Signs of progress in trade talks between the US and China, a dovish Fed and a vigorous labor market have pushed Wall Street up this year. But the positive trend seems to have recently reversed, as the latest set of economic data around the world has deepened fears of slowing global growth and clouded prospects for a US-China deal. This is particularly true since the European Commission (EU) slashed economic policy growth forecasts for the euro area, comprising 19 countries using the euro, at 1.3% compared to the previous forecast of 1.9% . The EU cited the sharp deterioration in world trade and the slowdown in China as the main bottlenecks in the economy. At the same time, the Bank of England warned that the economy was on track for the weakest growth recorded since the global financial crisis due to the uncertainty associated with Brexit. As such, the bank has lowered the economic growth forecast for this year from 1.7% to 1.2% (read: Concerned about European growth – these 5 ETFs). The Chinese factories' activity contracted for the second consecutive month in January, a sign of a further slowdown in the world. In addition, the World Bank has recently reduced the global growth forecast to 3.9%. % for this year compared with the previous forecast of 3%, due to the increasing tension of trade, slowing of manufacturing activity and increasing financial strains in emerging market countries. The International Monetary Fund also lowered its growth forecast by 0.2 point to 3.5% due to the weakness of Germany and Turkey. In addition, the agency worries about the impossibility of resolving trade tensions that could further destabilize the slowdown in the global economy.In addition, the latest report indicates that US President Donald Trump and Chinese President Xi Jinping are unlikely to meet before the March 1 deadline. trade agreement.The weakened Chinese and European economy, coupled with impending trade tensions, remains a threat to the strength of the US economy. In such a context, investors should focus on high quality investments.Why invest in quality?Quality equities are rich in value characteristics with a healthy balance sheet, high capital return, low volatility, high margins and a history of stable or rising sales and earnings growth. These products reduce volatility compared to plain vanilla funds and withstand market fluctuations fairly well. In addition, academic research shows that high-quality firms consistently offer risk-adjusted returns over the long-term market in general. That being said, we have highlighted five ETFs and actions targeting this niche strategy. These could benefit from smooth transactions and generate above-market returns in the current environment.Choice of ETF The MSCI USA iShares Edge Fund QUALThis ETF Quality Factor This fund offers exposure to large- and mid-cap stocks with positive fundamentals (high return on equity, stable earnings growth and low leverage) by following the rules. neutral quality index of the MSCI USA sector. Expenditure ratio: 0.15%
Assets under management: $ 9.3 billion
Average daily volume: 1.2 million shares
Top Sector: Information TechnologiesInvesco S & P 500 ETF in SPHQ QualityThis fund follows the S & P 500 quality index, the S & P 500 Index's benchmark stock index, which has the highest quality score based on three fundamental metrics: Return on Equity, Ratio of Adjustment and Leverage Ratio (read: Why Buy High Quality ETFs for 2019). Expenditure ratio: 0.15%
Assets under management: $ 1.3 billion
Average daily volume: 349,000 shares
Top Sector: Information TechnologiesBarron 400 ETF BFORThis ETF seeks to track the performance of the Barron's 400 Index, which is based on rules and fundamental principles. The benchmark uses MarketGrader's fundamental analysis to select the best-performing US stocks based on growth, valuation, profitability and cash flow. Expense Report: 0.65%
AUM: $ 157.5 million
Average daily volume: 11,000 shares
Top sector: IndustrialFlexShares QDF Premium Dividend Index FundThis ETF follows the Northern Trust Quality Dividend Index and optimizes its exposure to quality and dividends while maintaining a beta of almost 1. Expense Ratio: 0.37%
Assets under management: $ 1.7 billion
Average daily volume: 130,000 shares
Top Sector: Information TechnologiesSPDR MSCI USA StrategicFactors ETF QUSThis fund offers exposure to equities that combine value, low volatility and quality factors. To do this, follow the MSCI USA Series A Factor Combination Index (read: Best ETF Ideas for 2019). Expenditure ratio: 0.15%
AUM: $ 166 million
Average daily volume: 20,000 shares
Top Sector: Information TechnologiesStock PicksTo know the best stocks in this space, we used the Zacks stock screener. The parameters include a rank of Zacks # 1 (strong buy) or 2 (buy), a VGM score of A or B, a return on equity of at least 10%, a lower debt ratio at 1, positive of five. historical Two-year annual EPS, double-digit growth in net income for the current year, estimated revisions to current year's earnings in the last 30 days, and dividend yield greater than 1%.Allstate Corporation ALLIt is the largest publicly owned and publicly owned P & C insurer serving more than 16 million households in the country (read: Fourth Quarter Income Insurance ETFs are on the rise) .Zacks Rank: # 2
VGM score: B
ROE: 14%
Debt / Equity: 0.33
5-year historical EPS growth: 8.55%
Revenue growth of the financial year: 14.50%
Positive revisions to the 30-day result estimate: 0.37%
Dividend yield: 1.99%Steelcase Inc. SCSIt is a designer and manufacturer of products used to create high performance work environments. You can see the complete list of current stocks of Zacks # 1.Zacks Rank: # 1
VGM Score: A
ROE: 15.91%
Debt / Equity: 0.34
5-year historical EPS growth: 3.18%
Revenue growth in the financial year: 75.8%
Positive revisions to the 30-day earnings estimate: 29.67%
Dividend yield: 3.23%Progressive Corporation PGRThis service provides damage insurance to personal and commercial property as well as other specialized services, primarily in the United States.Zacks Rank: # 1
VGM score: B
ROE: 24.54%
Debt / equity: 0.41
5-year historical EPS growth: 17.26%
Fiscal year revenue growth: 13.35%
Positive revisions to the 30-day result estimate: 2.02%
Dividend yield: 3.68%Alaska Air Group Inc. ALKAlaska Air Group, through its affiliates, provides air passenger and cargo services.Zacks Rank: # 2
VGM score: B
ROE: 15.20%
Debt / Equity: 0.43
5-year historical EPS growth rate: 11.27%
Revenue growth in the financial year: 50.45%
Positive revisions to the 30-day outcome estimate: 4.54%
Dividend yield: 1.96%Southwest Airlines Co. LUVIt is a major national airline that provides mainly low-cost, high-frequency and high-frequency flights (read: Airlines ETF strongly up on T4 results) .Zacks Rank: # 2
VGM Score: A
ROE: 24.56%
Debt / Equity: 0.45
5-year historical EPS growth: 21.16%
Revenue growth in the financial year: 21.23%
Positive revisions to the 30-day outcome estimate: 7.33%
Dividend yield: 1.11%Bottom lineETFs and quality stocks often provide hedging against market volatility. The addition of any of the above products to their long-term portfolio could be a good thing, given their creditworthiness and strength.Want to receive key information about ETFs directly in your inbox?The free Zacks fund newsletter will keep you up-to-date on the latest news and analysis, as well as top-performing ETFs. Get it free >>
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