Wall Street-professionelle, analytikermiljøet og individuelle investorer blev kastet ud i en løkke i 2018. Amerikanske toldstridigheder med resten af verden, vilde energiprisudsving og globale vækstbekymringer hærgede ikke kun markedet på forskellige punkter, men har også eksperterne prædiker forsigtighed, når vi går ind i det nye år. De bedste ETF'er for 2019 bliver derfor nødt til at nå et par specifikke mål.
For det første vil du have nogle ETF'er, der positionerer dig defensivt, mens du stadig tillader dig at nyde i det mindste nogle opadrettede, hvis markedet går højere på trods af al den modvind, det møder. Adskillige ekspertmarkedsudsigter viser, at Standard &Poor's 500-aktieindekset stiger i 2019, men ingen af dem er sprudlende, og de advarer alle mod adskillige potentielle faldgruber. Forankring af din portefølje med fonde, der fremhæver f.eks. lav volatilitet eller indkomst, kan sætte dig i en stærk position, uanset hvad markedet bringer.
Du skal også tage dine skud - aktier kan ende med at blive træge som helhed, men det betyder ikke, at visse områder af markedet ikke kan eksplodere alligevel. Så nogle af de bedste ETF'er for det kommende år vil fokusere på specifikke sektorer, industrier og endda andre områder af verden for at forsøge at skabe bedre resultater.
Her er de bedste ETF'er at købe for 2019. Disse 19 fonde driver spektret, fra meget diversificerede kurve, der er investeret i tusindvis af virksomheder, til koncentrerede porteføljer, der kun bruger et par dusin aktier til at drage fordel af et specifikt tema. Der er ETF'er for både konservative investorer og risikotagere. Og selvom de fleste af disse valg er passive indeksfonde, er der endda nogle få ETF'er, der udnytter hjernekraften fra dygtig aktiv forvaltning. Tag et kig:
Vanguard S&P 500 ETF (VOO) - eller i det mindste nogle S&P 500 tracker-fonde - laver typisk de fleste "bedste ETF'er"-lister i et givet år. Det skyldes, at selv de bedste pengeforvaltere i verden har svært ved at slå markedet.
SPIVA US Year-End 2017-rapporten viste, at i 2017 underperformerede 63,08 % af de store kapitalforvaltere S&P 500. Det er ikke godt, og det bliver værre som tiden går – 80,56 % underperformerede i den treårige periode, 84,23 % på fem år, 89,51 % på 10 år og 92,33 % på 15 år.
At slå markedet er bestemt meget vanskeligere for "mom 'n' pop"-investorer, som måske kun bruger et par timer hver måned på at undersøge deres investeringer … så hvorfor ikke bare matche markedet med VOO eller en lignende fond?
Men i år vil investorer måske overveje Vanguard Total Stock Market ETF (VTI, $131,96). Hvorfor? Fordi Vanguard selv ser det som den bedre mulighed for sine medarbejdere. I 2018 fjernede Vanguard den S&P 500-sporende Vanguard Institutional Index Fund (VINIX) fra sin 401(k) og erstattede den med Vanguard Total Stock Market Index Fund (VTSMX).
"Vi mener, at (VTSMX) er den bedste proxy for det amerikanske marked, der tilbyder eksponering til store, mellemstore og small-cap aktier, mens Vanguard Institutional Index Fund koncentrerer sig om large cap aktier," sagde en talsmand til MarketWatch i bekræftelse af en Philadelphia Inquirer-rapport om ændringen.
VTI giver eksponering til mere end 3.600 aktier i alle størrelser – fra $783,4 milliarder Microsoft (MSFT) til $5,8 millioner Pernix Therapeutics Holdings (PTX) – giver investorer en meget mere omfattende eksponering til det amerikanske aktiemarked. Samtidig er VTI's beholdninger vægtet efter markedsværdi, hvilket betyder, at de største virksomheder stadig har størst indflydelse på ETF's resultater.
Resultatet? VTI'en præsterer meget på samme måde som VOO, slår den med et par basispoint nogle år, og falder lidt bagud i andre. Det er også en af de billigste fonde, du kan købe:For en skinflint på 0,04 % i udgifter betaler du kun 4 USD årligt for hver investeret 10.000 USD.
Lær mere om VTI på Vanguard-udbyderens websted.
Som tidligere nævnt har finansielle eksperter en bred vifte af meninger om, hvordan 2019 kan blive – og ikke alle er rosenrøde. Så de bedste ETF'er for 2019 kan være dem, der simpelthen taber mindst.
