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5 Magical ETFs to Gift Your Valentine This Year

Sweta Killa

The year 2019 is showing immense potential in the stock market after a bumpy ride last year. In fact, the S&P 500 logged in the best January since 1987, while the Dow Jones saw the best start to a year since 1989. Meanwhile, Nasdaq had its best January since 2001, surging 9.7% (read: Wall Street Caps Best Month in Decades: 6 Top Leveraged ETFs).

The historic gain came on the back of signs of progress in U.S.-China trade negotiations, a dovish Fed and strong labor market. Additionally, a string of better-than-expected earnings lately and the outcome of the Fed’s latest meeting added to the strength. The central bank indicated a pause in the rate hike cycle, after four lift-offs last year. Further, oil price also rebounded strongly on falling production and OPEC-led fresh crude output cuts.

However, the still unresolved U.S.-China trade war, global growth concerns, geopolitical tensions, Brexit and slowdown in the world’s second-largest economy continue to linger (read: ETF Investing 2019: Best Ideas & Trends).

Against such a backdrop, let’s delve into the heart and soul of some magical ETFs that deserve love this Valentine’s Day.

Though stock market gains are broad-based, value ETFs look to outperform given a myriad of woes. These seek to capitalize on inefficiencies in the market and have the potential to deliver higher returns with lower volatility compared with growth and blend counterparts. Additionally, value ETFs are less susceptible to trending markets and their dividend payouts serve as safety in times of market turbulence. Notably, these outperform the growth ones across all asset classes when considered on a long-term investment horizon. SPYV has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Forget Growth, Bet on Value ETFs in 2019).

ETFMG Alternative Harvest ETF MJ

The marijuana ETF has been on a tear buoyed by widespread cannabis legalization and federal approval that reached an all-time high in 2018. Canada became the second country in the world to legalize recreational cannabis on a national level. In the United States, Michigan became the 10th state to legalize recreational cannabis use while Utah and Missouri became the 31st and 32nd states, respectively, to legalize marijuana for medical use. Recreational marijuana is expected to be legal soon for adults over the age of 21 years in New York, while the European nation of Luxembourg in late November also announced that marijuana would soon be legalized for recreational use by adult residents.

Additionally, the FDA approved the first non-synthetic cannabis derived medicine, EPIDIOLEX, used to treat rare forms of childhood epilepsy and Trump passed Farm bill legalizing cannabis products derived from hemp in America, including products containing cannabidiol (CBD). All these developments have injected strong optimism into the emerging marijuana industry (read: 5 Top Performing Stocks of Marijuana ETF).

iShares Core MSCI Emerging Markets ETF IEMG

After a weak 2018, emerging market ETFs are poised for strong performance this year on a dovish Fed that will keep U.S. dollar at check. Additionally, hopes over the trade deal between the United States and China as well as stimulus in China’s economy have raised the appeal for these stocks. The beaten down prices have also made products targeting emerging nations compelling bets. IEMG has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: EM Equities ETFs Off to a Great Start in 2019: Here's Why).

Vanguard Dividend Appreciation ETF VIG

Amid volatility and uncertainty, dividend ETFs like VIG, which includes stock that not only offer dividends but also consistently increase their payout, seem excellent picks. This is because dividend-focused products offer safety in the form of payouts while at the same time provide stability as mature companies are less volatile to the large swings in stock prices. The companies that payout dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Investors should note that dividend-paying securities are the major sources of consistent income, when returns from the equity market are at risk. VIG has a Zacks ETF Rank #1 with a Medium risk outlook.


Well! Who doesn’t love gold? The year 2019 seems perfect for the yellow metal thanks to Fed actions that raised the appeal for gold. Lower interest rates will continue to weigh on the dollar against the basket of currencies, raising the yellow metal’s attractiveness as it does not pay interest like fixed-income assets. Additionally, global headwinds should boost demand for the metal as a great store of value and hedge against market turmoil. While there are several choices in the space, the ultra-popular GLD could be the ultimate gift for your valentine. The fund has a Zacks ETF Rank #3 with a Medium risk outlook (read:Four Solid Reasons to Buy Gold ETFs Now).

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