7 Sectoral ETFs Recommended for Allocation During a Recession (2)
What are the advantages of investing in a gold ETF?
1. Convenient trading. Listed on the stock exchange, like ordinary shares of a listed company, investors can use FuTao during trading hours according to the market price. The account can trade gold ETFs, and can also set up market orders, limit orders and stop loss orders for gold ETFs.
2. Backed by physical gold. Each gold ETF is backed by physical gold, eliminating counterparty risk.
3. Cost-effective. If you buy and store physical gold, you need to buy insurance for the gold, which is much higher than the transaction cost of buying and selling gold ETFs.
4. Liquidity. Gold ETF is an open-end fund structure, allowing investors to purchase or redeem gold according to their needs, while a dealer system is in place to increase the liquidity of the ETF. Circulation.
5, with transparency. Physical gold can be traded over-the-counter 24 hours a day and has real-time market data. Prices, ownership and net asset value of gold ETFs, as well as relevant data of the entire gold market, can be found on the gold ETF website. Daily View.
Risk Factors
1. Gold market risk: ETFs are directly related to the price of gold, and fluctuations in the price of gold can have a significant impact on the value of GLD. The ETF does not attempt to protect itself from gold price fluctuations by buying or selling gold, nor does it take advantage of gold price fluctuations to make a profit. Therefore, if the price of gold falls, the value of the ETF's shares will fall in proportion to the fall in the price of gold.
2. GLD's gold holdings may be at risk of loss, destruction, theft or access restrictions. As ETFs do not insure their gold, in the absence of a third party assuming liability, the ETF holder may or will Losses are suffered.
3. GLD does not generate any income and investors realize profits or losses as a result of changes in its price. As GLD is required to sell gold periodically to cover its ongoing expenses, the price of each share, regardless of whether the share price rises or falls in line with the price of gold, is not a profit or loss. The amount of gold represented by GLD shares will all continue to decrease. Even in times of low gold prices, GLD may still need to sell gold.
Suitable people
The GLD is suitable for most investors, and investors with the following investment needs may wish to consider investing.
1.short term speculation: hope to catch the short term gold price of a single upward trend
2.risk hedging: bought gold bearish class derivatives, short-term by investing in GLD, hedge risk
3. stock market is highly volatile, hoping to hedge stock market risk
4.Low risk appetite, want to diversify the investment portfolio
Pioneer Utilities ETF (VPU)
Investing in the utilities sector is another defensive move if you're concerned about the impact of the recession on your portfolio. Consumers need to keep the lights on and the water running.Vanguard Utilities ETF is an index fund. Designed to track the performance of the MSCI USA IMI Utilities 25/50 Index. The fund provides exposure to some of the top utilities, including Duke Energy (DUK) and Dominion Energy (D). vpu outperforms in 2019, returns to investors At 24.92%, the expense ratio is as low as 0.1%, just like other Vanguard funds. This utility sector fund yields 3.15% and could also be a good one if you're looking for an income-generating opportunity! Select.
Nasdaq 100 ETF (QQQ)
If you're looking for exposure to large tech companies, QQQ may be a good recession-proof mutual fund option. During a recession, funding in the tech sector can be a dark horse. For example, pandemics have increased demand for technology, making it easier to work remotely, which has boosted the industry. David Louton, a finance professor at Bryant University, says innovative companies will continue to have opportunities to fill the remaining technology gaps. "In general, technology companies are bound to do well, especially those whose products offer practical solutions or improve efficiency." Microsoft (MSFT) and Amazon.com (AMZN) are the top holdings. Despite the volatility of the stock market in the first quarter, the Kingston QQQ Trust continued to perform well. The fund has an expense ratio of 0.2%.
SPDR S&P Telecom ETF Fund (XTL)
Similar to utilities, telecommunications is another industry that has tended to remain stable during the recession. With the recent boom in pandemic-related telework, the telecom industry is likely to continue to be supported by strong demand for its services XTL is a capital appreciation fund that invests in some of the largest telecommunications companies, including Verizon (VZ) and AT&T. & T (T). While XTL does pay a dividend, the fund's primary focus is on growth. In the long run, investments in telecoms could pay off if more companies adopt telework policies for their employees. Telecom providers that have already begun the transition to 5G, or fifth-generation technology, could prove to be outstanding.
Real Estate Trust Index ETF (VNQ)
Funds in the real estate sector can provide some insulation from potential negative economic impacts, as real estate investments and the stock market in general Correlation tends to be lower than other sectors. The key is to select recession-resistant mutual funds that can hold a diversified real estate portfolio at a reasonable cost.VNQ will also measure the Both metrics, with an expense ratio of 0.12%, have an investment strategy designed to track the MSCI US IMI Real Estate 25/... Performance of the 50 Index. The Pioneer Real Estate ETF offers exposure to top real estate investment trusts, such as American Tower Company (AMT) and Avalon Bay Community (AVB) and the Vanguard Real Estate II Index (VRTPX).
Seven sector ETFs recommended for allocation during the recession.
Consumer Staples Select SPDR Fund (XLP)
Fidelity MSCI Health Care Index ETF (FHLC)
Gold ETF - SPDR (GLD)
Pioneer Utilities ETF (VPU)
Nasdaq 100 ETF (QQQ)
SPDR S&P Telecom ETF Fund (XTL)
Real Estate Trust Index ETF (VNQ)
