|Day's Range||5.26 - 5.26|
Todd Rosenbluth, CFRA Head of ETF & Mutual Fund Research, joins Seana Smith on The Ticker to discuss which ETFs investors should watch if they're looking to navigate geopolitical uncertainty and market volatility.
[Editor's note: This article is regularly updated to include the most relevant information available.]If you're looking for the best Vanguard ETFs to buy for 2020, you'd be wise to consider those that can perform well in a slowing economy.There are plenty of arguments out there about the timing of the next recession, but there's no question that growth in the U.S. economy, as measured by gross domestic product (GDP), will be moderating, if not slowing, in 2020.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHere are signs of a slowing economy in 2020: * Yield Curve Inversion: When the yields on 10-year Treasury bonds fall below the yields on the 2-year Treasury note, it indicates that fixed-income investors foresee slow rates of growth and low inflation in the years ahead. The last time this occurred was June 2007. Based on history, stock performance is mixed after a yield curve inversion but this asset class tends to remain positive for about 18 months. Counting from August 2019, that makes January 2021 a possible beginning for the next downturn. * Weaker Leading Economic Indicators: In the second half of 2019, key economic indicators showed that the U.S. economic growth rate declined for the first time since May 2016. There are 10 components included among the key leading economic indicators, such as manufacturers new orders, building permits and consumer expectations. * Declining U.S. Gross Domestic Product (GDP): The first three quarters of 2019 showed declining GDP. The Conference Board's Dec. 11, 2019 update showed expectations for growth to remain the same or slightly higher (up to 2%) in Q4. The expectation is for GDP to hover around 2% in 2020. * 8 of the Strangest Stocks Worth Your Time In summary, it's wise for investors to expect, at best, a continuation of slow growth but no acceleration in 2020. At worst, investors should expect declining GDP throughout the year, nearing recession by Q1 2021. With that backdrop, and in no particular order, here are seven of the best Vanguard ETFs to buy in 2020: Best Vanguard ETFs for 2020: Vanguard S&P 500 ETF (VOO)Expenses: 0.03%, or $3 annually for every $10,000 investedIf you want to build around a core holding that could be a smart bet in 2020, and in the long run, Vanguard S&P 500 ETF (NYSEARCA:VOO) is arguably the best ETF to do the job.Picking the best sectors for 2020 could prove to be challenging because of uncertainties over trade and the presidential election. Because of this, an ETF like VOO, which is diversified across all sectors, can be a wise choice for the foreseeable future.Being cap-weighted, shareholders of VOO will naturally get more exposure to mega-caps like Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). But having additional exposure to roughly 500 U.S. large-cap stocks will add to VOO's appeal in 2020. Vanguard Health Care ETF (VHT)Expenses: 0.10%After lagging the S&P 500 in 2019, health sector funds like Vanguard Health Care ETF (NYSEARCA:VHT) may be due for a comeback in 2020.The primary drag on performance for health stocks in 2019 was the fear and uncertainty over the Medicare-for-All idea promoted by Democratic presidential nominees, Elizabeth Warren and Bernie Sanders. By the end of 2019, the fear began to fade and price declines for healthcare stocks appeared to be overdone. Combine this oversold status with their defensive qualities in the face of a potential slowing economy, health sector funds look attractive in 2020.To get broad exposure to the healthcare industry, ETFs like VHT are smart plays. VHT's multi-cap exposure means top holdings are large health stock names like Johnson & Johnson (NYSE:JNJ), Merck & Co (NYSE:MRK) and UnitedHealth Group (NYSE:UNH). But investors also get exposure to small- and mid-cap health stocks. Vanguard Consumer Staples ETF (VDC)Expenses: 0.10%Investors expecting a slowing economy in 2020 may like what they see in Vanguard Consumer Staples ETF (NYSEARCA:VDC).Although economic recession does not appear likely in 2020, it's also unlikely the economy will expand, especially in the absence of further rate cuts from the Fed or fiscal stimulus from new legislation.When the economy is moderating or slowing, consumers tend to become more selective in their buying habits. While they may buy less non-essential items, such as automobiles, apparel and entertainment, consumers will continue to buy the necessary consumer staples, such as food, beverages and household goods. * 5 Semiconductor Stocks Soaring Higher To take advantage of potential strength in the consumer staples sector, investors can gravitate toward equities like VDC top holdings Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), and Walmart (NYSE:WMT). Vanguard High Dividend Yield ETF (VYM)Expenses: 0.06%There's no question that the U.S. economy is in the mature phase of the business cycle, which can be a favorable environment for funds like Vanguard High Dividend Yield ETF (NYSEARCA:VYM).Investments that tend to perform well in the mature phase of the business cycle include dividend paying stocks, such as VYM top holdings JPMorgan Chase (NYSE:JPM), JNJ and PG. In a year that may bring the economy to the edge of recession, high value, high-yielding stocks like these can bring a combination of growth and relatively stability your portfolio needs.Since