ETF Strategies For August As Coronavirus Outbreak Worsens

The coronavirus outbreak is aggravating globally as the number of cases has crossed the grim mark of 19 million, according to Johns Hopkins University. The condition in the United States also doesn’t look good as the total number of cases have crossed 4.8 million with at least 160,000 deaths, per a CNN report. Globally, the total number of coronavirus cases in India has surpassed 2 million with Africa seeing more than 1 million infections, going by a CNN report. The scenario in Latin America also looks troubling as the number of coronavirus cases continues to rise.

Meanwhile, per a CNN report, a major coronavirus model is now forecasting the death toll of nearly 300,000 by Dec. 1 in the United States. However, the numbers can improve if the public adheres to wearing masks strictly. Meanwhile, the rising number of coronavirus cases in the United States hurt consumer confidence in July due to worries about job prospects and business conditions. Also, the U.S. economy’s second-quarter GDP’s most devastating plunge of 32.9% on an annualized basis, according to the Commerce Department’s first reading of the data, dented investors’ optimism (going by a CNBC article).

Investors are worrying that another round of business restrictions and lockdown measures might derail the economic recovery achieved so far. In such a scenario, investors can take a look at the following ETF strategies to combat the coronavirus crisis:

Dividend ETFs to Take Shelter in

In a low-interest rate environment, dividend investing becomes a hot spot. Against this backdrop, dividend ETFs like WisdomTree U.S. Quality Dividend Growth Fund DGRW, FlexShares Quality Dividend Defensive Index Fund QDEF, WBI Power Factor High Dividend ETF (WBIY) and Schwab US Dividend Equity ETF (SCHD) might be compelling picks (read: A Quick Guide to Dividend Aristocrat ETFs).

Mid-Cap ETFs Looking Good

In the current scenario, where the market is behaving in a highly unpredictable manner, a mid-cap investment strategy can come in handy. Investment in mid-cap funds is often recognized as a good portfolio diversification strategy. These funds combine attractive attributes of both small and large-cap ETFs. While large companies are normally known for stability and the smaller ones for growth, mid-caps offer the best of both worlds. As such, investors seeking to capitalize on the strong fundamentals but worried about uncertainty should consider mid-cap ETFs like Vanguard Mid-Cap ETF VO, SPDR S&P MIDCAP 400 ETF Trust MDY, iShares Russell Mid-Cap Value ETF IWS, Vanguard Mid-Cap Growth ETF (VOT) and Schwab U.S. Mid-Cap ETF (SCHM) (read: Here's Why Mid-Cap ETFs Could Make for a Safer Bet Now).

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