Gå ind i lavvolatilitets-ETF'er, som var tale om Wall Street i det sidste kvartal af 2018. Disse fonde retter sig mod aktier, der har tendens til at bevæge sig mindre drastisk end det bredere marked – en vigtig egenskab, når det bredere marked er på vej ned. Sagen er, at den slags fonde også kan halte markederne på vej op igen. Men Legg Mason Low Volatility High Dividend ETF (LVHD, $29,32) hjælper med at udligne noget af forskellen ved at levere høj indkomst oven i en mere stabil prisydelse.
LVHDs portefølje består af et sted mellem 50 og 100 aktier, der ikke kun har lavere volatilitet, men også højere udbytte. ETF'en screener et univers af 3.000 aktier for virksomheder, der betaler "relativt høje bæredygtige udbytteudbytter." Det scorer derefter deres aktier højere eller lavere baseret på pris- og indtjeningsvolatilitet. Derfra begrænser den enhver akties vægt ved rebalancering til 2,5 % og enhver sektors vægt til 25 % (undtagen ejendomsinvesteringsforeninger, som aldrig kan overstige 15 % af fonden). Disse procenter kan bevæge sig mellem rebalancering, efterhånden som aktierne stiger og falder.
Legg Mason Low Volatility High Dividend er i øjeblikket tungest i to lavvolums grundpiller – forsyningsselskaber (26,4 %) og forbrugsvarer (18,2 %) – med yderligere tocifrede beholdninger i fast ejendom (15,0 %) og forbrugsgoder (10,3 %). Topbeholdninger er en hvem er hvem af bundsolide virksomheder, såsom McDonald's (MCD), Kimberly-Clark (KMB) og elselskabet Duke Energy (DUK).
Hvor effektiv er denne strategi? Nå, i løbet af det rodede fjerde kvartal af 2018 tabte Legg Masons fond kun 5,42 %, mens S&P 500 faldt med 13,52 % ifølge data fra Morningstar.
Lær mere om LVHD på Legg Mason-udbyderens websted.
Flere markedseksperter har givet udtryk for en præference for værdi frem for vækst i det kommende år. LPL Financial Research skriver:"Vi forventer, at værdien i 2019 vil drage fordel af den stigning i økonomisk vækst, der begyndte i midten af 2018, relativt attraktive værdiansættelser efter en vedvarende periode med vækstoverskridelse og vores positive syn på finanssektoren."
Men mens de fleste værdi-ETF'er overvejer målinger såsom pris-til-indtjening (P/E) eller pris-til-salg (P/S), vil investorer måske overveje en ny fond, der ser på værdien gennem en anden linse .
“Siderne om indtægtsgenkendelse er på 700 sider; 70 % af S&P rapporterer nu non-GAAP (generelt accepterede regnskabsprincipper) indtjening; GE udskrev fire forskellige versioner af ikke-GAAP EPS. Så hvis man bruger P/E til at sammenligne værdiansættelse på tværs af virksomheder, er det bare blevet sværere og sværere,” siger Thomas Cole, CEO og medstifter af Distillate Capital, en Chicago-baseret fundamental value-investeringsforvalter. "Så vi afgjorde i sidste ende på et mål for frit cash flow til virksomhedsværdi. Aktier, der ser de billigste ud i denne metrisk, overgår markedet. Aktier, der ser de dyreste ud, har en tendens til at underperforme.”
Destillate U.S. Fundamental Stability &Value ETF (DSTL, $23,60) har én ting til fælles med LVHD, idet de begge er designet til at reducere risikoen. DSTL gør det dog ved at udvælge aktier ved hjælp af det førnævnte værdimål og ved at undersøge virksomheder for langsigtet stabilitet (som inkluderer stabile pengestrømme og lav gældsgearing).
"Mange gange har Wall Street en tendens til at tænke på risiko og værdiansættelse i separate spande," siger Cole. "Du kan køre risikomodeller hele dagen lang, korrelation vs. aktier, hvordan kurserne ændrer sig, alle mulige scenarier ... men det meste af tiden foregår disse samtaler uden en samtale om, hvorvidt du betaler for meget for noget."
I øjeblikket er DSTL tungest i informationsteknologiaktier (31,9%). Faktisk er syv af de 10 største beholdninger teknologiaktier, inklusive topvægte Apple (AAPL), Microsoft og Alphabet (GOOGL). Fonden har også betydelige vægte i industrier (20,2 %), sundhedspleje (17,3 %) og skønsmæssige forbrugere (12,9 %).
* 12-måneders udbytte ikke tilgængelig; fond lanceret den 23. oktober 2018.
