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Market in Correction: 5 ETFs Surviving the Slump

Wall Street has been on a tumultuous ride over the past three months, with all the three major indices slipping into correction territory. Myriad woes ranging from U.S.-China trade tension to global growth concerns led to the terrible performances. With the recent slump, the S&P 500 is on track for its biggest quarterly loss since the third quarter of 2011 (read: 5 Incredible ETFs & Stocks to Buy on the Dip).

The slew of weaker-than-expected economic data out of China and Europe last week added to the woes that sparked fresh worries about the world’s second-biggest economy and prospects for global growth. In particular, Chinese industrial output and retail sales for November missed the analyst forecast, while Europe’s IHS Markit’s purchasing manager’s index showed that the German and French private sectors slowed down in November. Meanwhile, purchasing managers index readings for the U.S. manufacturing and services sectors also fell to multi-month lows, indicating that activity is expanding at a slower pace.

Further, investors exited more than $46 billion from U.S. equity mutual funds and ETFs in the week (Dec 5-12), representing the largest weekly outflow since Lipper began tracking weekly flows in 1992. According to the latest survey of the American Association of Individual Investors, bearish sentiment (expectations that stock prices will fall over the next six months) jumped 18.4 percentage points to 48.9% in the seven-day period ended Dec 12, while bullish sentiment (expectations that prices will rise over the next six months) fell 17 percentage points to 20.9% -- its lowest since May 25, 2016 and below its historical average of 38.5% for the 12th time in 14 weeks.

However, there are still winners in many corners of the market that are easily surviving the slump. Below we have highlighted five ETFs from different corners of the market that have traded in the green in three months and will likely to continue to do so should the trends prevail.

AdvisorShares Ranger Equity Bear ETF HDGE

The ETF is actively managed and seeks capital appreciation by taking short positions in a number of U.S. listed companies with low earnings quality or aggressive accounting practices. The managers will look to identify earnings-driven events that could lead to price declines such as downward earnings revisions or reduced forward guidance – the two factors that can spell trouble for a company. These securities with potentially weak fundamentals will underperform in a crumbling market, thereby resulting in strong profits for the fund. HDGE has amassed $138.3 million in its asset base and is a bit pricey, charging 2.72% in annual fees. It has gained nearly 14% over the past three months (read: Further Selloffs Ahead? ETF Strategies to Follow).

Market Vectors Gold Mining ETF GDX

Gold generally acts as a store of value and hedge against market turmoil. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market. As such, the ultra-popular GDX, having AUM of $9.7 billion, surged nearly 12% in three months. The fund follows the NYSE Arca Gold Miners Index, holding 48 stocks in its basket. Canadian firms account for half of the portfolio, while Australia (16.8%) and the United States (16.4%) round off the top three. The fund charges 53 bps in annual fees.

Invesco DWA Utilities Momentum ETF PUI

Being a low-beta sector, utility is relatively protected from large swings (ups and downs) in the stock market and is thus considered a defensive investment or safe haven amid economic or political turmoil. This fund offers exposure to 31 companies that are showing relative strength (momentum) and tracks the DWA Utilities Technical Leaders Index. Electric utilities and multi utilities account for 39.1% and 25% of assets, respectively, while gas utilities round off the next spot with double-digit exposure. The ETF charges 60 bps in annual fees and has AUM of $118 million. It has climbed 7.1% in the same time frame and carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Utility ETFs Scale New Highs Amid Rising Volatility).

Global X Silver Miners ETF SIL

Investors piled up silver mining stocks amid belief that silver acts as a store of wealth in turbulent times. Additionally, the Fed’s dovish outlook gave boost to the metal price. This silver ETF provides investors access to a broad range of silver mining companies by tracking the Solactive Global Silver Miners Total Return Index. It holds 21 securities and charges 65 bps in annual fees. The fund has AUM of $340.1 million and has gained 4.2% in three months.

iShares Residential Real Estate ETF REZ

The inverted yield curve in the United States signaling an imminent economic slowdown has returned the lure for the rate-sensitive real estate stocks. An improving economy has added to the strength as it translates into greater demand for real estate, higher occupancy levels and landlord’s greater power to ask for higher rents. REZ tracks the FTSE Nareit All Residential Capped Index and offers exposure to the U.S. residential real estate sector. Holdings 41 stocks in its basket, the fund has amassed $334.4 million in its asset base and charges 48 bps in annual fees. It has added 4% over the past three months and carries a Zacks ETF Rank #3 with a Medium risk outlook (read: Real Estate ETFs at One-Month High: Here's Why).

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