Valentine's Day is around the corner and let's do something different this year. While accessories, dresses, gadgets and flowers are popular gifts for this day, gifting an ETF could be a great idea for money is honey, after all!
This is a great idea especially as Wall Street bulls have come roaring back this year on signs of progress in U.S.-China trade negotiations, a dovish Fed and a strong labor market.
Additionally, a rebound in oil price on falling production and OPEC-led fresh crude output cuts supported the risk appetite. However, uncertainty lingers with the still-unresolved U.S.-China trade war, global growth concerns, geopolitical tensions and Brexit (read: ETF Investing 2019: Best Ideas & Trends ).
Here are the five ETFs in which investors could stash their cash in the season of love. We have dug into the heart and soul of these ETFs that could bring market-beating returns this year:
ETFMG Alternative Harvest ETF MJ
The marijuana industry is burning hot due to easing regulations on the once highly guarded drug, marijuana, for recreational and medical usage. In fact, Canada's legalization of recreational cannabis among adults has spread strong optimism into the space. Additionally, a number of states in the United States joined the race of marijuana legalization. Congress, the White House and U.S. regulators have also softened their stance on the drug's legalization.
Against this backdrop, marijuana ETF is rising and is expected to continue doing so. The fund tracks the Prime Alternative Harvest Index, designed to measure the performance of companies within the cannabis ecosystem, benefiting from global medicinal and recreational cannabis legalization initiatives. It holds 40 securities in its basket and Canadian firms make up for 62% of the portfolio, while American firms comprise 31%. The ETF has AUM of $982.5 million and trades in a good volume of around 974,000 shares. It charges 75 bps in annual fees (read: Marijuana ETF Joins Billion Dollar Club ).
Schwab US REIT ETF SCHH
With the central bank indicating a pause in the rate hike cycle after four lift-offs last year, real estate ETFs look to outperform. In fact, these ETFs are surging, with most of them hitting one-year highs lately. The domestic economy is booming with strong job growth and higher consumer spending, thereby brightening the prospect of the real estate sector. This is because growth in the economy translates into greater demand for real estate, higher occupancy levels and landlords' greater power to ask for higher rents.
SCHH tracks the Dow Jones U.S. Select REIT Index, holding a well-diversified 101 stocks with none accounting for more than 8.5% of assets. The product has AUM of $5.1 billion and average daily trading volume of 935,000 shares. It charges 7 bps in annual fees and currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: A Pack of ETFs to Buy for 2019 ).
iShares Core MSCI Emerging Markets ETF IEMG
After a weak 2018, emerging market ETFs are poised for strong performance this year on a dovish Fed that will keep U.S. dollar at check. Additionally, hopes over the trade deal between the United States and China as well as stimulus in China's economy have raised the appeal for these stocks. The beaten down prices have also made products targeting emerging nations compelling bets (read: 4 ETF Areas Getting All Love in Valentine Month ).
IEMG is among the most popular ETF with AUM of $57.5 billion and average daily volume of around 20 million shares. It offers exposure to a broad range of 2230 emerging market securities, with each accounting for less than 4.5% of the assets. China takes the largest share at 29.2% while South Korea and Taiwan also receive double-digit exposure each. The ETF charges 14 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
SPDR Gold Trust ETF GLD
The year 2019 seems perfect for the yellow metal thanks to Fed actions that raised the appeal for gold. Lower interest rates will continue to weigh on the dollar against the basket of currencies, raising the yellow metal's attractiveness as it does not pay interest like fixed-income assets. Additionally, global headwinds will continue to boost demand for the metal as a great store of value and hedge against market turmoil.
While there are several choices in the space, the ultra-popular GLD could be the ultimate gift for your Valentine. This is the largest and most-popular ETF in the gold space with AUM of $33.9 billion and average daily volume of around 8.3 million shares. The fund tracks the price of gold bullion measured in U.S. dollars, and kept in London under the custody of HSBC Bank USA. Expense ratio comes in at 0.40%. The fund has a Zacks ETF Rank #3 with a Medium risk outlook (read: Four Solid Reasons to Buy Gold ETFs Now ).
Vanguard Dividend Appreciation ETF VIG
Bouts of volatility and uncertainty make dividend ETFs excellent picks. This is because dividend-focused products offer safety in the form of payouts and stability as mature companies are less volatile to the large swings in stock prices. The companies that pay ou t dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Investors should note that dividend-paying securities are the major sources of consistent income, when returns from the equity market are at risk.
VIG is the largest and most-popular ETF in the dividend space with AUM of $31.3 billion and average daily volume of about 1.2 million shares. The fund follows the Nasdaq US Dividend Achievers Select Index, which is composed of high-quality stocks that have a record of raising dividends every year. It holds 182 securities in the basket with none accounting for more than 4.50% share each and charges 8 bps in annual fees. The product has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
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