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Second Shutdown Seems Unlikely: Pick High Beta & Momentum ETFs

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Democrats and Republicans have reached a deal yesterday in principle over border security to fund the U.S. government and dodge a second round of shutdown due to start after Feb 15. However, no details were provided.

After a 35-day impasse, the U.S. federal government reopened in January-end for three weeks. A deadlock in passing a spending bill, wherein Trump demanded $5.6 billion funding for a border wall that was being opposed by the Democrats, was the main reason for the shutdown (read: U.S. Government Reopens: Tap High Beta & Momentum ETFs).

We reached an agreement in principle” on funding border security programs through Sep 30, per Republican Senator Richard Shelby, as quoted on Reuters. However, he did not mention whether President Donald Trump will be able to sanction any money for a U.S.-Mexico border wall.

Though it is yet unclear if President Donald Trump will support the agreement, there is still a ray of hope. In this regard, investors can take advantage of the newfound optimism in the market and play high beta and momentum ETFs as long as the trend is alive (read: 3 Overlooked Value ETFs & Stocks to Grab Now).

High Beta ETF

Beta is directly related to market movement. Notably, high-beta funds tend to rise or fall more than the stock market and are thus more volatile. When markets soar, high beta funds experience larger gains than the broader market counterparts and thus outpace their rivals.

Invesco S&P 500 High Beta Portfolio (SPHB - Free Report)

This fund tracks the performance of about 100 stocks from the S&P 500 Index with the highest realized volatility over the past 12 months. The fund charges 25 bps in fees.

High Momentum ETFs

Momentum investing might be an intriguing idea for those seeking higher returns in a short spell. It looks to book profits buying stocks that are sizzling on the market.

Fidelity Momentum Factor ETF (FDMO - Free Report)

The Fidelity U.S. Momentum Factor Index reflects the performance of stocks of large and mid-capitalization domestic companies signaling momentum. It charges 29 bps in fees.

iShares MSCI USA Momentum Factor ETF (MTUM - Free Report)

This ETF seeks to track the performance of large- and mid-cap U.S. stocks exhibiting relatively higher momentum characteristics. The fund charges 15 bps in fees.

Invesco DWA Tactical Sector Rotation ETF

The underlying index is designed to gain exposure to the strongest relative strength sectors in the United States through the universe of nine Invesco DWA sector Momentum ETFs. It charges 75 bps in fees.

Invesco DWA Momentum &Low Volatility Rotation ETF

Th fund is appropriate for those who want global exposure. The underlying index of the fund looks to gain exposure to the equity market that displays the strongest relative strength at any given time. The fund charges 68 bps in fees.

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