Markets rebounded well in 2019 (according to the Fed's accommodating comments), as evidenced by the 8.2% return recorded since the beginning of the year by SPDR S & P 500 ETF (SPY – Free Report), episodes of volatility are likely to hinder the market recovery.
Inside future deterrent forces
After more than a month of deadlock, the US federal government reopened in January for a three-week period. A stalemate in the adoption of a spending bill, in which Trump was seeking $ 5.6 billion in funding for the construction of a Democrat-opposed border wall, was the main one. because of the closure. Since Democrats are always opposed to border funds, uncertainty is great. Both parties are now considering alternatives to avoid a new closure after February 15 (read: US Government Reopening: High Beta & Momentum ETFs).
Concerns about global growth are also legion. The International Monetary Fund (IMF) forecasts global growth of 3.5% in this respect and 3.6% for next year. Forecasts fell 0.2 percentage point and 0.1 percentage point from the October report (read: The IMF is reducing its global growth outlook: bet on 5 quality ETFs).
If that were not enough, the European Commission expects eurozone growth to slow to 1.9% this year, compared to 1.9% in 2018. The new estimate is down sharply from the previous one The Commission's 2019 forecast for Commission growth for 2019. The Bank of England lowered its growth forecast for 2019 from 1.7% to 1.2% (read: Worrying about European growth? of these 5 ETFs).
Moreover, no solution to the current trade crisis between the United States and China is envisaged at the moment. Brexit's issues are one of the biggest overhangs in the stock market. The World Bank has reduced global growth forecasts to 2.9 percent for this year from the previous 3 percent, due to increasing trade tensions, reduced manufacturing activity, and growing financial difficulties in the market countries. emerging (read: Forget Growth ETF, Bet on Value in 2019).
Why should you focus on ETFs and valuable stocks?
Concerns about global growth are leading us to believe that equities should be stable in the near term, but choosing a value investment is a great idea for the moment. Value stocks are those that trade below their intrinsic value and are undervalued by the market. In addition, these stocks outperform growth stocks when considering the long-term investment horizon.
ETF and Stock Choices
In this context, we highlight some neglected value ETFs, which are likely to outperform in the coming days.
Choice of ETF
Invesco S & P 500 ETF Enhanced Value (SPVU – Free report) ) – $ 23.5 million in assets under management
The underlying index tracks the performance of the S & P 500 Index stocks having the highest value score. It charges 13 basis points in fees. The fund has a Zacks ETF (Strong Buy). The fund added only 1.8% in the past year and 8.9% this year.
Invesco Russell 2000 Pure Value ETF (PXSV – Free report) ) – $ 76.5 million
The underlying Russell 2000 Pure Value Index includes securities with strong value characteristics. The return on the Zacks Rank # 3 (Hold) fund is 2.28% per annum. It charges 39 basis points in fees. The fund added only 4.5% in the past year, up from 11.4% this year.
ValueShares International Quantitative Value ETF (IVAL – Free report) ) – $ 86.6 million
The underlying quantitative value index Alpha Architect International uses a quantitative, five-step, rules-based methodology to identify a portfolio of 40 to 50 undervalued non-US stocks or their deposits, with potential for capital appreciation. It gives 2.70% per year. The fund was down 12.3% over the past year, but up 8.6% this year.
We also highlight some of the top-ranked stock options that lagged in the last 12 weeks but gained momentum over the past week. All of these stocks have a value score of A.
Dell Technologies Inc. (DELL – Free Report)
Zacks' # 1 provider of information technology has lost 51% in the past 12 weeks and increased 6% last week (as of February 8, 2019). It belongs to one of all the major industries of Zacks (9%).
SkyWest Inc. (SKYW – Free report)
Zacks Holding, a leading passenger airline and an aircraft leasing company, lost about 2.1% in the last 12 weeks and added 5.6% last week (as of February 8, 2019). He is from a leading sector at Zacks (4%).
PennyMac Mortgage Investment Trust (PMT – Free Report)
This real estate investment trust currently has the rank 1 of Zacks. It comes from one of the best Zacks industry (41%). The stock is up 3.3% over the last three months, but has added 14.5% this year.
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