With a lower unemployment rate and positive job gains reported, the economic outlook for the rest of the year is looking extremely strong, reports Reuters. While earnings season saw some initial concerns of how much growth the large- and mega-caps could continue to produce, as most outperformed yet again, a growing has helped assuage concerns.
The unemployment rate fell to 5.4% in July, down from the 5.9% in June, a 16-month low. Payrolls (non-farm) also increased 943,000 in July, with average hourly wages increasing 0.4%. This reflects the most workers hired in almost a year, with wages continuing to rise.
“We are charting new economic expansion territory in the third quarter,” Brian Bethune, professor of practice at Boston College in Boston, told Reuters. “The overall momentum of the recovery continues to build.”
Overall, 4.3 million jobs this year have been created, but the economy still reflects a 5.7 million job deficit from peak February 2020 numbers. The long-term unemployment figure fell to 3.4 million from 4 million in June, with the duration of unemployment also falling to 15.2 weeks from 19.8 weeks.
‘CFA’ Offers Large Cap Exposure with Volatility Weighting
For cautious investors that are looking to capitalize on the continued growth anticipated by economists, the VictoryShares US 500 Volatility Wtd ETF (CFA) is a solid option. The fund allows investors to gain balanced exposure to large cap U.S. equities with a unique volatility-weighted approach.
CFA tracks the Nasdaq Victory US Large Cap 500 Volatility Weighted Index. The benchmark screens all publicly traded U.S. stocks and only includes those with positive earnings in the most recent 4 quarters.
From there, the benchmark takes the top 500 stocks by market cap and weights them based on the volatility of their price changes over the previous 180 days. Those with lowest volatility get the highest weighting, while those with highest volatility have the lowest weighting.
CFA’s sector breakdown as of end of June includes a 17.63% allocation to industrials, a 16.03% allocation to information technology, 15.97% to financials, 14.27% to healthcare, 9.97% in consumer discretionary, and various smaller allocations.
The fund has an expense ratio of 0.35%.
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