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5 ETFs to Buy in July

The month of July kicked off with positive data points on the U.S. economy. First-quarter U.S. economic growth was revised up to 1.4% in June, from previous estimates of 1.2% in May and 0.7% in April (read: U.S. Economic Growth Improves: ETFs to Buy).

The manufacturing sector also grew at the fastest pace in almost three years in June, underscoring global economic growth. Eurozone manufacturing activity spiked to a six-year high last month. Meanwhile, there was a hawkish tone from the Fed and ECB chief (read: Hawkish Yellen, Draghi Boost These ETF Areas).

A consensus carried out from 1950 to 2016 shows that June ended up offering positive stock returns in 37 years and negative returns in 30 years, per moneychimp.com, with an average return of negative 0.88%.

Against this historical market performance, let’s take a look at the ETFs that can come across as intriguing bets for the month.

iShares Global Financials ETF IXG

Thanks to the hawkish tone from the Fed and ECB chief in June end, sovereign bond yields have lately been on the rise. The two-year U.S. Treasury yields are hovering around a nine-year high. German bond yields are also at this year’s high. This makes the case for investing in global financial stocks intriguing. This because financial stocks perform better in a rising rate environment.

About 55.3% of the fund is invested in banks followed by 23% in diversified financials. About 45% of the fund targets the U.S. market while United Kingdom, France and Canada round out the next three spots. Investors can also play U.S. financial ETFs like SPDR S&P Bank ETF KBE.

PowerShares Variable Rate Preferred Portfolio ETF VRP

As treasury yields are on the rise, investors must be interested in securities that offer benchmark-beating yields. Preferred stocks have always been in the spotlight for income investors because of the high yields they provide (read: 3 Preferred Stock ETFs Yielding More than 4%).

VRP is a floating rate bond that holds floating-rate preferred stocks and/or hybrid securities having similar characteristics. The fund yields about 4.78% annually.

ALPS Medical Breakthroughs ETF SBIO

The biotech space picked up momentum from June-end on compelling valuation, prospects of easing regulations, ebbing threats related to the price gouging issue and several successful clinical trials (read: Forget Big Tech, Biotech ETFs are Soaring Higher).

The underlying index of the fund picks research & development opportunities in the pharmaceutical industry. It comprises small-cap and mid-cap pharmaceutical and biotechnology stocks listed on U.S. stock exchanges having one or more drugs in either phase II or phase III U.S. FDA clinical trials.

Global X Health & Wellness Thematic ETF BFIT

As per Equityclock, consumer staples enjoys seasonal strength in the month of July. If this is not enough, this sector is less ruffled by economic fluctuations due to its non-cyclical nature. Additionally, still-cheaper energy prices, stepped-up economic activities, a recovering housing market, and a decent labor market are making the consumer segment a great place to stay invested in from the U.S. perspective. From the global point of view, things are looking up economically. This makes BFIT an intriguing pick.  

The index – the Indxx Global Health & Wellness Thematic Index – tracks the performance of companies in developed markets that offer products and services to promote physical wellness.

Guggenheim China All-Cap ETF YAO)

Things are falling in place for the Chinese economy, be it the recent MSCI decision to include A-shares in the Emerging Markets Index or improved manufacturing data in the month of June. This calls for China investing at this moment as a momentum play and investors can target YAO (read: Trump Slump to Oil Slide: Top ETF Stories of First-Half 2017).

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GLBL-X H&W THM (BFIT): ETF Research Reports
ISHARS-GLB FINL (IXG): ETF Research Reports
PWRSH-VR PFD (VRP): ETF Research Reports
ALPS-MED BRKTH (SBIO): ETF Research Reports
GUGG-CHINA AC (YAO): ETF Research Reports
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