Alternatively, investors may focus on mid- and small-cap companies that have less exposure to currency risks as they target domestic markets.
Related: Small- and Mid-Cap ETFs Light Up Investors
Mega-cap ETFs, such as DIA and DJD could gain additional benefit if the Federal Reserve pursues raising interest rates later this year. A rising rate environment may reflect a strengthening U.S. economy, and a healthier economy would help borrowers have an easier time repaying loans, with banks stuck with fewer non-performing assets. Moreover, rising rates means that banks will generate greater revenue from the spread between what they pay deposit savers and the prime rates they charge credit-worthy clients and other highly-rated debt.
Mega-cap ETFs can also help investors endure a growing list of concerns, such as an ongoing earnings recession in the U.S., an upcoming U.S. presidential election, an unclear outlook from the Federal Reserve and global economic weakness, especially with risks out of China and potential yuan currency devaluations.
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SPDR Dow Jones Industrial Average ETF