Lær mere om DSTL på Destillate Capital-udbyderens websted.
Investorer har længe hørt ordsproget "læg ikke alle dine æg i én kurv." Markedseksperter prædiker ofte fordelene ved porteføljespredning – ikke kun blandt amerikanske sektorer, men også geografisk.
"En globalt diversificeret portefølje - en, der lægger sine æg i mange kurve - har en tendens til at være bedre positioneret til at klare store år-til-år markedsudsving og give et mere stabilt sæt afkast over tid," skriver Anthony Davidow, CIMA, Vice President. , Alternativ Beta og Asset Allocation Strategist, Schwab Center for Financial Research.
Ligesom investorer kan få billig, bredt baseret amerikansk aktieeksponering med VTI, kan de eje en lang række globale aktier for ca. en øre på dollaren med Vanguard Total International Stock ETF (VXUS, $48,90). VXUS giver adgang til næsten 6.400 internationale aktier fra flere dusin lande – primært på tværs af det udviklede Europa (41,4 %), det udviklede Stillehav (29,9 %) og de nye markeder (21,3 %), såsom Kina og Indien.
VXUS får dig til at investere i næsten alle hjørner af verden, men det er igen ligesom VTI, idet de største virksomheder i verden har den største indflydelse på deres præstationer. Det betyder, at der er masser af tyngde fra europæiske blue chips såsom Nestle (NSRGY) og Royal Dutch Shell (RDS.A), samt voksende kinesiske teknologiske titaner såsom Tencent (TCEHY) og Alibaba (BABA).
Denne globale indeksfond er en top-ETF for 2019, fordi den tilbyder diversificering i et år, hvor succesfulde enkeltlandsvæddemål kan være særligt svære at gennemføre. Og den har også fået en plads blandt Kiplingers 20 bedste køb-og-hold ETF'er - Kip ETF 20 - takket være både dens høje kvalitet og snavsbillige 0,11 % udgiftsforhold.
Lær mere om VXUS på Vanguard-udbyderens websted.
Typisk vil udtrykket "udbyttevækst" signalere, at en fond besidder selskaber, der løbende øger deres udbytteudbetalinger. Det er ikke helt tilfældet med WisdomTree Global ex-U.S. Quality Dividend Growth Fund (DNL, 50,61 USD)
I stedet er DNL en international vækstaktiefond, der også ser udbytteprogrammer som et middel til at identificere kvalitet. Og selv om kvalitet burde være vigtig de fleste år, vil det være særligt vigtigt i et 2019, hvor den globale vækst aftager, og eksperter er blandede med hensyn til udsigterne for oversøiske aktier.
Fokus på udbytte resulterer ikke overraskende i en hovedsagelig storkapitalfond med en gennemsnitlig markedsværdi på 15 milliarder dollars. Bare forvent ikke frygtelig høj indkomst – dets udbytte er tæt på S&P 500.
Dette Kip ETF 20-valg identificerer "udbyttebetalende virksomheder med vækstkarakteristika i udviklede og nye aktiemarkeder, tidligere USA." Dets beholdninger spænder over 33 lande med betydelig vægt i Japan (12,8 %), Storbritannien (11,3 %), Sverige (7,0 %), Norge (6,8 %) og Schweiz (6,7 %). Topbeholdninger omfatter European Dividend Aristocrat British American Tobacco (BTI), norske telekom Telenor (TELNY) og det japanske halvlederselskab Tokyo Electron (TOELY).
Lær mere om DNL på WisdomTree-udbyderens websted.
Selvom det er godt at have et par brede markedsfonde for at holde skibet mere eller mindre på linje med markedet, kan du også bruge sektor- og industrifonde til at forsøge at generere "alfa" (i det væsentlige gør det bedre end indekset).
Grundlæggende siden den store recession har teknologisektoren været et vækstspil, der næsten ikke er gået glip af, takket være den stigende allestedsnærværende teknologi i alle facetter af hverdagen. Det er ikke kun den stigende brug af gadgets såsom smartphones, tablets og bærbare computere, men også spredningen af teknologi såsom halvledere og cloud-teknologi til alle andre områder, fra sundhedspleje til biler til husholdningsapparater.
Når det er sagt, solgte teknologiaktier rundet ud i sidste kvartal af 2018 som et sammenløb af modvind og usikkerhed, hvilket fik investorerne til at låse ind overskud. Stadig høje værdiansættelser kan få investorer til at gøre det samme i 2019, hvis volatiliteten stiger igen, hvilket er grunden til, at en konservativ takt kan betale sig her.
