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5 ETFs Less Likely to Play a Prank With You in April

Zacks Investment Research

So what if April Fools’ Day has passed? The investing world may still mess with you anytime over the month. Though April is a seasonally strong month for stocks, this year we have plenty of reasons to worry about.

5 ETFs Less Likely to Play a Prank With You in April

The first quarter was not okay with rising rate fears, trade tensions and upheavals in the tech space. In mid-March, Wall Street even suffered its worst week in more than two years thanks to a trade war between the United States and China.

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April also started on a rough note, but the month has a reputation of giving solid returns.  A consensus carried out from 1950 to 2017 shows that April ended up offering positive stock returns in 47 years and negative returns in 21 years, per moneychimp.com, with an average return of positive 1.34%.

Against this backdrop, let’s see if there are any investments that are less likely to fool investors this month, rather than live up to the historical fame of April.


ETFs Less Likely to Play a Prank With You in April: First Trust NASDAQ Technology Dividend Index Fund (TDIV)

Since the tech space was crushed in March, buying the dip could the right technique to gain over the long term. After all, fundamentals are pretty strong in the market.

Tech behemoths hoard huge cash overseas and are poised to benefit the most from Trump’s repatriation tax policy. Also, investors can expect higher dividend distribution or share buyback from this move.

Rising enterprise spending and emerging technologies like cloud computing, artificial intelligence and big data are the other positives.

However, given the wobbliness of sentiment around this area, some sort of value quotient is warranted at this moment. So, it is better to play this area with First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV), which is a dividend rich fund.


ETFs Less Likely to Play a Prank With You in April: iShares Edge MSCI USA Value Factor ETF (VLUE)

As the roaring Trump trade lost has some steam this year and the “sell in May and go away” activity is approaching, it is wiser to have a value ETF in the basket.

The iShares Edge MSCI USA Value Factor ETF (BATS:VLUE) includes U.S. large- and mid-capitalization stocks. Information Technology (25.5%) and Financials (14.5%) are top two sectors.


ETFs Less Likely to Play a Prank With You in April: Financial Select Sector SPDR Fund (XLF)

Financial stocks perform better in a rising rate environment. Also, bank stocks enjoy seasonality in April.

Also, the sector is the most-undervalued among the SPDR select sector ETFs. This makes the Financial Select Sector SPDR Fund (NYSEARCA:XLF) an intriguing pick.


ETFs Less Likely to Play a Prank With You in April: iShares Global Consumer Staples ETF (KXI)

The iShares Global Consumer Staples ETF (NYSEARCA:KXI) caters to the global consumer staple sector. With most global economies still practicing low rates, this slightly rate-sensitive ETF tends to fare better.

The sector’s safe nature is another positive. The fund is half invested in the United States where consumer spending is tasseling out.


ETFs Less Likely to Play a Prank With You in April: U.S. Global Jets ETF (JETS)

The U.S. Global Jets ETF (NYSEARCA:JETS) is likely to be a great beneficiary of the spring travel season. Airlines for America guided that air travel is expected to reach an all-time high of 150.7 million (2.47 million passengers) per day) between Mar 1 and Apr 30, up 4% from last year.

The sector came up with mixed-to-upbeat Q4 earnings. All these call for investing in this Zacks Rank #2 fund.

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