VYM tracks the FTSE High Dividend Yield Index, shareholders will get exposure to more than 400 U.S. dividend paying stocks. Vanguard Dividend Appreciation ETF (VIG)Expenses: 0.06%The best dividend funds to buy for both 2020 and the long term are arguably those that hold stocks of companies that consistently increase their dividends. To get broad exposure to these stocks, investors can buy Vanguard Dividend Appreciation ETF (NYSEARCA:VIG).Although Vanguard ETFs that provide high yields can be smart plays now, funds like VIG can be smarter, especially if you're looking for a combination of short-term and long-term benefit. In the short term, meaning the year 2020, value-oriented stocks that pay dividends are wise additions to a portfolio. For the long run, holding stocks that increase their dividends is also a wise move. * The Top Tech From CES 2020 VYM tracks the NASDAQ US Dividend Achievers Index, which emphasizes large U.S. stocks that have a record of growing dividends year over year. Therefore shareholders get access to dividend stocks like MSFT, PG and WMT. Vanguard FTSE Emerging Markets ETF (VWO)Expenses: 0.12%Having been in an extended slump, which was aggravated by trade tensions in 2019, funds like Vanguard FTSE Emerging Markets ETF (NYSEARCA:VWO) could see a comeback in 2020.VWO tracks the FTSE Emerging Markets All Cap China A Inclusion Index, which means that shareholders get a diversified mix of large-, mid- and small-cap stocks of companies located in emerging markets all around the world. Top five countries, from highest to lowest allocation percentage, are China, Taiwan, India, Brazil and South Africa.The underlying index is cap-weighted, which means the holdings are less geared toward mid- and small-caps and more concentrated in large-cap emerging market stocks like Tencent Holdings (OTCMKTS:TCEHY), Alibaba (NYSE:BABA) and Taiwan Semiconductor Manufacturing (NYSE:TSM). Vanguard Total Bond Market ETF (BND)Expenses: 0.035%Bonds aren't expected to beat stocks in 2020, but the best bond fund to hold will likely be Vanguard Total Bond Market ETF (NASDAQ:BND).The Federal Reserve Board has signaled that it will not move on rates in 2020. The monetary policy impact on bond prices will not be significantly positive or negative, but investors are wise to expect a below-average year for fixed income. At the same time, monetary policy has not exactly been predictable over the past year.Because of the potential for a lackluster year for bonds, combined with uncertainty in the direction of rates, investors are wise to stick with a broadly diversified bond fund with extremely low expenses like BND. Since the fund tracks the Bloomberg Barclays U.S. Aggregate Float Adjusted Index, shareholders are essentially holding the entire U.S. bond market.As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. However, he holds VOO in some client accounts. Under no circumstances does this information represent a recommendation to buy or sell securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Strangest Stocks Worth Your Time * 7 Stocks to Buy That Trump's Tax Cut Truly Rewarded * 5 Stocks That Could Double in 2020 The post 7 Best Vanguard ETFs for 2020 appeared first on InvestorPlace.
All bets are off for 2020. We could talk about any number of potential growth catalysts or looming hurdles for the new year, but overshadowing them all is the chaos machine of the presidential election. The best ETFs to buy for 2020, as a result, are designed to take advantage of feasible political outcomes, calmly weather the storm or barrel forward regardless of what the new year brings.That's no prophecy of utter doom and gloom, mind you. Indeed, there are plenty of pockets of optimism to be found.2019's slowdown in worldwide economic growth might have kept stocks from roaring even louder than they did, but Morgan Stanley believes global GDP growth will rebound in 2020 - a potential driver for the market. FactSet, meanwhile, reports that the new year's estimated earnings growth rate for the S&P; 500 Index should come in at 9.6%, which is above the 10-year average. (Analysts are even more confident, looking for profit growth "just over 10%," according to Kiplinger's 2020 investing outlook.)That said, even the most hopeful of S&P; 500 targets for 2020 call for roughly 10%-11% returns - most are closer to the 5%-7% range, and a few are calling for flat performance or worse. So while you do want to anchor your portfolio with a few broad, go-anywhere funds, many of the best ETFs for the year ahead will have to attack specific slices of the market.Here are the 20 best ETFs to buy for 2020. This is an intentionally wide selection of ETFs that meet a number of different objectives. We don't suggest investors go out and stash each and every one of these funds in their portfolio; instead, read on and discover which well-built funds best match what you're trying to accomplish, from buy-and-hold income plays to high-risk, high-reward shots. SEE ALSO: The 30 Best Mutual Funds in 401(k) Retirement Plans
State Street Global Advisors created the first-ever exchange-traded fund more than 25 years ago. This year, they may be pioneering another phase in the evolution of ETFs.
The S&P 500, the Nasdaq and the Russell 2000 are on their way to record the best year since 2013, boosting the related ETFs. Will the rally last in 2020?
The bullish trends in the S&P 500 index will likely continue heading into the New Year powered by the Fed's accommodative interest-rate policy and a resilient domestic economy.