Good Quality ETFs And Stocks For An Edgy Market

Wall Street will be on holiday for Good Friday, but investors will be on the lookout for a bunch of good and timely bets as soon as the market reopens. This is even truer given the buoyancy in the market since the beginning of the year has rested a bit lately.

Geopolitical tensions are back on the table on U.S. moves against Syria and North Korea. The greenback lost ground as President Trump sees considerable strength in the currency’s current valuation. Volatility S&P 500, or VIX, which measures equity market volatility, gained about 39% in the last one month (as of April 12, 2017).

The S&P 500, the Dow Jones Industrial Average and the Nasdaq have lost their post-election (Donald Trump’s win) enthusiasm. Along with geopolitics, overvaluation concerns and doubts over the materialization of Trump’s promised pro-business policies are being seen as the key culprits. Oil prices have maintained their seesaw ride. Thanks to all the doldrums, the investing backdrop remains edgy at this moment.

Volatility could still flex its muscles further if Q1 earnings come in less than expected. In such an erratic market scenario, it would be wise to highlight a few good quality ETFs and stocks that can safeguard investors’ portfolios (read: 4 Hedge Fund ETFs to Counter Geopolitics & Fed Fears).

ETF Picks

VanEck Vectors Morningstar International Moat ETF (MOTI - Free Report)

If you are hunting for companies that are likely to last long, the ‘wide moat’ technique may please you. These stocks have distinguished competitive advantages than those of their peers. These advantages include brand name and economies of scale to name a few.

On the wide-moat front, we zeroed in on an international ETF as overseas investing has been extremely upbeat lately on the improving health of several economies. Policy easing has played a major role in driving global economic growth over the last couple of quarters. Be it Eurozone or emerging markets – all these regions grabbed investors’ attention in recent months (read: Why Did International ETFs Outperform in March?).

The 73-stock fund has a double-digit weight on China, Australia and Singapore. No stock accounts for more than 2.27% of the fund. MOTI is also well-diversified across various sectors.

WisdomTree US Quality Dividend Growth ETF (DGRW - Free Report)

Quality stocks are generally rich in value characteristics like strong return on equity, low earnings variability, higher free cash margins and low debt-to-equity. Thanks to these above-average and high quality traits, quality ETFs may go a long way in protecting one’s portfolio in turbulent times (read: Market Hitting New Highs: Bargain ETFs & Stocks to Buy Now).

The fund is a pool of dividend-paying stocks with growth characteristics. The fund puts about 5.94% weight in Johnson & Johnson followed by 4% in Apple and 3.4% in Microsoft. The fund is also well-diversified across sectors.

Stock Picks

Below we highlight two stocks having a Zacks Style Score of “A” in Value along with a Buy rating.

Micron Technology Inc. (MU - Free Report) – Provider of semiconductor memory solutions.

Zacks Rank: #1 (Strong Buy)

VGM (Value-Growth-Momentum) Score: A

Zacks Industry Rank: Top 1%

Tupperware Brands Corporation (TUP - Free Report) – Global direct seller of premium, innovative products across multiple brands and categories through an independent sales force.

Zacks Rank: #2 (Buy)

VGM (Value-Growth-Momentum) Score: A

Zacks Industry Rank: Top 9%

Disclosure: None.

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