First Trust Nasdaq Technology Dividend Index Fund (TDIV, $33,94) er et spil på sektorens mere etablerede virksomheder. TDIV besidder næsten 100 udbyttebetalende teknologi- og telekommunikationsselskaber på 500 millioner USD i markedsværdi eller mere, der har passeret et par skærme, inklusive at levere mindst ét udbytte inden for de seneste 12 måneder og give mere end 0,5 %.
Fonden består af omkring 80 % teknologi og 20 % kommunikation og bruger en modificeret markedsværdivægtningsmetodologi, der tager hensyn til både markedsværdi og udbytteværdi, med lofter for at forhindre aktiekoncentrationer i at blive for høje. TDIV er stadig tungt vægtet i adskillige aktier – dets top 10-beholdninger, som omfatter 8 % plus vægte i Intel (INTC) og International Business Machines (IBM) – udgør 58 % af fonden.
Mange af TDIV's beholdninger er potentielle rebound-spil i 2019. Men selvom markedet forbliver ustadigt i 2019, burde denne ETF's meget bedre end gennemsnittet afkast give investorerne noget ballast.
Lær mere om TDIV på First Trust-udbyderens websted.
Hver anden uge læser du en historie om, hvordan maskinerne er ved at overtage verden, hvad enten det er robotter til medicinsk kirurgi, stærkt automatiserede fabrikker eller virtuelle assistenter, der infiltrerer stuen. Disse giver interessante historier (omend deprimerende, hvis du er bekymret for at holde fast i dit job) … men de giver også en fantastisk investeringsmulighed.
Robot- og automationsindustrien er fyldt med vækst. Technavio forventer, at det globale robotmarked vil mere end fordobles fra 32 milliarder USD i 2017 til mere end 77 milliarder USD i 2022. Mordor Intelligence forventer en sammensat årlig vækstrate på 24,52 % på det globale robotmarked mellem 2018 og 2023. Zion Market Research ser det globale automationsmarkedet rammer 321,9 milliarder dollars i 2024 – op fra 2017,2 milliarder dollars i 2017. Tallene varierer, men retningen er klar:Det er op.
Robo Global Robotics &Automation Index ETF (ROBO, $34,05) er en såkaldt "tematisk" ETF, der spænder over flere sektorer/industrier for at tackle en enkelt trend. I dette tilfælde er det den øgede afhængighed af automatisering og robotteknologi på den amerikanske arbejdsplads og videre.
ROBO, som har indsamlet mere end 1 milliard dollars i aktiver siden starten i 2013, er en 94-beholdningsportefølje med en 50-50 split. Halvdelen af vægten går til virksomheder, der nyder godt af automatisering, såsom fremstilling og industri (15%), sundhedspleje (10%) og logistikautomatisering (9%). Den anden halvdel går til de teknologier, der driver disse ændringer, herunder databehandling, behandling og kunstig intelligens (19 %), aktivering (12 %) og sensing (12 %). Beholdninger omfatter f.eks. FLIR Systems (FLIR), som designer ting såsom termiske billedkameraer og billedsensorer; Brooks Automation (BRKS), som leverer automations- og instrumenteringsudstyr; og Intuitive Surgical (ISRG), som vi har præsenteret som en af 2019s bedste sundhedsaktier på grund af dens voksende allestedsnærværende; mere end 1 million procedurer blev udført med da Vinci Surgical System-maskiner i 2018.
"Vi er midt i et robotvåbenkapløb," sagde William Studebaker, præsident og CIO for fondsudbyderen ROBO Global, i 2018. "Dette er teknologier, som virksomheder skal investere i for at forblive relevante. Når man ser på tværs af alle brancher, accelererer investeringstempoet kun.”
Lær mere om ROBO på ROBO Global udbyders websted.
SPDR S&P Biotech ETF (XBI, $80,12) er en fantastisk måde at investere i det bioteknologiske område af flere grunde – blandt dem den "dydige cyklus" af bioteknologiske M&A.
Ofte, når en ETF sporer et indeks, forlader virksomheder det indeks ved at "falde ud". For eksempel kan deres aktie falde (vejer fondens præstation) til det punkt, hvor deres markedsværdi ikke er stor nok til at forblive i indekset. Men en anden måde, en aktie kan forlade et indeks på, er, hvis den pludselig bliver købt ud - og typisk vil det indeks drage fordel af det pludselige ryk i aktiekursen takket være frikøbspræmien. Den aktie skal så erstattes - normalt af en up-and-comer, der er på vej i den rigtige retning (op).
