U.S. Markets closed
  • S&P 500

    3,666.72
    -2.29 (-0.06%)
     
  • Dow 30

    29,969.52
    +85.73 (+0.29%)
     
  • Nasdaq

    12,377.18
    +27.82 (+0.23%)
     
  • Russell 2000

    1,848.70
    +10.67 (+0.58%)
     
  • Crude Oil

    45.74
    +0.10 (+0.22%)
     
  • Gold

    1,843.30
    +2.20 (+0.12%)
     
  • Silver

    24.17
    +0.03 (+0.12%)
     
  • EUR/USD

    1.2148
    -0.0001 (-0.0121%)
     
  • 10-Yr Bond

    0.9200
    -0.0280 (-2.95%)
     
  • Vix

    21.28
    +0.11 (+0.52%)
     
  • GBP/USD

    1.3451
    -0.0001 (-0.0108%)
     
  • USD/JPY

    103.8290
    -0.0310 (-0.0298%)
     
  • BTC-USD

    19,460.65
    +32.80 (+0.17%)
     
  • CMC Crypto 200

    382.19
    +7.79 (+2.08%)
     
  • FTSE 100

    6,490.27
    +26.88 (+0.42%)
     
  • Nikkei 225

    26,729.58
    -79.79 (-0.30%)
     

ETFs to Buy as Flare-up in Middle-East Tensions Spurs Volatility

Sweta Jaiswal, FRM

Rising tensions in the Middle East are keeping investors on their toes. Although the U.S.-Iran ties have been bitter since May 2018, the situation has taken a turn for the worse following the air strike on Jan 3. In fact, Iran is witnessing the biggest anti-U.S. demonstrations in 40 years following the killing of top Iranian commander Qasem Suleimani on direct orders from U.S. President Donald Trump (read: Safe-Haven ETFs Rally on Middle-East Unrest).

Iran Rolls Back Nuclear Deal Commitments

The Middle-East tensions are estimated to escalate on apprehensions of a retaliatory attack from Iran. Moreover, Iran has announced plans of not following the limits on its enrichment of uranium as under the Joint Comprehensive Plan of Action (JCPOA) (read: Country ETFs to Top/Flop on US Air Raid at Baghdad).

US Plans More Sanctions

Iraq has asked American and other foreign troops to leave the country as well. However, in response, the United States has warned to impose sanctions on Iraq. Meanwhile, the United States’ sanctions against Iran on cars, metals and minerals as well as U.S. and European aircraft were first put into place in August 2018. This was followed by sanctions on the import of Iranian energy in November 2018.

ETFs to Grab

Low-volatility products could be intriguing choices for those who want to stay invested in equities during turbulent market conditions. These seemingly safe products generally do not surge in a bull market but offer protection in unpredictable conditions. Providing more stable cash flow than the overall market, these funds are less cyclical in nature. The following options are intriguing:

iShares Edge MSCI Min Vol USA ETF USMV

This fund offers exposure to 209 U.S. stocks with lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. With AUM of $37.34 billion, the product charges 0.15% in expense ratio. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: ETF Strategies to Stave Off Middle East Tension).

Invesco S&P 500 Low Volatility ETF SPLV

This ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. It tracks the S&P 500 Low Volatility Index and holds 100 securities in its basket. SPLV has amassed $12.01 billion in its asset base. It charges 25 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook (read: Most Loved/Hated ETFs of the Fourth Quarter).

iShares Edge MSCI EAFE Minimum Volatility ETF EFAV

EFAV looks to replicate the performance of international equity securities that have lower risk. The fund tracks the MSCI EAFE Minimum Volatility (USD) Index and holds 279 securities. It has amassed $13.01 billion in its asset base. EFAV charges 20 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Low risk outlook (read: ETF Strategies to Tackle the Trade War Uncertainty).

iShares Edge MSCI Min Vol Global ETF ACWV

The fund provides exposure to global stocks with potentially less risk. The fund tracks the MSCI All Country World Minimum Volatility Index and holds 446 securities. It has an AUM of $5.64 billion in the asset base. ACWV charges 20 bps in annual fees and has a Low risk outlook.

Invesco S&P 500 High Dividend Low Volatility ETF SPHD

The fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500 Low Volatility High Dividend Index. It holds 49 securities. The fund has an AUM of $3.77 billion in the asset base. SPHD charges 30 bps in annual fees and has a Medium risk outlook.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports
 
iShares Edge MSCI Min Vol EAFE ETF (EFAV): ETF Research Reports
 
iShares Edge MSCI Min Vol USA ETF (USMV): ETF Research Reports
 
iShares Edge MSCI Min Vol Global ETF (ACWV): ETF Research Reports
 
Invesco S&P 500 High Dividend Low Volatility ETF (SPHD): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report