Best ETF Investment Strategies For Q2 2022

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The war in Ukraine has introduced new uncertainty in the stock market, which has seen wild swings lately. Rising inflation, tighter monetary policy, and the impacts of the war continue to weigh on investor sentiment. 

ETFs like the SPDR MSCI USA StrategicFactors ETF (QUS - Free Report) may offer some downside protection while allowing upside participation by focusing on multiple factors like quality and value in addition to low volatility. Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) are its top holdings.

Investors should also consider assets like gold that have a low correlation to bonds and stocks. Take a look at the SPDR Gold Shares (GLD - Free Report) and the SPDR Gold MiniShares Trust (GLDM - Free Report), which have seen big inflows this year.

Inflation is currently at its highest levels in four decades. As the conflict has sent prices for energy, grains, and metals surging, it appears that higher inflation could persist for longer. To add inflation-sensitive market exposures, investors could consider the SPDR S&P Metals & Mining ETF (XME - Free Report) or the SPDR S&P North American Natural Resources ETF (NANR - Free Report).

The Federal Reserve raised interest rates by 25 basis points last week and plans six more increases by the end of this year. Small cap, value and bank stocks usually tend to outperform in a rising rate environment.

Energy ETFs like the Energy Select Sector SPDR ETF (XLE - Free Report) continue to rise as crude has surged due to supply disruptions and geopolitical tensions. Clean energy ETFs like the SPDR S&P Kensho Clean Power ETF (CNRG - Free Report) have seen a lot of interest from investors since the war started as the crisis could accelerate the world’s transition to renewable energy. Where should you invest now?

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