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ETF Strategies to Play as Coronavirus Outbreak Aggravates

Sweta Jaiswal, FRM
·2 min read

The coronavirus outbreak continues to aggravate in the United States and globally. Making the situation worse are concerns that another round of business restrictions and lockdown measures might derail the economic recovery achieved so far.

Consequently, investors are looking for adequate ETF strategies to combat the coronavirus crisis. The pandemic-induced volatility can boost demand for inverse or inverse-leveraged ETFs like ProShares Short Dow 30 DOG. Quality ETFs like iShares Edge MSCI USA Quality Factor ETF QUAL have a track record of stable or rising sales and earnings growth. Investors can also consider funds providing exposure to “new normal” trends like work-from-home and online shopping through ETFs like Direxion Work From Home ETF WFH and Amplify Online Retail ETF IBUY.

Demand for funds with “low volatility” or “minimum volatility” generally increases during tumultuous times. Here are some options -- iShares Edge MSCI Min Vol USA ETF USMV and Invesco S&P 500 Low Volatility ETF SPLV. A non-cyclical sector like Consumer Staples is likely to be less hammered by any market crash. With respect to this, investors can consider The Consumer Staples Select Sector SPDR Fund XLP. In a low-interest rate environment, dividend investing becomes a hot spot. Thus, dividend ETF like WisdomTree U.S. Quality Dividend Growth Fund DGRW can be considered.

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Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports
 
iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports
 
WisdomTree U.S. Quality Dividend Growth ETF (DGRW): ETF Research Reports
 
Proshares Short Dow30 (DOG): ETF Research Reports
 
Amplify Online Retail ETF (IBUY): ETF Research Reports
 
Invesco SP 500 Low Volatility ETF (SPLV): ETF Research Reports
 
iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports
 
Direxion Work From Home ETF (WFH): ETF Research Reports
 
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Zacks Investment Research
 
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