ETF Trends Publisher Tom Lydon wrote a piece for Fox Business identifying the opportunities abound for investors in 2019 after what’s been a stormy 2018 fraught with market challenges, such as trade wars, rising rates and year-end volatility.
The tumult was evident in all three major indexes–the Dow Jones Industrial Average lost 6.70 percent through Dec. 30, while the S&P 500 has shed 7 percent and the Nasdaq Composite is down 4.632 percent. Though there were challenges aplenty in 2018, there was one recurring theme–inflows into exchange-traded funds (ETFs).
Year-to-date (YTD) inflows into ETFs are now at $314.75 billion and $51 billion in December alone. In the same month, mutual funds have lost $122 billion.
Given that scenario, then where are the opportunities in 2019? Lydon cited the following ETFs investors can look to for what hopes to be a more prosperous 2019:
- iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG)
- SPDR Gold Shares (NYSEArca: GLD)
- iShares Gold Trust (NYSEArca: IAU)
- Vanguard Value ETF (NYSEArca: VTV)
- iShares MSCI Min Vol USA ETF (Cboe: USMV)
- Vanguard Dividend Appreciation ETF (NYSEArca: VIG)
- iShares Edge MSCI USA Quality Factor ETF (Cboe: QUAL)
- SPDR Portfolio S&P 500 Value ETF (NYSEArca: SPYV)
- PIMCO Low Duration Active ETF (NYSEArca: LDUR)
- Davis Select U.S. Equity ETF (NasdaqGM: DUSA)
- Davis Select Financial ETF (NasdaqGM: DFNL)
- Davis Select International ETF (NasdaqGM: DINT)
- Davis Select Worldwide ETF (NasdaqGM: DWLD)
- Cambria Tail Risk ETF (BATS: TAIL)
- ARK Innovation Fund (NYSEArca: ARKK)
Emerging Markets Comeback
While the majority of investors might be driven away by the red prices in emerging markets during much of 2018, Lydon believes they should be looked at as substantial markdowns, especially if trade negotiations between the U.S. and China result into something materially positive–a result emerging markets bettors are hoping for. From a fundamental standpoint, low price-to-earnings ratios in emerging markets ETFs have made them prime value plays as capital inflows continue–a benefit for IEMG.
Golden Opportunities in 2019
GLD and IAU could see a bounce back, particularly if the Federal Reserve acts as dovish as their words. Rising interest rates have spurred a strong dollar in 2018, but a return to precious metals could curry the favor of investors seeking safe havens from a rate pause or lower rates.
For more market trends, visit ETF Trends