If you're wondering where to invest during these uncertain times, then the exchange traded funds (ETFs) listed below could be worth considering.
Both have just been rated as buys by analysts and tipped as top options in the current environment. Here's what you need to know:
ETFS S&P 500 High Yield Low Volatility ETF (ASX: ZYUS)
The first ETF for investors to consider is the ETFS S&P 500 High Yield Low Volatility ETF.
This ETF aims to provide investors with a return that tracks the performance of the S&P 500 Low Volatility High Dividend Index. This index is designed to provide exposure to 50 high-yielding, low volatility stocks from the S&P 500 while meeting diversification and tradability requirements.
Among its holdings are IBM, Kinder Morgan, Kraft Heinz, Philip Morris, and Verizon.
Felicity Thomas from Shaw and Partners is a fan of this ETF. She told Livewire:
I really like ETF Securities High Yield Low Volatility ETF. Essentially, I really like their methodology. They look at the top 75 high-quality businesses and they only take 10 high-yielding companies per sector, and they remove the 25 most volatile. It's got names like Kraft, IBM, and Verizon and also pays a quality distribution. And I think everyone's looking for defensive yield at the moment.
VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL)
Another ETF for investors to look at is the VanEck Vectors MSCI World ex Australia Quality ETF. It provides investors with access to a portfolio of high quality shares outside Australia.
To be included in the ETF these companies need to pass certain criteria such as having low leverage, high growth rates, and high returns on equity. Companies that have made it into the fund include Apple, Microsoft, Nike, and Nvidia.
Apt Wealth's Sarah Gonzales is very positive on the ETF and named it as her top pick right now. She told Livewire:
My preferred ETF is the VanEck MSCI International Quality ETF. I think it provides exposure to that quality factor, which tends to outperform in market downturns. It does focus on factors like return and equity, year-on-year growth of earnings and also levels of debt. These are proxies for profitability, earnings variability, and the level of debt of companies. Particularly if we are going into a recession, I think these are really the factors that I think we should focus on.
