Top ETF Picks for Investors in Challenging Market Conditions

This article highlights five top ETFs suitable for investing during uncertain times, focusing on high dividend yield, low volatility, and international opportunities. It provides insights into fund strategies, sector exposures, and performance indicators to guide investors seeking stability and income in challenging markets.

Top ETF Picks for Investors in Challenging Market Conditions

In uncertain economic times, focusing on high-dividend ETFs can offer stability and income. Several sectors, especially energy and real estate, face volatility amid recent global disruptions. Here are five promising ETFs suitable for such conditions:

Legg Mason Low Volatility High Dividend ETF (LVHD)

This ETF emphasizes high dividend payouts with lower market fluctuations. Despite expected negative returns this year, it outperforms the S&P 500, tracking the QS Low Volatility High Dividend Index with about 25% exposure to energy and real estate. No single holding exceeds 2.8%, minimizing risk. The fund’s yield stands at 3.36%, with a modest 0.27% expense ratio.

VictoryShares US Large Cap High Dividend Volatility ETF (CDL)

With over $207 million AUM, CDL targets the Nasdaq US Large Cap High Dividend 100 Volatility Index. Its methodology allows for flexible strategies, with no real estate holdings but a 22.84% stake in financial services. The dividend yield is 3.23%, and expense ratio is 0.35%.

Xtrackers MSCI EAFE High Dividend Yield ETF (HDEF)

International equities are currently offering modest returns, but HDEF’s 4.77% yield makes it attractive. It’s low in energy exposure at 4.65%, focusing on efficient oil companies that are maintaining dividends. The fund has notable exposure in the UK (24.64%) and Japan (11%), with a 0.20% expense ratio.

Vanguard Small-Cap ETF (VB)

This fund tracks the CRSP US Small Cap Index, providing an affordable way to invest in small-cap stocks with a median market cap of $4.2 billion. It’s poised for potential rebounds based on value rather than growth, with a 0.05% expense ratio and 2% dividend yield.

WisdomTree Emerging Markets ex-State Owned Enterprises ETF (XSOE)

As China resumes activity and fuel consumption approaches normal, XSOE offers a strategic way to tap into emerging markets excluding state-owned firms. With 39% exposure to China, and significant holdings in Taiwan and South Korea, it yields around 2.6%, with an expense ratio of 0.32%.

Note:

The content is compiled from research, expert opinions, and data, but may change due to evolving market conditions. It’s advisable to consult a financial professional before making investment decisions. We are not responsible for any inaccuracies or differing opinions.