America has seen 522 years since Christopher Columbus landed on its shores. In 1792, New Yorkers celebrated the 300 th anniversary of this major geographical discovery and in 1937; Columbus Day became a federal holiday .
The country has seen many upheavals since then with wars, natural calamities and recessions. Yet it tided over every time and emerged as the World's biggest economy and has managed to stay so. But has this Columbus Day been able to set a more festive mood from an economic perspective? Let's find out.
After six-years of struggle following the sub-prime crisis, the Fed's generosity and accommodative economic policies helped the U.S. to regain its lost ground. The S&P 500 has surged more than 50% in these six key years. If this was not enough, the S&P has managed to cross the 2,000 mark this year. Most of the economic data, of late, are on the brighter side.
In fact, the convincing growth scenario has led the Fed to withdraw its monetary stimulus with this being the last month to enjoy such support. The greenback is hovering around multi-year highs against several other developed market currencies including yen and euro. To add to this, Asian markets and emerging economies, which are deemed high-growth ones, are also pinning hopes on cheap money flows from the U.S.
The IMF reduced the global economic forecast from 3.4% to 3.3% for this year and from 4% to 3.8% for the next, citing persistent weakness in the Euro zone, Japan as well as key emerging and developing markets like China, Brazil, Russia and the Middle East.
On the other hand, speculations are rife about the hike in key interest rates in the U.S., sometime next year, though the Fed has repeatedly vowed to keep the rates low for a considerable time. Still, some expect a long-feared correction to hit the market soon (read: Endure Market Volatility with These ETFs ).
In such a situation, it would be prudent to focus on some of the top-ranked but overlooked U.S. ETFs which could be great picks on Columbus Day. We are rediscovering for you some overlooked ETFs as most well-known stocks and ETFs are already capped by investors.
Also, bonds, especially the long-term ones, are the talk of the market right now. But we refrain from this asset class as the stock market remains open on Columbus Day while the bond market remains closed (read: 3 Mega Cap ETFs Beating the Market ).
Below, we have discovered three overlooked U.S. ETFs that investors could consider in their portfolios on this special occasion.
RAFI Fundamental Pure Small Growth Portfolio (PXSG)
As the U.S. economy is gradually stabilizing, a focus on small-cap ETFs would be decent idea. This capitalization level normally revolves around domestic stocks and remains less ruffled by foreign events (read: Guide to Small Cap Growth ETFs Investing ).
The ETF follows the RAFI Fundamental Small Growth Index and holds 423 securities in its portfolio. PXSG looks unpopular and illiquid in the small cap space with AUM of $28.4 million and paltry average daily volume of under 3,000 shares. Expense ratio comes in at 0.41%, much higher than its other cousins.
None of the individual components makes up for more than 1.37% share in the basket. From a sector perspective, financials occupies the top position at 27.9%, while information technology (21.4%) and consumer discretionary (13.5%) round off the top three spots.
The ETF has lost about 4.5% in the year-to-date time frame. Notably, this was the best performance for the Small Cap Growth Equities ETFs. PXSG has Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
iShares Russell Top 200 Value ETF (IWX)
We also have choice for the risk-averse investors. Large-cap value ETFs satisfy the needs for investors who fear taking excessive risks.
This ETF tracks the Russell Top 200 Value Index and offers pure exposure to the large cap value segment of the U.S. equity market. Holding 63 stocks in its basket, the fund provides a nice balance across each security and prevents heavy concentration.
The product has accumulated around $150 million in its asset base since inception in 2009 and charges 0.20% in expense ratio. IWX has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. IWX is up about 5.3% in the year-to-date frame.
S&P 500 Aristocrats ETF (NOBL)
Thanks to the ultra-low interest policies in the U.S. and the different corners of developed world, investors will definitely long for regular dividend income along with capital appreciation. NOBL will quench investors' yield thirst (read: Guide to Dividend Aristocrat ETFs ).
NOBL is not a billion-dollar ETF like Vanguard Dividend Appreciation ETF (VIG), iShares Dow Jones Select Dividend Index Fund (DVY)andSPDR S&P Dividend ETF (SDY), but has outperformed these dividend giants in the last one month.
NOBL is a newly launched ETF having celebrated its first birthday a few days back. It has amassed around $250 million in its asset base so far. Its expense ratio is 0.35% while average daily volume is low at around 40,000 shares. The product provides exposure to the companies that have raised dividend payments annually for at least 25 years by tracking the S&P 500 Dividend Aristocrats.
The fund is widely diversified across various securities. From a sector look, about two-fifth of the portfolio is dominated by consumer staples. Though NOBL lost about 1.01% in the last four weeks, it delivered the third best performance in the dividend ETF space. The fund has a Zacks ETF Rank #2
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