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The Zacks Analyst Blog Highlights: iShares Edge MSCI Min, Nationwide Risk-Based, PowerShares Russell, iShares Russell 1000 and Vanguard Mid-Cap
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For Immediate Release
Chicago, IL – February 6, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include iShares Edge MSCI Min Vol USA ETF (USMV - Free Report) , Nationwide Risk-Based U.S. Equity ETF , PowerShares Russell 1000 Low Beta Equal Weight Portfolio , iShares Russell 1000 Value ETF (IWD - Free Report) and Vanguard Mid-Cap Value ETF (VOE - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Wall Street’s Worst Selloff in Years: 5 ETF Buying Zones
After a prolonged period of calm, Wall Street witnessed the biggest one-day drop in more than a year and the steepest weekly loss in about two years. Both the Dow Jones and the S&P 500 declined nearly 4% last week with a higher number of declining stocks. The number of declining stocks reached more than 27,000, the highest since at least July 2014 and the number of stocks hitting yearly lows reached 3,000, a number not seen since 2016. All these signal the start of a tumultuous period in markets.
The sell-off came after a stronger-than-expected jobs report that has sparked fears of inflation and the resultant anticipation of increase in interest rates aggressively. Average hourly wages rose 0.3%, pushing the year-over-year increase to 2.9% — the fastest pace in more than eight years. Additionally, political turmoil including a government funding deadline on Feb 8 and upcoming debt limit issue as well as threats of overvaluation have added to the woes (read: Best Dividend Growth ETFs for Rising Rates).
However, the stock market is currently in a much better condition thanks to encouraging domestic and international fundamentals, better-than-expected corporate earnings and the new tax legislation. The massive $1.5-trillion tax cuts will create an economic surge, boosting job growth and earnings of corporates.
About halfway through the earnings season, the picture appears to be solid with all around strength and momentum. Not only is an above-average proportion of companies beating top- and bottom-line expectations, but estimates for the current period are also materially going up.
The latest sell-off and still brightened stock outlook could prompt investors to re-access their portfolio. For them, we have highlighted some of the equity ETF picks that could perform well in a volatile market reducing the risk of a downside (read: Unbelievable ETFs & Stocks On Sale):
Low Volatility - iShares Edge MSCI Min Vol USA ETF
This fund offers exposure to 207 U.S. stocks having lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. It is well spread across a number of securities with none holding more than 1.6% of assets. From a sector look, information technology, health care, consumer staples, financials and industrials take the top five spots with a double-digit allocation each. With AUM of $15.1 billion, the product charges 0.15% in expense ratio and trades in solid average daily volume of 1.4 million shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Risk-Based - Nationwide Risk-Based U.S. Equity ETF
This ETF follows the R Risk-Based US Index and employs a risk-based strategy that seeks to provide upside potential while protecting against losses stemming from volatility. It holds well-diversified 251 stocks in its basket, with none of the securities accounting for more than 1.51% share and none of the sectors making up for more than 16% of assets. RBUS is newly debuted in the space and has accumulated $120.3 million within five months. It charges 30 bps in annual fees and trades in a thin volume of 2,000 shares a day on average (read: Volatility ETFs Advance On Rising Yields).
This fund seeks to track the performance of the Russell 1000 Low Beta Equal Weight Index, holding 372 stocks exhibiting low-beta characteristics. It is widely diversified across components with each security accounting for less than 0.4% of assets. The top five sectors — information technology, consumer discretionary, real estate, consumer staples, and industrials — receive a double-digit allocation each. USLB has accumulated $157.1 million and charges 35 bps in annual fees. Volume is light, exchanging about 12,000 shares per day on average. The fund has a Zacks ETF Rank #3 with a Medium risk outlook.
Value - iShares Russell 1000 Value ETF
This ETF offers exposure to U.S. companies that are thought to be undervalued by the market relative to comparable companies by tracking the Russell 1000 Value Index. It holds 713 stocks in its basket with each accounting for no more than 3.14% share. From a sector look, financials takes the largest allocation at 27.4%, followed by healthcare (13.7%) and energy (10.8%). It is the most popular and liquid option in the value space with AUM of $39.6 billion and average daily volume of 2 million shares. The product charges 20 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Value Investing Set to Shine on Tax Reform: 5 Cheap ETFs).
