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5 ETFs to Protect Your Portfolio From Coronavirus Threat
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Coronavirus, a deadly virus which originated in China, has shaken the stock market across the globe. This is especially true as the outbreak of coronavirus — an illness similar to severe acute respiratory syndrome (SARS) — is getting stronger and infection is spreading fast and wide. As such, investors are concerned that this outbreak will turn into a widespread pandemic.
Per the latest report from China's National Health Commission, more than 2,000 people have been infected globally with 76 in China killed by the disease. Additionally, the United States registered five cases of coronavirus — two cases in California and one each in Arizona, Illinois and Washington state — and more are expected. Other regions in Southeast Asia and Europe are also witnessing the impact of the deadly virus (read: Sector ETFs & Stocks to Gain/Lose on Coronavirus Outbreak).
Against such a backdrop, we have highlighted five ETFs that could benefit investors’ portfolio. These products could provide some shelter from the crisis and would be in focus in the weeks ahead.
Gold is often viewed as a store of value and a hedge against market turmoil. The product tracking this bullion like GLD could be an interesting pick to play in the current market turbulence. The fund tracks the price of gold bullion measured in U.S. dollars, and is kept in London under the custody of HSBC Bank USA. It is the ultra-popular gold ETF with AUM of $45.3 billion and heavy volume of nearly 9.4 million shares a day. It charges 40 bps in fees per year from investors. The product has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: ETF Strategies to Combat Coronavirus Outbreak).
Invesco CurrencyShares Japanese Yen Trust (FXY - Free Report)
Yen is considered a safe-haven currency in times of uncertainty. Investors could tap this via FXY, which appears a great way to play a future rise in the yen relative to the U.S. dollar. It tracks the price of the Japanese yen relative to the U.S. dollar. The fund charges 40 bps a year in fees and sees a moderate volume of roughly 82,000 shares per day. The product has accumulated $199.6 million in its asset base and has a Zacks ETF Rank #3 with a Medium risk outlook.
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report)
This is a popular option providing exposure to volatility that sees truly impressive average volume of about 36.7 million shares a day. The note has amassed $934.6 million in AUM and charges 89 bps in fees per year. The ETN focuses on the S&P 500 VIX Short-Term Futures Index, which reflects implied volatility in the S&P 500 Index at various points along the volatility forward curve. It provides investors with exposure to a daily rolling long position in the first and second months of VIX futures contracts.
The products tracking the long end of the yield curve often provide a safe haven. TLT provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. It is one of the most popular and liquid ETFs in the bond space with AUM of $18.8 billion and average daily volume of 10.7 million shares. Expense ratio comes in at 0.15%. Holding 38 securities in its basket, the fund focuses on the top credit rating bonds with average maturity of 25.48 years and effective duration of 18.13 years. It has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: 5 Hot ETF Themes for 2020).
The fast-spreading coronavirus has sparked a race among biotech companies, each claiming that its technology can quickly whip up a vaccine to quell a potential crisis. As such, these stocks could see some gains owing to increased demand for drugs or vaccinations. With AUM of $4.2 billion, XBI provides equal-weight exposure across biotechnology stocks by tracking the S&P Biotechnology Select Industry Index. It has 0.35% in expense ratio and trades in average daily volume of 4.9 million shares. The fund has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Top Performing ETFs of the Decade).
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5 ETFs to Protect Your Portfolio From Coronavirus Threat
Coronavirus, a deadly virus which originated in China, has shaken the stock market across the globe. This is especially true as the outbreak of coronavirus — an illness similar to severe acute respiratory syndrome (SARS) — is getting stronger and infection is spreading fast and wide. As such, investors are concerned that this outbreak will turn into a widespread pandemic.
Per the latest report from China's National Health Commission, more than 2,000 people have been infected globally with 76 in China killed by the disease. Additionally, the United States registered five cases of coronavirus — two cases in California and one each in Arizona, Illinois and Washington state — and more are expected. Other regions in Southeast Asia and Europe are also witnessing the impact of the deadly virus (read: Sector ETFs & Stocks to Gain/Lose on Coronavirus Outbreak).
Against such a backdrop, we have highlighted five ETFs that could benefit investors’ portfolio. These products could provide some shelter from the crisis and would be in focus in the weeks ahead.
SPDR Gold Trust ETF (GLD - Free Report)
Gold is often viewed as a store of value and a hedge against market turmoil. The product tracking this bullion like GLD could be an interesting pick to play in the current market turbulence. The fund tracks the price of gold bullion measured in U.S. dollars, and is kept in London under the custody of HSBC Bank USA. It is the ultra-popular gold ETF with AUM of $45.3 billion and heavy volume of nearly 9.4 million shares a day. It charges 40 bps in fees per year from investors. The product has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: ETF Strategies to Combat Coronavirus Outbreak).
Invesco CurrencyShares Japanese Yen Trust (FXY - Free Report)
Yen is considered a safe-haven currency in times of uncertainty. Investors could tap this via FXY, which appears a great way to play a future rise in the yen relative to the U.S. dollar. It tracks the price of the Japanese yen relative to the U.S. dollar. The fund charges 40 bps a year in fees and sees a moderate volume of roughly 82,000 shares per day. The product has accumulated $199.6 million in its asset base and has a Zacks ETF Rank #3 with a Medium risk outlook.
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report)
This is a popular option providing exposure to volatility that sees truly impressive average volume of about 36.7 million shares a day. The note has amassed $934.6 million in AUM and charges 89 bps in fees per year. The ETN focuses on the S&P 500 VIX Short-Term Futures Index, which reflects implied volatility in the S&P 500 Index at various points along the volatility forward curve. It provides investors with exposure to a daily rolling long position in the first and second months of VIX futures contracts.
iShares 20+ Year Treasury Bond ETF (TLT - Free Report)
The products tracking the long end of the yield curve often provide a safe haven. TLT provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. It is one of the most popular and liquid ETFs in the bond space with AUM of $18.8 billion and average daily volume of 10.7 million shares. Expense ratio comes in at 0.15%. Holding 38 securities in its basket, the fund focuses on the top credit rating bonds with average maturity of 25.48 years and effective duration of 18.13 years. It has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: 5 Hot ETF Themes for 2020).
SPDR S&P Biotech ETF (XBI - Free Report)
The fast-spreading coronavirus has sparked a race among biotech companies, each claiming that its technology can quickly whip up a vaccine to quell a potential crisis. As such, these stocks could see some gains owing to increased demand for drugs or vaccinations. With AUM of $4.2 billion, XBI provides equal-weight exposure across biotechnology stocks by tracking the S&P Biotechnology Select Industry Index. It has 0.35% in expense ratio and trades in average daily volume of 4.9 million shares. The fund has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Top Performing ETFs of the Decade).
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 >>