Tag: ETF building block

Big banks are raising dividends, amid news that the June U.S. consumer confidence data hit its highest level since the coronavirus pandemic began. Banks have also passed their stress tests, heightening expectations for robust economic growth in Q2.

Investors looking to diversify can consider an ETF strategy that alternates its tilt toward S&P 500 investment factors as the market itself changes. In the recent webcast, Factor Rotation Strategies May Help You Profit in Varying Market Cycles , Sean O’Hara, President, Pacer ETFs Distributors; and John Lunt, President, Lunt Capital Management, explained that public instruments have characteristics and attributes that can be calculated and tracked.

While plenty of market participants are eager for growth stocks to come back into focus, investors shouldn’t be hasty in dismissing RZV and its heavily cyclical lineup. In fact, some analysts see more upside ahead for cyclical equities.

ETF investors seeking to capture the upside of small cap equities without the added dose of volatility can do so with the Invesco S&P SmallCap Low Volatility ETF ( XSLV B- ). As per the fund description, XSLV seeks to track the investment results of the S&P SmallCap 600 Low Volatility Index.

Despite historically low-interest rates weighing on bank earnings, the Financial Select Sector SPDR Fund (NYSE: XLF ) is up 27.5% in 2021, more than double the return of the SPDR S&P 500 ETF Trust (NYSE: SPY ). Earnings Expectations: On Thursday, DataTrek Research co-founder Nicholas Colas said investors should stick with the financial sector for at least two reasons.

It’s often said that small cap value is one of the most potent factor combinations, one which handsomely rewards investors over the long-term. How well that thesis plays out over time remains to be seen, but for investors in 2021, small-cap value is obliterating other factors.

Until late last year, the growth factor spent over a decade outperforming its value rival. That scenario prompted advisors and investors to pump tens of billions of dollars into passive growth strategies, including exchange traded funds.

Exchange traded fund investors can focus on a mid-capitalization fund strategy targeting today’s high-conviction stock picks. In the recent webcast, Don’t Dilute Your Dollars with an Index-Only Strategy , Amy Zhang, Executive Vice President, Portfolio Manager, Alger, highlighted the historical outperformance of the mid cap category, which has generated an annualized total return of 12.3% from 1990 through 2020, compared to the 11.0% for small caps and 10.7% for large caps over the same period.

As U.S. markets tumbled again on signs of inflationary pressures, investors worried about continued volatility can consider a targeted ETF strategy. Investors are refocused on the recent spike in inflation and whether or not rising consumer prices will stick around.

With mid caps soaring this year, volatility reduction may not be top of mind for many investors. Yet those those looking for engagement with an asset class with reduced turbulence can consider the Invesco S&P MidCap Low Volatility ETF (NYSEArca: XMLV) .

At the factor level, two prominent themes are in place through less than five months into 2021. First, it’s clear value stocks are regaining long lost market leadership. Second, dividend growth is on pace for an impressive year, bringing relief to investors in a low-yield climate.

Rising interest rates are a big story line in U.S. markets this year and that’s providing fuel for the financial services sector. Bank stocks have momentum, and investors can tap into that theme with momentum-based strategies, including the Invesco DWA Financial Momentum Portfolio (PFI) .

Finding value makes for a strong long-term investment, which could be why the VanEck Vectors Morningstar Wide Moat ETF (MOAT)   has been seeing strong fund flows the past month. Fundamental analysis involves finding value among companies that have a competitive advantage in their respective marketplace.

Momentum investing and regional banks appear to be joined at the hip. To continue playing this strength in the second quarter of 2021, investors can look at the iShares U.S. Regional Banks ETF (IAT) . IAT seeks to track the investment results of the Dow Jones U.S. Select Regional Banks Index.