XBI er en portefølje af 120 bioteknologiaktier, der bruger en modificeret ligevægtet metode. Så i stedet for de fleste cap-vægtede fonde, hvor de største aktier har størst indflydelse, tillader XBI biotekaktier af alle størrelser - store, mellemstore og små - at have lignende indflydelse på fonden. Som et resultat heraf inkluderer top 10-beholdningerne $7 milliarder Loxo Oncology (LOXO) … samt $61 milliarder Celgene (CELG), som for nylig steg i vejret på et buyout-bud fra Bristol-Myers Squibb (BMY) og skal udskiftes i XBI's indeks, hvis handlen går igennem.
XBI er ikke kun bedre positioneret til at drage fordel af den "dydige cyklus" af M&A (som typisk involverer meget mindre virksomheder end Celgene), men også fra de større aktiespring, som mindre biotekaktier nyder godt af på succeser med lægemiddelforsøg. Den negative bagside, man skal være opmærksom på, er selvfølgelig, at de kan lide under de større ned-huller, når et forsøg kommer til kort.
Som en særlig omtale her:Investorer, der leder efter en mere afbalanceret sundhedsfond, bør overveje Invesco S&P 500 Equal Weight Health Care ETF (RYH) – et Kip ETF 20-valg, som du kan læse mere om her.
Lær mere om XBI på SPDR-udbyderens websted.
Den amerikanske økonomiske vækst kan være klar til at aftage i 2019, men det er stadig ekspansion, og amerikanerne fortsætter med at se deres løn vokse, mens de stort set bærer en lidt lavere IRS-byrde efter slutningen af 2017's skatteeftersyn. Det er gode nyheder for den skønsmæssige forbrugersektor som helhed – hvis amerikanerne har ekstra penge at bruge, er det disse produkter og servicevirksomheder, de sandsynligvis vil bruge dem på.
Men ikke alle forbrugeraktier er bygget ens. For eksempel bliver murstens-og-mørtel-indkøbscentret hurtigt tyndet ud – Sears (SHLDQ) er på randen af udryddelse, JCPenney (JCP) nåede penny-stock-status sidste år og Macy's (M), som vendte tilbage sidste år, viste tilbagegang for at starte 2019 ved at rapportere om en svag ferieperiode. Derfor skal en skønsmæssig ETF af høj kvalitet placeres korrekt i de "rigtige" aktier.
John Hancock Multifactor Consumer Discretionary ETF (JHMC, $29,73) er i øjeblikket stærkt vægtet i mange af de bedst placerede forbrugerspil. The JHMC tracks a multifactor index that emphasizes “factors (smaller cap, lower relative price, and higher profitability) that academic research has linked to higher expected returns.”
Tops among JHMC’s 145 holdings are the likes of Amazon.com (AMZN), the ubiquitous e-commerce play that continues to grow by double digits and also benefits from the expansion of cloud computing; Home Depot (HD) and Lowe’s (LOW), whose home-improvement businesses have so far remained mostly shielded from Amazon’s sprawl; and media and entertainment darling Walt Disney (DIS).
But what’s also attractive about JHMC is how many of its larger weights go to companies that can still do well even if Americans’ spending is crimped. Amazon boasts deep retail discounts, as well as its cost-saving Prime program (TV, movies, music and free shipping for $119 per year); McDonald’s is the king of cheap fast food; and Dollar General (DG) plays to the tightest of budgets.
Learn more about JHMC at the John Hancock provider site.
Oil prices looked like they would celebrate a considerable win for much of 2018. However, West Texas Intermediate and Brent crude oil tanked in the final quarter over concerns about weak global demand, a supply glut and the inability for OPEC cuts to stabilize the energy market.
But several analysts believe oil will rebound in 2019. That includes BofA Merrill Lynch, which said in its 2019 look-ahead, “The outlook for commodities is modestly positive despite a challenging global macro environment. We forecast Brent and WTI crude oil prices to average $70 and $59 per barrel, respectively in 2019.” Those figures would translate into respective gains of 30.1% and 25.2% compared to their final 2018 prices.
But some energy companies are more sensitive to changes in commodity prices – including exploration and production (or “upstream”) firms. These companies are responsible for the relatively higher-risk business of finding, extracting, producing and selling oil and gas. These companies each have a “breakeven price” – how much a barrel (oil) or million BTUs (natural gas) must sell for to cover the costs of production; prices above that line result in profits, while prices below result in losses.
