As investors' concerns about the recession grow intensify, Wall Street continues to be turbulent. " Fear Index " VIX is currently hovering above 31, with a cumulative increase of more than 80% since January. Analysts expect that as the market continues to discuss the next steps of the Federal Reserve's interest rate hike on June 15, market volatility will continue to remain at a high level.
Last week, the Dow Jones Industrial Average and the U.S. S&P 500 index both fell from record highs in early January and fell into the bear market range. Investors in Nasdaq Composite Index have been fighting against the Big Bear since March.
At this time, Wall Street professionals also began to emphasize the importance of paying attention to long-term portfolios. In response, Charles Schwab said that July will usher in another peak season for performance release, when listed companies' "strong balance sheets, high free cash flow yields, and positive expected profit correction" will be crucial to the market.
Therefore, in this article, we might as well pay attention to two low-volatility funds to cope with market volatility under the uncertainty of the Fed and corporate profits:
1, Invesco S&P 500 High Dividend Low Volatility ETF
Current price: $42.25 52 weekly price range: $41.53-49.61 Dividend yield: 3.79% Fee ratio: 0.30%
Invesco S&P 500® High Dividend Low Volatility ETF (NYSE:SPHD) invests in 50 high dividend yields and low volatility S&P 500 stocks.
(SPHD weekly chart comes from Yingwei Finance Investing.com)
SPHD was first listed in October 2012, and its current net assets are US$3.67 billion. In the industry, utilities and daily consumer goods account for the highest proportion, with more than 20% respectively, followed by health care (11.87%), real estate (10.83%), energy (9.32%) and materials (7.91%).
In terms of the company, more than a quarter of the stocks in this ETF's portfolio are top companies. These include energy companies Williams (NYSE:WMB), Jindell Morgan (NYSE:KMI) and Chevron (NYSE:CVX), as well as IBM ( International Commercial Machinery Co., Ltd. ) (NYSE:IBM) and Verizon (Verizon Telecom ) (NYSE:VZ), etc.
SPHD hit an all-time high on April 21. But the fund has been under pressure over the past two months, down 6.7% so far this year. The current P/E and P/B of the fund are 15.11 times and 2.24 times respectively.
We believe that this fund with a relatively diversified investment is worth the attention of investors who are looking for low-volatility stocks in the core sectors while providing stable dividend income.
2, iShares MSCI Emerging Markets Min Vol Factor ETF
Current price: US$54.52 52 weekly price range: US$54.30 - US$64.71 Dividend yield: 2.46% Fee ratio: 0.25%
At present, market investors have differences on the investment direction in the second half of the year.
investment management company Nuveen advises, “Investors with high confidence can look for opportunities in emerging markets. After a challenging 2021, we believe that the current risk/reward situation of Chinese Internet stocks is changing positively.”
and iShares MSCI Emerging Markets Min Vol Factor ETF (NYSE:EEMV) is a fund investing in emerging market stocks with low volatility levels. In other words, this ETF prefers the more stable stocks in emerging markets than the unstable growth stock .
(EEMV weekly chart comes from Yingwei Finance Investing.com)
EEMV was first listed in October 2011. It tracks the MSCI Emerging Markets Minimum Volatility Index, and currently holds 320 stocks. More than a quarter of these companies are located in China, while the rest are from India, Saudi Arabia, South Korea, Thailand, Malaysia, and other countries.
In terms of industry allocation, the financial industry leads the fund with 23.72%, followed by information technology (15.65%), communications (15.14%), consumer essentials (10.99%) and health care (8.6%).
In addition, the top ten stocks in the fund account for nearly 15% of the net assets of US$5.62 billion. Among them, Bank of China (SS:601988), Yangtze River Power (SS:600900), Zhonghua Telecom (TW:2412), First Financial Holdings (TW:2892), Taiwan Mobile (TW:3045), Saudi Rajiha Bank (TADAWUL:1120), etc.
EEMV reached an all-time high in November 2021, but has fallen 13.2% since January. The current P/E and P/B of the fund are 13.59 times and 1.89 times respectively. Investors looking for exposure to emerging markets should include EEMV in their observation list.
