Three ETFs To Help Your Portfolio Profit From The Dollar Weakness

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The U.S dollar is on course for its worst performance since 2010 in July after four consecutive weeks of declines. The world’s reserve currency has been under pressure in recent months after peaking to three-year highs in March. It has since plunged to 22-month lows after a 3% slide against the majors.

A week dollar has given rise to a blockbuster rally in the equity markets with blue-chip companies rallying to record highs. Likewise, Exchange Traded Funds, or ETFs, have continued to arouse strong demand as investors look to gain exposure to the stock market rally.

Greenback weakness has made dollar-dominated assets cheap for foreign investors. In addition, it continues to influence equity returns in Emerging Markets on decreasing the debt servicing costs for international dollar borrowers. Likewise, foreign investors have continued to flock the U.S equity market in pursuit of investment opportunities. Some of the ETFs benefiting from weakness in the U.S dollar include:

iShares Core MSCI Emerging Markets ETF (NYSE:IEMG)

iShares Core MSCI Emerging Markets would be a perfect ETF fit for investors looking to gain exposure to 2,476 mid and small cap companies.

A dividend yield of close to 3.51% awaits investors looking to ride the current bull run with exposure to the financial, information technology consumer discretionary and communication sectors. The ETF consists of large, mid, and small-cap equities with operations in the global emerging markets.

Some of the biggest holdings in the ETF include Alibaba Group Holding Ltd (NYSE: BABA), Tencent Holdings Taiwan Semiconductor Manufacturing, and Samsung Electronics (OTC: SSNLF)

Vanguard Mega Cap Growth ETF (NYSEARCA: MGK)

The bull run in the stock market might as well be attributed to a strong performance by U.S large-cap stocks. Tech companies of the likes of Tesla Inc. (NASDAQ:TSLA) Alphabet Inc. (NASDAQ:GOOGL),, Inc. (NASDAQ: AMZN), and Apple Inc. (NASDAQ: AAPL) are in strong demand as they continue to shrug off the COVID-19 pitfalls, to power to record highs.

Vanguard Mega Cap Growth ETF fits the bill for investors looking to gain a diversified exposure to the largest growth stocks in the U.S. The ETF tracks the CRSP US Mega cap Growth Index. Its portfolio includes 114 securities.

The ETF is ideal for investors looking to gain exposure to information technology stocks and consumer services, financials, and industrials. The fund is up by more than 20%.

Vanguard High Dividend Yield Index Fund ETF (NYSEARCA: VYM)

High dividend yield ETFs is some of the best at a time when cash is key. Vanguard High Dividend Yield Index Fund ETF would be an ideal pick for income-focused investors. The ETF tracks the FTSE High Dividend Yield that invests in companies with above-average dividend yields, excluding REITs.

The ETF consists of value stocks that outperform non-dividend and lower dividend counterparts. The ETF should act as a hedge against the economic uncertainty fueled by the COVID-19 pandemic. It should also provide downside protection by offering outsized payouts, given its sizeable yields.

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