The SPDR S&P Oil &Gas Exploration &Production ETF (XOP, $30.42) is the largest E&P-focused ETF on the market. XOP tracks a modified equal-weighted index of exploration and production firms that ensures large, mid- and small-cap stocks all have decent representation in the fund, and also makes sure no one stock dominates the ETF’s performance. For instance, $2.0 billion QEP Resources (QEP) is the top weight in the fund at 2.13%, while $17.1 billion Diamondback Energy (FANG) is No. 8 at 1.95%.
Because of its price sensitivity to oil, XOP tends to crater harder than broader energy funds such as the Energy Select Sector SPDR ETF (XLE) when energy dips; XOP fell 39.3% in the final quarter of 2018 compared to 25.3% for the XLE. But it also tends to gain much more when energy prices are on the upswing, making it a better play on a 2019 rebound.
Learn more about XOP at the SPDR provider site.
Another magnified play on the price of energy is the Invesco S&P SmallCap Energy ETF (PSCE, $10.21) – a tight portfolio of 37 small-cap energy stocks that average less than $2 billion in market value, compared to nearly $19 billion for the XOP.
In general, small-cap stocks tend to have higher growth prospects thanks to the law of large numbers (it’s much easier to double revenues from, say, $1 million than it is to double them from $1 billion). But they’re also naturally riskier, typically boasting narrower operations and having far less access to capital than their larger-cap brethren.
PSCE does hold some refining and pipelines businesses that aren’t as clearly tied to the price of oil and gas. However, it also holds E&P firms, and most importantly, more than half its portfolio (53%) is made up of equipment and services companies that also tend to be sensitive to energy prices. It’s also more lopsided, with six stocks at weights of 4% or more, including PDC Energy (PDCE) at a significant 8.4%. So single-stock risk is more of a concern here.
But if you go into PSCE with your eyes open, you can do well in an energy-market upturn. Even the first couple of weeks of 2019 have been kind to this fund, which has ripped off 16.5% gains compared to 7.8% for the XLE.
Learn more about PSCE at the Invesco provider site.
Real estate investment trusts (REITs) were created by law in 1960 as a way to open up real estate to individual investors. REITs typically own and operate real estate and are exempted from federal taxes … but in exchange must pay out at least 90% of their taxable income to shareholders in the form of dividends. This makes them very popular with income seekers, though as a result they also tend to struggle a bit when interest-rates rise (or when investors believe they will rise).
But the landscape for REITs is becoming a little friendlier. The Federal Reserve has already signaled a slower pace of interest-rate hikes in 2019, and recent comments from various Fed officials have displayed a more dovish stance.
The Vanguard REIT ETF (VNQ, $77.49) is the largest REIT ETF in existence, with its $28.8 billion in assets under management dwarfing the next-closest competitor, the Schwab US REIT ETF (SCHH, $4.6 billion in AUM). That’s thanks in large part to its long life (inception in 2004) as well as its 0.12% expense ratio, which is 90% lower than the average fees of similar funds.
VNQ holds a wide basket of roughly 190 REITs that covers the spectrum of real estate, from apartment buildings and offices to malls, hotels and hospitals. In this ETF, you’ll find companies such as communications-infrastructure play American Tower (AMT), mall owner and operator Simon Property Group (SPG), self-storage specialist Public Storage (PSA) and data center REIT Equinix (EQIX).
Investors should note that VNQ’s current yield of 4.7% sits at the very high end of its 10-year range.
Learn more about VNQ at the Vanguard provider site.
The Invesco KBW Premium Yield Equity REIT Portfolio (KBWY, $30.17) is one of the best ETFs to buy if you’re looking for a high current yield. VNQ’s payout is great compared to most equity funds, but KBWY’s, at well north of 8%, is downright gaudy.
Just understand that you typically don’t earn dividend yields that high without some added measure of risk.
The KBWY holds a cluster of just 30 small- and mid-cap REITs that include the likes of Office Properties Income Trust (OPI), which leases office space to government entities and other high-quality tenants; and MedEquities Realty Trust (MRT), which owns acute-care hospitals, short-stay and outpatient surgery facilities, physician group practice clinics and other health-care properties. It’s a concentrated portfolio, too, with more than a quarter of all assets piled into just the top five holdings.
These REITs offer higher yields in part because of their higher risk profiles. However, this ETF’s yield also has ballooned thanks to rough losses over the past couple years; the fund has declined nearly 20% since the start of 2017. (Yields, after all, are just dividends divided by the share price, so as the share price shrinks, yields grow.)
But KBWY investors may be richly rewarded with a 1-2 punch of performance and income should REITs in general outperform in 2019.
