Dividend Growth ETFs To Fight Second Wave Of Coronavirus Fears

From Beijing to United States, investors are spooked by possibilities of a second wave of coronavirus. Per a CNN report, the WHO has called a group of more than 100 coronavirus cases in Beijing a "significant event." Worries regarding the second wave are increasing as the virus has now spread beyond the Xinfadi market, resulting in at least 29 neighborhoods under lockdown in China’s capital.

Meanwhile, more than 2.1 million coronavirus cases have been recorded in the United States, with a death toll of at least 116,000. Per a CNN report, coronavirus cases have surged in 18 states over the past week, with six states reporting more than a 50% jump. Resultantly, some government and health officials have paused reopening efforts for some time. One of the 19 models currently featured on the U.S. Centers for Disease Control and Prevention website forecasts deaths from the virus to cross 201,000 in the United States by Oct 1, revising the figure upward from 170,000 predicted in the previous week (per a CNN report).

Going on, Fed Chair Jerome Powell maintained a dovish stance in the FOMC meeting, concluded on Jun 10. He informed that there is no expectation of a rate hike through 2022. The Fed has pledged to continue pumping in stimulus to support the economy and strengthen it. The central bank has also reiterated that the Fed funds rate would likely stay in the 0-0.25% range and confirmed continued bond-buying. The central bank forecasts the unemployment rate to fall to 9.3% by the end of this year. Though the figure is down from May’s 13.3%, it will be noticeably above 3.5% recorded in February — a near 50-year low.

The unemployment rate will later likely improve to 6.5% in 2021. The U.S. GDP is projected to shrink 6.5% this year before rebounding 5% next year and 3.5% in 2022. Inflation also has been forecast to remain below the Fed’s 2% target through 2022.

Dividend Growth ETFs for a Healthy Portfolio

The appeal of dividend ETFs has been rising in the face of easing monetary policy on the global front, and market uncertainty triggered by the pandemic and deceleration in global growth. This is because dividend-paying securities are major sources of consistent income for investors when returns from equity markets are uncertain.

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