Image: Bigstock

In this episode of ETF Spotlight, I speak with Kristy Akullian, Director on BlackRock’s iShares Investment Strategy team, about the market outlook and investing strategies for the second half of 2022. BlackRock, the world’s largest asset manager, offers about 400US listed iShares ETFs.

After a brutal first half, stocks have rebounded this month as some investors believe that the sell-off could be reaching a bottom. Second quarter earnings reported so far have been better than feared.

Per iShares, we have entered a new regime marked by high volatility, inflation, and uncertainty.

While positioning the portfolio for the second half investors should focus on three themes: 1) embracing volatility, 2) living with inflation, and 3) the long-term impacts of shortages.

Low volatility ETFs like the iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) underperform the broader indexes during strong bull markets but hold up relatively well during market declines. The iShares Core High Dividend ETF (HDV - Free Report) is also worth a look since high dividend-paying companies offer some stability in volatile markets. Johnson & Johnson (JNJ - Free Report) and Exxon Mobil (XOM - Free Report) are among the top holdings in these funds.

Recent inflation reports were hotter than expected and while there are still hopes that inflation might have peaked in June, it is expected to remain at elevated levels in the coming months.

Investors could look at the iShares 0-5 Year TIPS Bond ETF (STIP - Free Report) and the iShares U.S. Pharmaceuticals ETF (IHE - Free Report) for some protection against rising prices.

The iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report) and iShares MSCI Global Agriculture Producers ETF (VEGI - Free Report) are poised to benefit from shortages in energy and food products caused by the war. Longer-term focused investors could also look at products that invest in clean energy and future of food.

More By This Author:

Why Long-Short ETFs are Beating the Market
2 New ETFs Worth a Look
Best & Worst Performing ETFs of 1H22