Learn more about KBWY at the Invesco provider site.
While most sector, industry and thematic ETFs tend to be U.S.-centric, investors can also get global (U.S. and international) and even purely international exposure to specific businesses and trends.
That said, a disclosure, and a mea culpa:EMQQ was in fact a recommendation in last year’s list of the best ETFs for 2018 … and it was a dog, dropping roughly 30%.
What went wrong?
Emerging markets broadly sold off hard last year amid China’s trade war with the U.S. and worries about a slowdown in growth across numerous major global markets – including China, which is home to more than 60% of EMQQ’s holdings. Top EMQQ holdings such as Chinese e-commerce play Alibaba, China search specialist Baidu (BIDU) and Russian internet company Yandex (YNDX) all produced several earnings beats last year and have analysts projecting breakneck growth ahead. But many of these stocks had reached high valuations after red-hot runs, and so despite fundamental strength in their underlying companies, they pulled back precipitously as investors locked in profits amid the uncertainty.
If emerging markets (and especially China) struggle once more in 2019, EMQQ will pay the price. But a resolution to the U.S.-China trade spat, as well as any better-than-expected economic growth in EMs, should light a fire under this ETF.
Learn more about EMQQ at the EMQQ provider site.
2018 was a breakout year for the budding (sorry) marijuana industry.
A growing tide, here and abroad, is bringing cannabis to the mainstream. Roughly two-thirds of the U.S. have legalized marijuana use for at least medical, if not recreational, purposes. That’s roughly the same ratio as the mix of Americans who are in favor of legalizing marijuana, according to a 2018 Gallup poll. Meanwhile, Canada last year became the largest legal marketplace for marijuana.
All this has stirred up a hornet’s nest of activity in medical marijuana companies. Canadian pharmaceutical and cannabis company Tilray (TLRY) spiked by well more than 800% year-to-date at one point in 2018, and spent December forging partnerships with Swiss pharma giant Novartis (NVS) and mega-brewer Anheuser-Busch InBev (BUD). Beer, wine and spirits titan Constellation Brands (STZ), which took a 9.9% stake in major cannabis producer Canopy Growth (CGC) in October 2017, quadrupled down on its bet with a $4 billion investment in 2018 to up its stake to 38%. Marlboro maker Altria (MO) spent $1.8 billion to buy a 45% interest in producer Cronos Group (CRON) late last year.
Clearly, marijuana is becoming big business, with plenty of fortunes to be made. But Wall Street analysts are only really beginning to scour this industry, so mom-and-pop investors are fairly short on reliable information. You could try to pick from among marijuana stocks. Or you could spread your bet across several companies via the ETFMG Alternative Harvest ETF (MJ, $31.29).
MJ has actually been around for a few years, racking up a respectable $770 million or so in assets under management since inception in 2015. The fund has 37 holdings – a wide array for such a relatively new industry – though it’s extremely top-heavy. At the moment, Cronos makes up 13.4% of net assets, Canopy Growth another 8.8%, Tilray 7.6% and Aurora Cannabis 7.4%.
Other top holdings include some interesting takes on the cannabis space, including organic cannabis producer Green Organic Dutchman (TGODF), medical marijuana producer CannTrust Holdings (CNTTF) and GW Pharmaceuticals (GWPH), whose multiple sclerosis treatment Sativex was the first cannabis-based drug to gain FDA approval.
Learn more about MJ at the ETFMG provider site.
Investors looking for protection sometimes look to bonds, which typically don’t produce the caliber of growth that stocks offer, but can provide decent income and some sort of stability.
That said, the rising-rate environment of the past couple of years has weighed down bonds and bond funds, as bond prices and yields move in opposite directions. And an uncertain year ahead for bonds, given the Federal Reserve’s shifting stance, means that investors may need a defter touch than what a basic index fund can provide.
The portfolio breakdown is certain to change over time as market conditions fluctuate. But as of this writing, nearly half of TOTL’s assets were invested in mortgage-backed securities (MBSes, 49.7%), another 19.8% was placed in U.S. Treasuries and 8.5% was in EM debt. TOTL also holds commercial MBSes, bank loans, investment-grade corporate bonds, junk debt and asset-backed securities.
The ETF’s bonds are high in quality, with nearly 69% of the fund’s debt earning the highest possible credit grade (Aaa). Only 19% of the holdings have junk status or are unrated. And the duration of 4.3 years implies that a one-percentage-point increase in interest rates would cause the ETF to decline by about 4.3%.
