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The Zacks Analyst Blog Highlights: BTAL, AOK, VIG, SPLV and IQLT

Rexnord's (RXN) fourth-quarter fiscal 2019 earnings gain from healthy segmental core sales growth, and benefits from acquired assets and strategic initiatives.

For Immediate Release

Chicago, IL – November 21, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include AGFiQ US Market Neutral Anti-Beta Fund BTAL, iShares Core Conservative Allocation ETF AOK, Vanguard Dividend Appreciation ETF VIG, Invesco S&P 500 Low Volatility ETF SPLV and iShares Edge MSCI International Quality Factor ETF IQLT.

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Here are highlights from Tuesday’s Analyst Blog:

Are We Headed Toward a Bear Market? ETFs to Save Your Portfolio

Wall Street has been anything but steady since October. Rising rates, trade tensions and fears of peaking U.S. economic growth have weighed on the markets occasionally. Of late, investors and analysts started panicking over whether we are slipping into a bear market territory (read: October Traditionally Most Volatile: ETFs That Gained).

This is especially true given the lowest level of CEO confidence on U.S. business conditions since October 2017, plunging homebuilders’ sentiments, escalating U.S.-Sino trade tensions and last but not least a faster Fed rate hike momentum.

Bear Market Lurking?

A correction territory may be around the corner for the S&P 500 index since its September high. But Michael Wilson of Morgan Stanley noted that “more than 40% of the S&P 500 stocks are down at least 20%.” Investors should note that a stock has to decline 20% from a previous high to ensure a bear market.

A “buy-the dip” strategy could not gather strength to take off this year. And such things happened before only “during bear markets, or the beginning of one," Wilson wrote. In 2018, the S&P 500 has recorded slight falloffs on average when the prior weekly return was negative, according to Morgan Stanley. That hasn't been seen since 2002.

BNY Mellon also believes that the bull market is ‘in trouble’ and investors have to brace for more selling pressure. Most surprisingly, as much as 53% of Democrats and Republicans expect the ongoing bull market to end in two years, according to an E*Trade survey.

Economic Growth to Slow Down?

Goldman Sachs expects the U.S. economy to considerably slacken in the second half of next year as the Fed is on its course to raise interest rates and the effects of the tax cut are fading away. The U.S. economy is likely to see a 1.75% GDP growth rate at the end of 2019 from the ongoing clip of 3.5% plus, per Jan Hatzius, chief economist for the investment bank.

Goldman estimates economic growth at 2.5% in the fourth quarter of this year, down from 3.5% last quarter. Not only this, in late October, Goldman Sachs Group cut the equity benefit to GDP growth to minus 0.25 percentage points for next year, down from a  0.5 percentage point boost at the start of the year.

ETF Bets

Against this backdrop, a few ETF areas could safeguard one’s portfolio.

AGFiQ US Market Neutral Anti-Beta Fund

Investors who want to shift focus to low-beta stocks during this uncertain market environment can consider adding BTAL ETF to their portfolio. The underlying index identifies the lowest beta stocks and goes long on them, while at the same time going short on the highest beta stocks.

iShares Core Conservative Allocation ETF

The underlying S&P Target Risk Conservative Index seeks to measure the performance of an asset allocation strategy targeted to a conservative risk profile. It yields about 2.33% annually.

Vanguard Dividend Appreciation ETF

A quality focus is necessary in such a situation, for which investors choose to bet on VIG. The NASDAQ US Dividend Achievers Select Index consists of common stocks of companies that have a record of increasing dividends over time (read: Midterms Produce Split Congress: ETF Areas in Focus).         

Invesco S&P 500 Low Volatility ETF

The underlying S&P 500 Low Volatility Index consists of the 100 stocks from the S&P 500 Index with the lowest realized volatility over the past 12 months.

iShares Edge MSCI International Quality Factor ETF

If Wall Street bleeds, it is wise to have a focus on international quality stocks. The underlying index looks to track stocks with a high return on equity, stable year-over-year earnings growth & low financial leverage. The U.K., Switzerland, Germany, Japan and France have a double-digit weight each in the fund (read: Top Foreign ETFs of Q3).

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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ISHARS-CN AL (AOK): ETF Research Reports
 
ISHARS-MS IDQ (IQLT): ETF Research Reports
 
VANGD-DIV APPRC (VIG): ETF Research Reports
 
QS-US MN AN-BET (BTAL): ETF Research Reports
 
POWERSH-SP5 LVP (SPLV): ETF Research Reports
 
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