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December Rate Hike May Boost These ETFs

As expected, the U.S. Federal Reserve kept interest rates the same but remained upbeat on U.S. economic progress. The Fed is also satisfied with the strengthening of the labor market, giving signals of a December rate hike.

This is especially true given that the first reading of the U.S. GDP for the third quarter rose 3.0% year over year in the July-September period, after increasing at a 3.1% clip in the second. The reading beat 2.5% growth forecast. The stellar growth was attained despite two consecutive hurricanes in the third quarter.

Overall, the prevalent bet over the December Fed rate hike was intact. There is about a 92% chance that the Fed will act in December. Responding to the Fed meeting, PowerShares DB US Dollar Bullish ETFUUP was up about 0.2% on Nov 1.

The fund gained about 0.04% after hours. SPDR Gold SharesGLD , which tracks the gold bullion, gained about 0.4% on Nov 1 as there was no new hawkishness in Fed statements. Yields on 10-year benchmark treasury bonds declined to 2.37% on Nov 1 from 2.38% the day before.

The broader U.S. markets are steady with PowerShares QQQ ETFQQQ losing just about 0.03%, SPDR S&P 500 ETFSPY and SPDR Dow Jones Industrial Average ETFDIA adding about 0.13% and 0.24% on Nov 1, respectively. Cooperate earnings regulated Wall Street more than the Fed.

Below we highlight a few ETFs that could be gainful ahead.

WisdomTree Japan Hedged Dividend Growth ETFJHDG

The fund measures the performance of dividend-paying common stocks of Japan with growth characteristics while at the same time neutralizing exposure to fluctuations between the yen and the U.S. dollar. It yields 2.13% annually (read : Japan ETFs in Focus as Shinzo Abe Wins ).

FlexShares Quality Dividend Index ETF QDF

One can also take a look at the ETF options that are relatively safe and can help investors in the upcoming trading sessions that are likely to be riddled with Fed, Trump, overvaluation and earnings risks. The fund looks to provide exposure to the growth potential of U.S. securities while offering dividends. The fund yields about 2.81% annually (read: Prepare for Uncertainty with These "Quality" ETFs ).

VanEck Vectors Morningstar Wide Moat ETF MOAT

The fund follows an index which tracks the overall performance of the " attractively priced companies with sustainable competitive advantages." As a result, this fund also calls for quality exposure.

PowerShares S&P 500 ex-Rate Sensitive Low Volatility ETF XRLV

If the Fed hike bets get stronger or the central bank actually acts in December, this equity ETF may come to your rescue. XRLV takes care of both interest rate issues and volatility factors. This fund focuses on at 100 of the S&P 500 components that exhibit both low volatility and low interest rate risk (read: ETF Tricks to Stave Off Rising Rate Risks This Halloween ).

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SPDR-DJ IND AVG (DIA): ETF Research Reports

NASDAQ-100 SHRS (QQQ): ETF Research Reports

GOLD (LONDON P (GLD): ETF Research Reports

SPDR-SP 500 TR (SPY): ETF Research Reports

PWRSH-DB US$ BU (UUP): ETF Research Reports

PWRSH-SP5 XRATE (XRLV): ETF Research Reports

WISTR-JP HQD (JHDG): ETF Research Reports

VANECK-MS WD MT (MOAT): ETF Research Reports

FLEXS-QLTY DIV (QDF): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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