For Immediate Release
Chicago, IL – May 9, 2022 – 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. ETF’s recently featured in the blog include: Simplify Interest Rate Hedge ETF PFIX, Cambria Value and Momentum ETF VAMO, Cambria Tail Risk ETF TAIL, AGFiQ US Market Neutral Anti-Beta Fund BTAL, Invesco S&P 500 Downside Hedged ETF PHDG.
Here are highlights from Friday’s Analyst Blog:
5 ETFs to Protect Your Portfolio Amid Market Sell-Off
Wall Street had a tumultuous day on May 5, triggered by the concerns over implications of the Fed’s biggest interest rate rise in 22 years. The S&P 500 fell 3.6%, erasing about $1.3 trillion of market value and marking the second-worst day of the year.
Meanwhile, the Dow Jones Industrial declined more than 1,000 points and the tech-heavy Nasdaq Composite Index fell nearly 5%. Both indexes notched their worst single-day drops since 2020. Though almost every sector has declined sharply on the day, a few ETFs were still in green and look to be solid picks in the market environment.
Fed Chair Jerome Powell raised interest rates by 50 bps as expected, pushing the benchmark above 0.75%. The hike marks the biggest interest-rate increase since 2000. With inflation running at a 40-year high of 8.5%, the central bank also signaled that it would keep hiking at the same pace over the next couple of meetings.
Signals that the Fed will not consider a rate hike by 75 bps at a future meeting were welcomed by investors initially but evaporated later, on worries about the impact of the Fed’s moves on the broader economy (read: 4 ETFs to Ride on Fed’s 50 Bps Rate Hike).
An increase in interest rates means higher loan rates for consumers and businesses, including mortgages, credit cards and auto loans.
Simplify Interest Rate Hedge ETF
Simplify Interest Rate Hedge ETF seeks to provide a hedge against a sharp increase in long-term interest rates and benefit from market stress when fixed-income volatility increases, while providing the potential for income. It buys put options on longer-term Treasury bonds to offer “the most liquid and the most cost-efficient way of getting interest rate protection.” Simplify Interest Rate Hedge ETF is the first ETF providing a simple, direct and transparent interest rate hedge.
PFIX has accumulated $262.6 million in its asset base since its debut a year ago and trades in an average daily volume of 154,000 shares. It charges 50 bps in annual fees (read: 3 New ETFs to Play Rising Rates).
Cambria Value and Momentum ETF
Cambria Value and Momentum ETF is an actively managed ETF providing exposure to a portfolio of companies that focus on all three factors — value, momentum, and tactical hedging — with the added benefit of lower volatility and protection from market downturns. Cambria Value and Momentum ETF results in a basket of 101 securities.
Cambria Value and Momentum ETF has accumulated $31.4 million in its asset base while trading in an average daily volume of 6,000 shares. The expense ratio comes in at 0.64%.
Cambria Tail Risk ETF
Cambria Tail Risk ETF seeks to mitigate significant downside market risk as it invests in a portfolio of “out of the money” put options purchased on the U.S. stock market. The TAIL strategy offers the potential advantage of buying more puts when volatility is low and fewer puts when volatility is high. While a portion of the fund’s assets will be invested in the basket of long put option premiums, the majority of fund assets will be invested in intermediate-term U.S. Treasuries.
Cambria Tail Risk ETF has amassed $402.2 million in its asset base and charges 59 bps in annual fees from investors. It trades in a volume of 442,000 shares a day on average.
AGFiQ US Market Neutral Anti-Beta Fund
AGFiQ US Market Neutral Anti-Beta Fund has the potential to generate positive returns regardless of the direction of the stock market as long as low-beta stocks outperform high-beta stocks. It invests primarily in long positions in low-beta U.S. equities and short positions in high beta U.S. equities on a dollar-neutral basis within sectors (read: Best ETF Areas of a Brutal April).
AGFiQ US Market Neutral Anti-Beta Fund has AUM of $122.9 million and an expense ratio of 2.53%. It trades in an average daily volume of 155,000 shares.
Invesco S&P 500 Downside Hedged ETF
Invesco S&P 500 Downside Hedged ETF is an actively managed fund and seeks to deliver positive returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns. Invesco S&P 500 Downside Hedged ETF tries to follow the S&P 500 Dynamic VEQTOR Index, which provides broad equity market exposure with an implied volatility hedge by dynamically allocating between different asset classes: equity, volatility and cash. The index allows investors to receive exposure to the equity and volatility of the S&P 500 Index in a dynamic framework.
Invesco S&P 500 Downside Hedged ETF has accumulated $351 million in its asset base and charges 40 bps in fees per year from its investors. Volume is good, exchanging 146,000 shares a day on average.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.