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Beat Coronavirus Blues With These Quality ETFs

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The coronavirus pandemic continues to spread in the United States even though the economy has started to reopen in phases. On May 4, the United States recorded 22,247 new cases and 1,240 deaths, according to Johns Hopkins University. The United States alone has recorded more than 1.1 million cases and a death toll of more than 68,000. A model, often mentioned by the White House, predicts a death toll of 134,000 from the pandemic in the United States by August, almost doubling from the previous forecast, per a CNN report.

The outbreak has caused an unprecedented collapse of economic activities as governments are forced to shut down commerce and implement social distancing measures in an effort to contain the spread of the virus. The job market is also getting disrupted as Americans are consistently filing claims for unemployment benefits. The total U.S. weekly jobless claims now exceed 30 million over the last six weeks. With rising unemployment levels, the spending capacity of consumers is, undoubtedly, getting compromised to a great extent.

However, optimism is being observed among investors as the U.S. economy begins to reopen in phases. Going on, Treasury Secretary Steven Mnuchin is targeting to increase U.S. borrowing from April through June by around $3 trillion to support the economy that has been hammered by the pandemic, per a Bloomberg article. He has also said that “the economy really bounce back in July, August and September” after reopening in May and June, according to a MarketWatch article.

Combat the Pandemic With Quality ETFs

Quality stocks are rich in value characteristics with a healthy balance sheet, high return on capital, low volatility and high margins. They also have a track record of stable or rising sales and earnings growth. In comparison to plain vanilla funds, these products help in lowering volatility and perform rather well during market uncertainty. Further, academic research has proven that high-quality companies constantly provide better risk-adjusted returns than the broader market over the long term.

Given this, we have highlighted five ETFs targeting this niche strategy. These could enjoy smooth trading and generate market-beating returns in the current market environment.

iShares Edge MSCI USA Quality Factor ETF (QUAL - Free Report)

This fund provides exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index (read: 6 Healthy ETFs Amid Coronavirus-Hit Economy).

Expense Ratio: 0.15%

AUM: $16.29 billion

Invesco S&P 500 Quality ETF (SPHQ - Free Report)

This fund tracks the S&P 500 Quality Index, a benchmark of S&P 500 stocks that have the highest-quality score based on three fundamental measures — return on equity, accruals ratio and financial leverage ratio.

Expense Ratio: 0.15%

AUM: $1.73 billion

Barron's 400 ETF (BFOR - Free Report)

This ETF seeks investment results that correspond generally, before fees and expenses, to the performance of the Barron's 400 Index.

Expense Ratio: 0.66%

AUM: $99.1 million

FlexShares Quality Dividend Index Fund (QDF - Free Report)

This ETF seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Quality Dividend Index.

Expense Ratio: 0.37%

AUM: $1.26 billion

SPDR MSCI USA StrategicFactors ETF (QUS - Free Report)

This fund offers exposure to stocks that have a combination of value, low volatility and quality factor strategies. This is done by tracking the MSCI USA Factor Mix A-Series Index.

Expense Ratio: 0.15%

AUM: $725.2 million

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