Mid Cap - Vanguard Mid-Cap Value ETF
This fund provides investors exposure to the mid-cap segment of the broad market with a value tilt. Investors should note that mid caps offer the best of both the worlds, allowing growth and stability in portfolios simultaneously. These middle-of-road securities are arguably safer options and have the potential to move higher in turbulent times. VOE follows the CRSP US Mid Cap Value Index, holding well-diversified 206 stocks, with each making up for no more than 1.3% of assets. However, about 26.4% of the portfolio is skewed toward financials while consumer goods, consumer services and industrials round off the next three. Expense ratio comes in at 0.07%. The ETF has amassed $8.7 million in its asset base and trades in a good average volume of 232,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: iShares Edge MSCI Min, Nationwide Risk-Based, PowerShares Russell, iShares Russell 1000 and Vanguard Mid-Cap
For Immediate Release
Chicago, IL – February 6, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include iShares Edge MSCI Min Vol USA ETF (USMV - Free Report) , Nationwide Risk-Based U.S. Equity ETF , PowerShares Russell 1000 Low Beta Equal Weight Portfolio , iShares Russell 1000 Value ETF (IWD - Free Report) and Vanguard Mid-Cap Value ETF (VOE - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Wall Street’s Worst Selloff in Years: 5 ETF Buying Zones
After a prolonged period of calm, Wall Street witnessed the biggest one-day drop in more than a year and the steepest weekly loss in about two years. Both the Dow Jones and the S&P 500 declined nearly 4% last week with a higher number of declining stocks. The number of declining stocks reached more than 27,000, the highest since at least July 2014 and the number of stocks hitting yearly lows reached 3,000, a number not seen since 2016. All these signal the start of a tumultuous period in markets.
The sell-off came after a stronger-than-expected jobs report that has sparked fears of inflation and the resultant anticipation of increase in interest rates aggressively. Average hourly wages rose 0.3%, pushing the year-over-year increase to 2.9% — the fastest pace in more than eight years. Additionally, political turmoil including a government funding deadline on Feb 8 and upcoming debt limit issue as well as threats of overvaluation have added to the woes (read: Best Dividend Growth ETFs for Rising Rates).
However, the stock market is currently in a much better condition thanks to encouraging domestic and international fundamentals, better-than-expected corporate earnings and the new tax legislation. The massive $1.5-trillion tax cuts will create an economic surge, boosting job growth and earnings of corporates.
About halfway through the earnings season, the picture appears to be solid with all around strength and momentum. Not only is an above-average proportion of companies beating top- and bottom-line expectations, but estimates for the current period are also materially going up.
The latest sell-off and still brightened stock outlook could prompt investors to re-access their portfolio. For them, we have highlighted some of the equity ETF picks that could perform well in a volatile market reducing the risk of a downside (read: Unbelievable ETFs & Stocks On Sale):
Low Volatility - iShares Edge MSCI Min Vol USA ETF
This fund offers exposure to 207 U.S. stocks having lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. It is well spread across a number of securities with none holding more than 1.6% of assets. From a sector look, information technology, health care, consumer staples, financials and industrials take the top five spots with a double-digit allocation each. With AUM of $15.1 billion, the product charges 0.15% in expense ratio and trades in solid average daily volume of 1.4 million shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Risk-Based - Nationwide Risk-Based U.S. Equity ETF
This ETF follows the R Risk-Based US Index and employs a risk-based strategy that seeks to provide upside potential while protecting against losses stemming from volatility. It holds well-diversified 251 stocks in its basket, with none of the securities accounting for more than 1.51% share and none of the sectors making up for more than 16% of assets. RBUS is newly debuted in the space and has accumulated $120.3 million within five months. It charges 30 bps in annual fees and trades in a thin volume of 2,000 shares a day on average (read: Volatility ETFs Advance On Rising Yields).
Low Beta - PowerShares Russell 1000 Low Beta Equal Weight Portfolio
This fund seeks to track the performance of the Russell 1000 Low Beta Equal Weight Index, holding 372 stocks exhibiting low-beta characteristics. It is widely diversified across components with each security accounting for less than 0.4% of assets. The top five sectors — information technology, consumer discretionary, real estate, consumer staples, and industrials — receive a double-digit allocation each. USLB has accumulated $157.1 million and charges 35 bps in annual fees. Volume is light, exchanging about 12,000 shares per day on average. The fund has a Zacks ETF Rank #3 with a Medium risk outlook.
Value - iShares Russell 1000 Value ETF
This ETF offers exposure to U.S. companies that are thought to be undervalued by the market relative to comparable companies by tracking the Russell 1000 Value Index. It holds 713 stocks in its basket with each accounting for no more than 3.14% share. From a sector look, financials takes the largest allocation at 27.4%, followed by healthcare (13.7%) and energy (10.8%). It is the most popular and liquid option in the value space with AUM of $39.6 billion and average daily volume of 2 million shares. The product charges 20 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Value Investing Set to Shine on Tax Reform: 5 Cheap ETFs).
Mid Cap - Vanguard Mid-Cap Value ETF
This fund provides investors exposure to the mid-cap segment of the broad market with a value tilt. Investors should note that mid caps offer the best of both the worlds, allowing growth and stability in portfolios simultaneously. These middle-of-road securities are arguably safer options and have the potential to move higher in turbulent times. VOE follows the CRSP US Mid Cap Value Index, holding well-diversified 206 stocks, with each making up for no more than 1.3% of assets. However, about 26.4% of the portfolio is skewed toward financials while consumer goods, consumer services and industrials round off the next three. Expense ratio comes in at 0.07%. The ETF has amassed $8.7 million in its asset base and trades in a good average volume of 232,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.