Investors at the moment are earning a substantial 3.6%, not to mention harnessing the brainpower of sub-adviser DoubleLine Capital in navigating future changes in the bond market.
* SEC yield reflects the interest earned after deducting fund expenses for the most recent 30-day period and is a standard measure for bond and preferred-stock funds.
Learn more about TOTL at the SPDR provider site.
Investors who are particularly worried about interest-rate hikes wreaking havoc in the fixed-income part of their portfolio can turn to the Pimco Enhanced Low Duration Active Exchange-Traded Fund (LDUR, $98.68) – another active bond fund among the ranks of the Kip ETF 20.
This fund is helmed by Pimco veterans Hozef Arif, David Braun and Jerome Schneider, who boast a combined 62 years of investment experience. Their task is to keep duration low, which will keep the fund from moving much when interest rates change. An effective duration of just 1.3 years across the portfolio means that a one-percentage-point change in interest rates would cause the portfolio to lose a mere 1.3%.
Often, shorter-term bonds offer skimpier yields, but LDUR is able to offer a nice payout of 3.7% thanks to its holdings in mortgage-backed securities, investment-grade corporates and EM debt.
Learn more about LDUR at the Pimco provider site.
Gold bulls will tout several benefits of investing in the yellow metal. It’s certainly an uncorrelated asset that doesn’t move perfectly with or against the stock market, and it’s often thought of as a hedge against inflation, as well as a safe haven against economic and political uncertainty. Plenty of experts will tell you, in fact, that most portfolios could use a 1% to 5% allocation in gold for added diversification.
Gold is off to its worst start to a year since 2013, but a few experts do think the metal still could rise in 2019. One of the biggest drivers is the U.S. dollar – gold is priced in dollars, so if the currency gains in value, that actually depresses the price of an ounce of gold. However, certain potential outcomes in 2019, such as the Federal Reserve pulling back the throttle on interest-rate hikes, could suppress the dollar, and thus help out gold.
“We see gold likely repricing lower through the middle of next year, at which point the Fed’s policy will move into restrictive territory,” writes Natasha Kaneva, Head of Metals Research &Strategy at JPMorgan, in the analyst firm’s 2019 gold outlook. “The curve will invert, the expansion will slow and expectations of Fed easing will build. At this juncture, we would expect real rates to move lower and gold’s fortunes to reverse, as gold tends to benefit from consistent drop in real yields during the lead up to recessions and thereafter.”
But physically holding real gold is an expensive chore – you have to get it delivered, have somewhere to store it and insure it, not to mention the costs associated with finding a buyer and unloading it when you want to sell. Thus, many investors tend to invest in gold via ETFs instead.
Shares of the GraniteShares Gold Trust (BAR, $128.83) represent 1/10th of an ounce of physical gold stored in vaults, so it’s a very direct way to participate in any upside in gold.
The GraniteShares Gold Trust also is the cheapest option on the market – again. BAR actually came to market in August 2017 as the cheapest such ETF with an expense ratio of 0.2%, but in June 2016, SPDR launched the SPDR Gold MiniShares Trust (GLDM) at just 0.18%. BAR took over as the low-cost leader by lowering its fees to 0.17% in October 2018.
Learn more about BAR at the GraniteShares provider site.
The market doesn’t go up forever. Investors learned that the hard way in the final quarter of 2018, when the Nasdaq fell into bear-market territory (a drop of at least 20% from a high), and the S&P 500 and Dow Jones Industrial Average came within a hair of snapping their nine-year bull runs.
For the most part, it simply pays to have a long-term buy-and-hold plan and simply stick with it through thick and thin, collecting dividends along the way and remaining with high-quality holdings that should eventually rebound with the rest of the market. In an environment in which everything seems doomed to go down, however, you might feel pressured to cut bait entirely. But if you do that, you risk missing out on a recovery, absorb trading fees and may lose out on attractive dividend yields on your initial purchase price.
Another option? Keep all your holdings and wait it out with a simple hedge in place.
The ProShares Short S&P500 ETF (SH, $30.44) provides the inverse daily return of the S&P 500, which in short means that if the S&P 500 declines by 1%, the SH should gain 1%.
This is not a buy-and-hold-forever fund. However, by adding this fund to your portfolio when the outlook is grim, you can help offset some of the losses to your long holdings during a down market. The natural trade-off is that if you’re still holding SH when the market recovers, you’ll blunt some of your portfolio’s gains. But that’s the risk you need to understand and accept if you want to use a protective hedge such as this.
Learn more about SH at the ProShares provider site.
Kyle Woodley was long EMQQ as of this writing, and has traded SH within the past three months.