Amid the turmoil of the coronavirus sell-off during the month of March, it’s been exchange-traded funds (ETFs) that have been weathering the storm, and as the number of cases begins to lessen, it will continue to be ETFs that will prosper once a sense of normalcy returns.
“Things are normalizing,” said John Davi, Founder and Chief Investment Officer of Astoria Portfolio Advisors. “The Fed, with their announcement that they are dropping interest rates to basically 0%, buying corporate bonds, buying more Treasurys, that really kind of helped provide some stability to a lot of the dislocations that we were seeing in the marketplace.”
“I think, overall, things feel a little bit more normal. I know the economic front is going to look pretty bad and it’s going to look real ugly in terms of unemployment claims, but price action on the ETF front has been encouraging,” Davi added. “There’s actually been more inflows into ETFs, too. So, Vanguard took in a bunch of money in Q1 and I think [it]shows that the retail investor has been kind of hanging in there for the most part.”
When the markets are fed heavy servings of volatility, it helps to have liquidity when it comes to exchange-traded funds (ETFs). For the self-styled ETF tactician, one of the best funds for liquidity is the SPDR S&P 500 ETF (NYSEArca: SPY).
For investors who want to stick with large cap options as a safer play versus small cap or mid cap opportunities can opt for funds like the Goldman Sachs JUST U.S. Large Cap Equity ETF (JUST). The fund seeks to provide investment results that closely correspond to the performance of the JUST US Large Cap Diversified Index.
The fund seeks to achieve its investment objective by investing at least 80% of its assets in securities included in its underlying index, in depositary receipts representing securities included in its underlying index and in underlying stocks in respect of depositary receipts included in its underlying index. The index is designed to deliver exposure to equity securities of large capitalization U.S. issuers that engage in “just business behavior” based on rankings produced by the index provider.
Another large cap option is the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC). GSLC seeks to provide investment results that closely correspond to the performance of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index.
The fund seeks to achieve its investment objective by investing at least 80% of its assets (exclusive of collateral held from securities lending) in securities included in its underlying index, in depositary receipts representing securities included in its underlying index and in underlying stocks in respect of depositary receipts included in its underlying index. The index is designed to deliver exposure to equity securities of large capitalization U.S. issuers.
For more market trends, visit ETF Trends.