HH A Look At The Christmas Tree Of Top-Ranked ETFs

Healthcare, which generally outperforms during periods of low growth and high uncertainty, garnered investors’ interest due to its non-cyclical nature this year. This is because the demand for healthcare services remains intact even amid deteriorating economic fundamentals. While most of the ETFs in this sector are expected to shine, iShares U.S. Medical Devices ETF (IHI - Free Report) seems an intriguing choice. The fund provides exposure to U.S. companies that manufacture and distribute medical devices by tracking the Dow Jones U.S. Select Medical Equipment Index. It holds 57 securities in its basket and has managed assets worth $2.5 billion. The ETF charges 43 bps in fees per year and has a Zacks ETF Rank #1 (Strong Buy). It has gained nearly 9% so far this year.

For the top part of the tree, we have chosen mid-cap iShares Core S&P Mid-Cap ETF (IJH - Free Report) as investors seek to participate in the growing economy but are worried about uncertainty. While large companies are normally known for stability and the smaller ones for growth, mid-caps offer the best of both the worlds, offering growth and stability simultaneously. These middle-of-the-road securities are arguably safer options and have the potential to move higher in turbulent times, especially if political issues or financial instability creeps into the picture. IJH has shed 14.1% so far this year and has a Zacks ETF Rank #2.

At the very top is the star ETF of 2018 — Invesco Dynamic Software ETF (PSJFree Report). The ETF has risen 9.4% so far this year and has a Zacks ETF Rank #2, which suggests that outperformance will continue. With AUM of $246.6 million, this ETF provides exposure to 30 software segments of the broader U.S. technology space and charges 63 bps in annual fees.

With the structure ready, we now have to decorate the tree with bells, candies, and lights. While most of the ETFs could be part of this beautification, we have chosen those that offer stability amid market turbulence. Notably, the ultra-popular Vanguard Dividend Appreciation ETF (VIG - Free Report), with AUM of $27.8 billion, follows the Nasdaq US Dividend Achievers Select Index. The benchmark is composed of high-quality stocks that have a record of raising dividends every year. It holds 182 securities in the basket and charges 8 bps in annual fees. The product has a Zacks ETF Rank #1 and has shed 5.3% in the year-to-date timeframe.

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