The sell-off in equities exchange traded funds has hacked stock valuations down to levels that has caught the interest of value investors and bargain hunters.
Bloomberg reports the rout in stocks has pushed S&P 500 valuations 25% below the average level from the last nine recessions as profit estimates fall with stock prices. Companies in the blue-chip index are trading at just above 10 times 2012 forecast earnings according to the report.
Of course, there are caveats. First, Wall Street earnings estimates might still be too rosy despite more analysts throwing in the towel and downgrading their forecasts. Also, the global economy is trying to recover from the worst credit crisis since the Great Depression.
Bargain-hunting investors may want to scale into ETFs by dollar-cost averaging, according to Benzinga.com.
Also, some investors have precious metals ETFs on their buy lists after the swift correction in gold and silver in September.
Benzinga recommends five ETFs that bargain hunters may want to consider:
- iShares S&P Global Energy ETF (NYSEArca: IXC) Exxon Mobile (NYSE: XOM) and Chevron (NYSE:CVX) dominate 24% of the portfolio. The fund offers some international oil company exposure, too. The fund is trading 30% below its 52-week high, according to the report.
- Market Vectors Agribusiness (NYSEArca: MOO) The fund is also trading 30% off its 52-week high.
- First Trust ISE Cloud Computing (Nasdaq: SKYY) This fund launched in July.
- Market Vectors Indonesia ETF (NYSEArca: IDX) This volatile fund should be scaled into, Benzinga says.
- iShares Silver Trust (NYSEArca: SLV) This precious metal may ride on gold’s coattails.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.