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5 High-Beta ETFs to Buy on Trade Talk Hopes

Sanghamitra Saha

After heightened tensions related to the US-China trade war escalation last month, China announced that its trade officials will have talks with U.S. counterparts in Washington early next month. Lower-level officials will have “serious” dialogues this month to prepare for the talks, which were initially scheduled for September.

Investors should note that both parties hiked tariffs on Sep 1 in the latest round. China’s government enacted higher tariffs on Sep 1 on the proportion of goods that only make up “about one third of the more than 5,000 product lines listed in the latest announcement.” The majority of the duties will be implemented on Dec 15.

This move by China came on the heels of the U.S. government’s announcement on Aug 1 that it is imposing a 10% tariff on $300 billion worth of Chinese goods. Washington then delayed some of the tariffs on Aug 13 stating that those will be enacted in two tranches, on Sep 1 and Dec 15.

But following China’s announcement of retaliation, Trump said that he would “raise tariffs on $250 billion worth of Chinese exports to 30% from 25% in October.” Moreover, tariffs planned on another $300 billion of Chinese goods have been revised to 15% from 10% (read: August ETF Events That Grab Headlines).

Amid such a situation, optimism about trade talks are surely to boost markets. SPDR S&P 500 ETF SPY and SPDR Dow Jones Industrial Average ETF DIA added about 1% each and Invesco QQQ Trust QQQ gained more than 1.4% on Sep 4.

Given the bullishness, investors might find the following high-beta ETFs profitable.

High-Beta ETFs

Beta is directly related to market movement. Notably, high-beta funds tend to rise or fall more than the stock market and are thus more volatile. A beta that is greater than 1.0 is prone to be more volatile and more gainful. When markets soar, high-beta funds experience larger gains than the broader market counterparts and thus, outpace their rivals.

First Trust Technology AlphaDEX Fund FXL– Up 2% on Sep 4

The underlying StrataQuant Technology Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.

Zacks Rank: #1 (Strong Buy)
Beta: 1.28

KraneShares CSI China Internet ETFKWEB– Up 1.1% on Sep 4

The underlying CSI Overseas China Internet Index is designed to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are in Internet and Internet-related sectors (read: Global Stimulus & Huawei Relief Boost Markets: ETFs in Focus).

Zacks Rank: #2 (Buy)
Beta: 1.49
 

Global X U.S. Infrastructure Development ETF PAVE – Up 0.8% on Sep 4

The underlying INDXX U.S. Infrastructure Development Index measures the performance of U.S.-listed companies that provide exposure to domestic infrastructure development, including companies involved in construction and engineering; production of infrastructure raw materials, composites and products; industrial transportation; and producers/distributors of heavy construction equipment.

Zacks Rank: #2
Beta: 1.41

First Trust RBA American Industrial Renaissance ETFAIRR – Up 1.2% on Sep 4

The underlying Richard Bernstein Advisors American Industrial Renaissance Index measures the performance of small-and-mid-cap U.S. companies in the industrial and community banking sectors (read: Should You Buy Caterpillar or CAT-Proof Industrial ETFs?).

Zacks Rank: #1
Beta: 1.38

Janus Henderson Small Cap Growth Alpha ETF (JSML– Up 0.5%

The underlying Janus Small Cap Growth Alpha Index selects small-sized capitalization stocks by evaluating each company’s performance in three critical areas: growth, profitability, and capital efficiency.

Zacks Rank: #2
Beta: 1.23

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SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
 
First Trust RBA American Industrial Renaissance ETF (AIRR): ETF Research Reports
 
First Trust Technology AlphaDEX Fund (FXL): ETF Research Reports
 
Invesco QQQ (QQQ): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Janus Henderson Small Cap Growth Alpha ETF (JSML): ETF Research Reports
 
KraneShares CSI China Internet ETF (KWEB): ETF Research Reports
 
Global X U.S. Infrastructure Development ETF (PAVE): ETF Research Reports
 
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