIN intends to provide investors with long-term capital appreciation in inflation-adjusted terms. The portfolio includes an active mix of asset miners, commodities, land development, homebuilders, commodity REITs and real estate technology. The expense ratio of IWIN is 0.85%.
Legg Mason Low Volatility High Dividend ETF (LVHD - Free Report)
The Fed is highly likely to hike rates in mid-March. Sky-high inflation emanating from labor shortage, supply-chain disruptions, as well as higher crude prices, should make Fed members comfortable with several rate hikes in the coming days.
The fund LVHD serves the situation better as it offers low volatility as well dividend exposure. The fund, which provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility, yields 3.31% annually.
Vanguard SmallCap Value ETF (VBR - Free Report)
Most of the U.S. economic data points for the month of January came in decent despite higher rates and high inflation. This points to the resilience of the U.S. economy. This should benefit the small-cap ETF VBR as these stocks focus more on the domestic economy. Geopolitical tensions are also less likely to bother the segment. Moreover, value stocks fare better in a rising rate environment.
Invesco DB US Dollar Index Bullish ETF (UUP - Free Report)
The U.S. dollar is soaring amid the conflict between Russia and Ukraine and global growth concerns. All these global economic issues normally cause a flight to safety. Since the greenback is a safe asset, it has every chance of wining. Plus, the Fed rate hike should bolster the strength of the greenback. The ETF has a Zacks Rank #2 (Buy).
iShares Currency Hedged MSCI EAFE Small Cap ETF (HSCZ - Free Report)
International investing has been outperforming the U.S. investing this year probably due to the fact that U.S. rates are pretty higher and may thwart the economic growth potential. The fund HSCZ gives a currency-hedged exposoure to unhedged version SCZ, which offers exposure to developed market small-cap segment.
The fund is heavyweight on Japan (30.24%), followed by United Kingdom (14.96%) and Australia (9.97%). Industrials takes the top spot while Consumer Discretionary, Financials and Real Estate sectors round out the top four positions.