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.
5 ETFs to Follow Despite Cut in U.S. Growth Forecast
Read MoreHide Full Article
U.S. growth momentum seems to be slowing. The growth momentum unexpectedly decelerated in the fourth quarter having increased at a 2.6% annual rate, from 3.2% growth clip in the third quarter. Now, several research houses have jumped on the bandwagon of cutting the first-quarter GDP growth estimates.
Inside Reduced Growth Forecast for Q1
Wall Street firms reduced their forecasts for U.S. economic growth in the first quarter of 2018 reflecting a decline in January retail sales. Morgan Stanley sliced its estimate for gross domestic product to 2.9% from 3.3%. Barclays and IHS pared their GDP estimates to 2.3% from 2.5%. And Bank of America Merrill Lynch cut its target to 2% from 2.3%.
U.S. retail sales dropped 0.3% sequentially in January, marking “the largest decline since February 2017.” January growth was recorded almost after no growth in December and below market expectations of a 0.2% gain. A slump in auto sales was behind the move.
Investors have high hopes on new tax codes and Trump’s proposed fiscal reflation and expect the growth momentum to get a material boost. However, retail sales decline jumbled up the figure. Plus, there is threat from higher inflationary expectations and rising bond yields.
Against this backdrop, it is better to look at quality ETFs or the ones that are likely to march ahead on synchronized global growth or their fundamental strength.
QUAL holds high-quality large and mid-cap U.S. stocks identified through three main fundamental variables: high return on equity (ROE), stable year-over-year earnings growth and low financial leverage. It charges a low expense ratio of 15 basis points per year (read: Markets Bounce Back: Still It Is Time for Quality ETFs?).
FlexShares Quality Dividend Index Fund (QDF - Free Report)
The underlying index of the fund, the Northern Trust Quality Dividend Index, is designed to provide exposure to a high-quality income-oriented portfolio of long-only U.S. equity securities, with importance to long-term capital growth and a targeted overall beta that is similar to that of the Northern Trust 1250 Index. The index is selected based on expected dividend payment and fundamental factors.
As the name suggests, BFOR tracks the performance of the Barron’s 400 Index that looks to select high-performing U.S. stocks based on four fundamental factors — growth, valuation, profitability and cash flow.
Stocks selected on the basis of strong fundamentals are then screened for certain criteria regarding concentration, market capitalization and liquidity. The eligible stocks are equally weighted in the index that is rebalanced semiannually.
This fund provides exposure to 50 U.S. stocks with a history of rising dividend that are expected to continue doing so in the future. In addition, it also screens for stocks with rising earnings per share and cash to debt ratio greater than 50%. This is done by tracking the NASDAQ Rising Dividend Achievers Index (read: 5 Quality Dividend ETFs Crushing the Market on Tax Reform).
The underlying index – the Capital Strength Index – is an equal-dollar weighted index which provides exposure to well-capitalized companies with solid market position based on strong balance sheets, a high degree of liquidity, ability to generate earnings growth & record financial strength & profit growth.
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 ETFs to Follow Despite Cut in U.S. Growth Forecast
U.S. growth momentum seems to be slowing. The growth momentum unexpectedly decelerated in the fourth quarter having increased at a 2.6% annual rate, from 3.2% growth clip in the third quarter. Now, several research houses have jumped on the bandwagon of cutting the first-quarter GDP growth estimates.
Inside Reduced Growth Forecast for Q1
Wall Street firms reduced their forecasts for U.S. economic growth in the first quarter of 2018 reflecting a decline in January retail sales. Morgan Stanley sliced its estimate for gross domestic product to 2.9% from 3.3%. Barclays and IHS pared their GDP estimates to 2.3% from 2.5%. And Bank of America Merrill Lynch cut its target to 2% from 2.3%.
U.S. retail sales dropped 0.3% sequentially in January, marking “the largest decline since February 2017.” January growth was recorded almost after no growth in December and below market expectations of a 0.2% gain. A slump in auto sales was behind the move.
Investors have high hopes on new tax codes and Trump’s proposed fiscal reflation and expect the growth momentum to get a material boost. However, retail sales decline jumbled up the figure. Plus, there is threat from higher inflationary expectations and rising bond yields.
Against this backdrop, it is better to look at quality ETFs or the ones that are likely to march ahead on synchronized global growth or their fundamental strength.
iShares MSCI USA Quality Factor ETF (QUAL - Free Report)
QUAL holds high-quality large and mid-cap U.S. stocks identified through three main fundamental variables: high return on equity (ROE), stable year-over-year earnings growth and low financial leverage. It charges a low expense ratio of 15 basis points per year (read: Markets Bounce Back: Still It Is Time for Quality ETFs?).
FlexShares Quality Dividend Index Fund (QDF - Free Report)
The underlying index of the fund, the Northern Trust Quality Dividend Index, is designed to provide exposure to a high-quality income-oriented portfolio of long-only U.S. equity securities, with importance to long-term capital growth and a targeted overall beta that is similar to that of the Northern Trust 1250 Index. The index is selected based on expected dividend payment and fundamental factors.
Barron’s 400 ETF (BFOR - Free Report)
As the name suggests, BFOR tracks the performance of the Barron’s 400 Index that looks to select high-performing U.S. stocks based on four fundamental factors — growth, valuation, profitability and cash flow.
Stocks selected on the basis of strong fundamentals are then screened for certain criteria regarding concentration, market capitalization and liquidity. The eligible stocks are equally weighted in the index that is rebalanced semiannually.
First Trust NASDAQ Rising Dividend Achievers ETF (RDVY - Free Report)
This fund provides exposure to 50 U.S. stocks with a history of rising dividend that are expected to continue doing so in the future. In addition, it also screens for stocks with rising earnings per share and cash to debt ratio greater than 50%. This is done by tracking the NASDAQ Rising Dividend Achievers Index (read: 5 Quality Dividend ETFs Crushing the Market on Tax Reform).
First Trust Capital Strength ETF (FTCS - Free Report)
The underlying index – the Capital Strength Index – is an equal-dollar weighted index which provides exposure to well-capitalized companies with solid market position based on strong balance sheets, a high degree of liquidity, ability to generate earnings growth & record financial strength & profit growth.
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 >>