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The Zacks Analyst Blog Highlights: QUAL, SPHQ, QDF, QUS and BFOR
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For Immediate Release
Chicago, IL – September 13, 2021 – Zacks.com announces the list of ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: iShares MSCI USA Quality Factor ETF (QUAL - Free Report) , Invesco S&P 500 Quality ETF (SPHQ - Free Report) , FlexShares Quality Dividend Index Fund (QDF - Free Report) , SPDR MSCI USA StrategicFactors ETF (QUS - Free Report) and Barron's 400 ETF (BFOR - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Quality ETFs to the Rescue Amid Rising Market Concerns
The United States is again facing a tough time curbing the coronavirus outbreak. Wall Street has also been mostly disappointing in the holiday-shortened week as all the three major indices might end the week in losses. Declining for the fourth consecutive day, the S&P 500 lost about 0.5% on Sep 9. Notably, the dual factors of rising COVID-19 cases and uncertainty surrounding the Fed's stimulus tapering decisions are making investors increasingly cautious.
According to the Johns Hopkins University data, the seven-day average of new COVID-19 cases surged more than 300% over the Labor Day reading of the previous year (per a CNN report). New COVID-19 cases are mostly being registered among the unvaccinated population. Unfortunately, only 53% of the total U.S. population is fully vaccinated, which means that it's a long way to achieving herd immunity.
The resurging cases might scare investors as they worry about the implementation of new lockdown measures to control the spread, which is raising worries regarding the sustainability of economic recovery from the pandemic-led slump.
Certain economic data releases have also turned out to be very disappointing. The U.S. economy added only 235,000 jobs in August 2021 (the lowest in seven months). The metric was far behind the forecast of 750,000 as a surge in COVID-19 infections probably kept companies from hiring and workers from actively looking for a job.
The U.S. unemployment rate declined to 5.4% in July 2021, below market expectations of 5.7%. The number of unemployed persons dropped by 782,000 to 8.7 million.
The consumer confidence in the United States slipped to a six-month low in August. The Conference Board's measure of consumer confidence index stands at 113.8 (the lowest level since February), comparing unfavorably with July's reading of 125.1. August's reading also missed the consensus estimate of the metric declining to 124, per a Reuters' poll.
Going on, Goldman Sachs has downgraded its economic outlook mentioning the highly-contagious delta variant and diminishing fiscal stimulus support as major concerns (per a CNBC article). The investment bank now forecasts 5.7% annual growth for 2021 versus the 6.2% consensus. The firm has also trimmed its fourth-quarter GDP expectation to 5.5% from 6.5%, as stated in the same CNBC article.
Quality ETFs to Watch
Quality stocks are rich in value characteristics with a healthy balance sheet, high return on capital, low volatility and high margins. These stocks also have a track record of stable or rising sales and earnings growth.
In comparison to plain vanilla funds, these products help lower volatility and perform rather well during market uncertainty. Further, academic research proved that high-quality companies constantly provide better risk-adjusted returns than the broader market over the long term.
Given that, we highlighted five ETFs targeting this niche strategy. These could enjoy smooth trading and generate market-beating returns in the current market scenario.
iShares MSCI USA Quality Factor ETF
This fund provides exposure to the large- and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index (read: Defensive ETF Strategies to Fend Off September Chills).
Expense Ratio: 0.15%
AUM: $25.49 billion
Invesco S&P 500 Quality ETF
This fund tracks the S&P 500 Quality Index, a benchmark of S&P 500 stocks that has the highest-quality score based on three fundamental measures, namely, return on equity, accruals ratio and financial leverage ratio (read: ETF Strategies to Profit From a Historically Weak September).
Expense Ratio: 0.15%
AUM: $3.19 billion
FlexShares Quality Dividend Index Fund
This ETF seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Quality Dividend Index.
Expense Ratio: 0.37%
AUM: $1.63 billion
SPDR MSCI USA StrategicFactors ETF
This fund offers exposure to stocks that have a combination of value, low volatility and quality factor strategies. This is done by tracking the MSCI USA Factor Mix A-Series Index.
