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ETFs That Probably Won't Fool You in April

Sanghamitra Saha

The start of the second quarter of 2019 is likely to be a solid one thanks to renewed progress in U.S.-China trade relation and sudden recovery in the Chinese manufacturing sector.

In any case, the month of April has historically been beneficial for the stock market. In fact, a consensus carried out from 1950 to 2018 shows that April ended up offering positive stock returns in 48 years and negative returns in 21 years, per moneychimp.com, with an average positive return of 1.33%. The return is the third highest, considering monthly performances.

Still, slowing global growth momentum cannot be overlooked. Recession jitters in the United States messed up with the investing world in March. So investors are now probably wondering if global markets will play a prank with them in April too.

Against this backdrop, we highlight a few ETFs that could prove to be gainful in the fourth month of 2019.

Invesco Golden Dragon China ETF PGJ

There are signs of improvement in the year-long trade tensions between the United States and China. In late February, Trump postponed the increase in tariffs on $200 billion of Chinese goods to 25% from 10% from this month, citing "substantial progress" in trade talks. Factory activity in China expanded unexpectedly in March at its quickest clip in eight months, according to a private survey (read: 10 ETF Areas to Gain as Trump Delays Additional Tariffs).

Xtrackers MSCI Europe Hedged Equity ETF DBEU

Given slowing economic growth in the Euro zone, the ECB has adopted a dovish stance in the region. This gives investors a reason to bet on the hedged Euro zone ETFs. After all, per a hedge fund manager, value lies in European equities.

The manager pointed out that both the Stoxx Europe 600 Index and the MSCI Europe Value Index are trading below long-term averages on a price-to-earnings basis and are yet to regain levels seen before the fourth-quarter sell-off. Investors can tap this opportunity with a high dividend Europe fund like DBEU, which yields about 3.16% annually.

SPDR S&P Transportation ETF XTN

With the arrival of spring, many set out on trips and engage in outdoor activities. Thus stocks related to travel and transportation normally do well in this timeframe. Per AAA, 68% will go on a summer vacation, while just under half intend to have a family trip this spring. Among all, spring and summer road trips are the most-favored. This should give a boost to XTN.

FlexShares STOXX Global Broad Infrastructure Index Fund NFRA

The STOXX Global Broad Infrastructure Index offers investors the opportunity to access the infrastructure sector globally. With rates remaining at a subdued level due to dovish central banks in most-developed economies, investors can expect some gains from this sector on the global level.

iShares Russell 1000 Value ETF IWD

The S&P 500 has just seen the best quarterly gain since 2009. After the astounding gains, thoughts of overvaluation concerns are justified. So, it will be wise to hone in on value quotient. Per an article published on seekingalpha, “value stocks are now at the deepest discount to growth since 2000,” ideally offering a good buying point. Investors can thus tap the 721-stock fund IWD, which measures the performance of the large-capitalization value sector of the U.S. equity market.

First Trust Nasdaq Artificial Intelligence and Robotics ETF ROBT

This is a red-hot zone. Robots and AI have been turning into an integral part of our lives. Automation is taking place almost everywhere. This emerging industry is thus a must-watch.

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Invesco Golden Dragon China ETF (PGJ): ETF Research Reports
 
SPDR S&P Transportation ETF (XTN): ETF Research Reports
 
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
 
Xtrackers MSCI Europe Hedged Equity ETF (DBEU): ETF Research Reports
 
First Trust NASDAQ Artificial Intelligence and Robotics ETF (ROBT): ETF Research Reports
 
FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA): ETF Research Reports
 
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Zacks Investment Research
 
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