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.
Traditionally, April brings with it seasonal tailwinds for the equity world. A consensus carried out from 1950 to 2022 shows that April ended up offering positive stock returns in 51 years and negative returns in 22 years, per moneychimp.com, with an average positive return of 1.45%.
Per an article published on CNBC in 2021, Bank of America’s technical research strategist Stephen Suttmeier said that the period ranging from late March into April is a bullish seasonal opportunity, based on historic trading patterns.
Given this historical market performance, let’s take a look at the ETFs that can be intriguing bets for the month.
Technology
The failures of Silicon Valley Bank and Signature Bank in the United States, the buying of Credit Suisse by the UBS and panic-selling in Deutsche Bank led investors to look for safe havens in the equity space. In this pursuit, tech ETFs emerged winners lately.
Communications services and IT stocks came across as winning sectors in the S&P 500 in the recent period and investors continue to buy. Slower rate hikes in the coming days should boost growth sectors like technology. Technology Select Sector SPDR ETF (XLK - Free Report) has a Zacks Rank #2 (Buy).
Materials
According to a 2005 academic paper, “manufacturing and production stocks (e.g., consumer durables, chemicals, construction, mining, steel) outperform between Nov 1 and Apr 30,” as quoted on investingdaily.com. Equity Clock also indicated that higher demand related to industrial production through the spring months feeds into seasonal strength in the material sector from Nov 20 through May 5. This makes Zacks Rank #2 Materials Select Sector SPDR ETF (XLB - Free Report) our pick for April.
Small-Cap Value
As the Fed is expected to go slow with rate hikes in the coming days, small-cap stocks may stage a rebound on increased risk-on trade sentiments. However, though the banking crisis is ebbing, we can expect tighter rules for lending to small-cap stocks from banks in the coming days.
The percentage of Americans who feel financially healthy fell by a huge nine percentage points in March from a year ago while the percentage of consumers who feel themselves financially susceptible increased by eight percentage points, according to a J.D. Power 2023 U.S. Retail Banking Satisfaction Study, as quoted on Yahoo Finance. Thus, a value focus should be beneficial for the small-cap investing. Investors can take a look at Vanguard Small-Cap Value ETF (VBR - Free Report) . The fund has a Zacks Rank #1 (Strong Buy).
Energy
Per Equity Clock, energy stocks too perform better till early May. The likelihood of a less-hawkish Fed and ECB amid the banking crisis should improve the energy demand scenario. Meanwhile, the banking crisis in the United States and Europe has been well-managed. China has also reopened its economy this year. Moreover, OPEC+ announced a surprise output cut lately. Hence, we can expect an uptick in oil demand and prices. Energy Select Sector SPDR ETF (XLE - Free Report) has a Zacks Rank #2.
Dividend Growth ETFs
Goes without saying that such a volatile environment calls for quality investments. Dividend aristocrats or dividend growth ETF investing is such an option. Companies that have the willingness and ability to pay and grow their dividend over time are called dividend aristocrats. Such activities make them quality picks (read: ETF Strategies to Tide Over the Ongoing Banking Crisis).
U.S.-based dividend growth ETFs include SPDR S&P Dividend ETF (SDY - Free Report) , which has a Zacks Rank #2. The fund charges 35 bps in fees and yields 2.53% annually. The fund includes constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 Top-Ranked ETFs to Buy for April
Traditionally, April brings with it seasonal tailwinds for the equity world. A consensus carried out from 1950 to 2022 shows that April ended up offering positive stock returns in 51 years and negative returns in 22 years, per moneychimp.com, with an average positive return of 1.45%.
Per an article published on CNBC in 2021, Bank of America’s technical research strategist Stephen Suttmeier said that the period ranging from late March into April is a bullish seasonal opportunity, based on historic trading patterns.
Given this historical market performance, let’s take a look at the ETFs that can be intriguing bets for the month.
Technology
The failures of Silicon Valley Bank and Signature Bank in the United States, the buying of Credit Suisse by the UBS and panic-selling in Deutsche Bank led investors to look for safe havens in the equity space. In this pursuit, tech ETFs emerged winners lately.
Communications services and IT stocks came across as winning sectors in the S&P 500 in the recent period and investors continue to buy. Slower rate hikes in the coming days should boost growth sectors like technology. Technology Select Sector SPDR ETF (XLK - Free Report) has a Zacks Rank #2 (Buy).
Materials
According to a 2005 academic paper, “manufacturing and production stocks (e.g., consumer durables, chemicals, construction, mining, steel) outperform between Nov 1 and Apr 30,” as quoted on investingdaily.com. Equity Clock also indicated that higher demand related to industrial production through the spring months feeds into seasonal strength in the material sector from Nov 20 through May 5. This makes Zacks Rank #2 Materials Select Sector SPDR ETF (XLB - Free Report) our pick for April.
Small-Cap Value
As the Fed is expected to go slow with rate hikes in the coming days, small-cap stocks may stage a rebound on increased risk-on trade sentiments. However, though the banking crisis is ebbing, we can expect tighter rules for lending to small-cap stocks from banks in the coming days.
The percentage of Americans who feel financially healthy fell by a huge nine percentage points in March from a year ago while the percentage of consumers who feel themselves financially susceptible increased by eight percentage points, according to a J.D. Power 2023 U.S. Retail Banking Satisfaction Study, as quoted on Yahoo Finance. Thus, a value focus should be beneficial for the small-cap investing. Investors can take a look at Vanguard Small-Cap Value ETF (VBR - Free Report) . The fund has a Zacks Rank #1 (Strong Buy).
Energy
Per Equity Clock, energy stocks too perform better till early May. The likelihood of a less-hawkish Fed and ECB amid the banking crisis should improve the energy demand scenario. Meanwhile, the banking crisis in the United States and Europe has been well-managed. China has also reopened its economy this year. Moreover, OPEC+ announced a surprise output cut lately. Hence, we can expect an uptick in oil demand and prices. Energy Select Sector SPDR ETF (XLE - Free Report) has a Zacks Rank #2.
Dividend Growth ETFs
Goes without saying that such a volatile environment calls for quality investments. Dividend aristocrats or dividend growth ETF investing is such an option. Companies that have the willingness and ability to pay and grow their dividend over time are called dividend aristocrats. Such activities make them quality picks (read: ETF Strategies to Tide Over the Ongoing Banking Crisis).
U.S.-based dividend growth ETFs include SPDR S&P Dividend ETF (SDY - Free Report) , which has a Zacks Rank #2. The fund charges 35 bps in fees and yields 2.53% annually. The fund includes constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years.