Expense Ratio: 0.15%
AUM: $998.9 million
Barron's 400 ETF
This ETF seeks investment results that correspond generally, before fees and expenses, to the performance of the Barron's 400 Index.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: QUAL, SPHQ, QDF, QUS and BFOR
For Immediate Release
Chicago, IL – September 13, 2021 – Zacks.com announces the list of ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: iShares MSCI USA Quality Factor ETF (QUAL - Free Report) , Invesco S&P 500 Quality ETF (SPHQ - Free Report) , FlexShares Quality Dividend Index Fund (QDF - Free Report) , SPDR MSCI USA StrategicFactors ETF (QUS - Free Report) and Barron's 400 ETF (BFOR - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Quality ETFs to the Rescue Amid Rising Market Concerns
The United States is again facing a tough time curbing the coronavirus outbreak. Wall Street has also been mostly disappointing in the holiday-shortened week as all the three major indices might end the week in losses. Declining for the fourth consecutive day, the S&P 500 lost about 0.5% on Sep 9. Notably, the dual factors of rising COVID-19 cases and uncertainty surrounding the Fed's stimulus tapering decisions are making investors increasingly cautious.
According to the Johns Hopkins University data, the seven-day average of new COVID-19 cases surged more than 300% over the Labor Day reading of the previous year (per a CNN report). New COVID-19 cases are mostly being registered among the unvaccinated population. Unfortunately, only 53% of the total U.S. population is fully vaccinated, which means that it's a long way to achieving herd immunity.
The resurging cases might scare investors as they worry about the implementation of new lockdown measures to control the spread, which is raising worries regarding the sustainability of economic recovery from the pandemic-led slump.
Certain economic data releases have also turned out to be very disappointing. The U.S. economy added only 235,000 jobs in August 2021 (the lowest in seven months). The metric was far behind the forecast of 750,000 as a surge in COVID-19 infections probably kept companies from hiring and workers from actively looking for a job.
The U.S. unemployment rate declined to 5.4% in July 2021, below market expectations of 5.7%. The number of unemployed persons dropped by 782,000 to 8.7 million.
The consumer confidence in the United States slipped to a six-month low in August. The Conference Board's measure of consumer confidence index stands at 113.8 (the lowest level since February), comparing unfavorably with July's reading of 125.1. August's reading also missed the consensus estimate of the metric declining to 124, per a Reuters' poll.
Going on, Goldman Sachs has downgraded its economic outlook mentioning the highly-contagious delta variant and diminishing fiscal stimulus support as major concerns (per a CNBC article). The investment bank now forecasts 5.7% annual growth for 2021 versus the 6.2% consensus. The firm has also trimmed its fourth-quarter GDP expectation to 5.5% from 6.5%, as stated in the same CNBC article.
Quality ETFs to Watch
Quality stocks are rich in value characteristics with a healthy balance sheet, high return on capital, low volatility and high margins. These stocks also have a track record of stable or rising sales and earnings growth.
In comparison to plain vanilla funds, these products help lower volatility and perform rather well during market uncertainty. Further, academic research proved that high-quality companies constantly provide better risk-adjusted returns than the broader market over the long term.
Given that, we highlighted five ETFs targeting this niche strategy. These could enjoy smooth trading and generate market-beating returns in the current market scenario.
iShares MSCI USA Quality Factor ETF
This fund provides exposure to the large- and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index (read: Defensive ETF Strategies to Fend Off September Chills).
Expense Ratio: 0.15%
AUM: $25.49 billion
Invesco S&P 500 Quality ETF
This fund tracks the S&P 500 Quality Index, a benchmark of S&P 500 stocks that has the highest-quality score based on three fundamental measures, namely, return on equity, accruals ratio and financial leverage ratio (read: ETF Strategies to Profit From a Historically Weak September).
Expense Ratio: 0.15%
AUM: $3.19 billion
FlexShares Quality Dividend Index Fund
This ETF seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Quality Dividend Index.
Expense Ratio: 0.37%
AUM: $1.63 billion
SPDR MSCI USA StrategicFactors ETF
This fund offers exposure to stocks that have a combination of value, low volatility and quality factor strategies. This is done by tracking the MSCI USA Factor Mix A-Series Index.
Expense Ratio: 0.15%
AUM: $998.9 million
Barron's 400 ETF
This ETF seeks investment results that correspond generally, before fees and expenses, to the performance of the Barron's 400 Index.
Total Operating Expenses: 0.70%
AUM: $148.6 million
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.