Consequently, investors who are more defensive may turn to quality U.S. companies to bolster their portfolio. There are a number of factor-specific ETF strategies to choose from. For instance, the iShares Edge MSCI USA Quality Factor ETF (Cboe: QUAL) tracks U.S. large- and mid-capitalization stocks based on quality screens for three fundamental variables: return on equity, earnings variability and debt-to-equity.
Additionally, while risk assets have priced in significant downside, any signs of diminished uncertainty could spur a swift rally in risk assets as prices catch up with the strong earnings growth, according to BlackRock.
Consequently, investors may look to something like the iShares MSCI USA Momentum Factor ETF (Cboe: MTUM), which provides targeted exposure to the momentum factor, a specific factor that has historically driven a significant part of companies’ risk and return.
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