ETF Strategies To Play As Coronavirus Outbreak Aggravates

The coronavirus outbreak continues to aggravate in the United States, as well as across the globe. Making the situation worse are concerns that another round of business restrictions and lockdown measures might derail the economic recovery achieved so far.

Consequently, investors are looking for adequate ETF strategies to combat the coronavirus crisis. The pandemic-induced volatility can boost demand for inverse or inverse-leveraged ETFs like ProShares Short Dow 30 (DOG). Quality ETFs like iShares Edge MSCI USA Quality Factor ETF (QUAL) have a track record of stable or rising sales and earnings growth.

Investors can also consider funds providing exposure to “new normal” trends like work-from-home and online shopping through ETFs like Direxion Work From Home ETF (WFH) and Amplify Online Retail ETF (IBUY).

Demand for funds with “low volatility” or “minimum volatility” generally increases during tumultuous times. Here are some options: iShares Edge MSCI Min Vol USA ETF (USMV) and Invesco S&P 500 Low Volatility ETF (SPLV).

A non-cyclical sector like Consumer Staples is likely to be less hammered by any market crash. With respect to this, investors can consider The Consumer Staples Select Sector SPDR Fund (XLP). In a low-interest rate environment, dividend investing becomes a hot spot. Thus, a dividend ETF like WisdomTree U.S. Quality Dividend Growth Fund (DGRW) can be considered.

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