ETF Investing

Best Stocks for 2018: REMX Shows the Market Overwhelming Fundamentals

Demand for rare earth metals continues to increase, but the prices traders are willing to pay for those stocks in the face of escalating trade-war rhetoric are falling dramatically. Read Article

Best ETFs for 2018: Invesco Water Resources ETF is Worth the Wait

The Invesco Water Resources ETF hasn't outpaced the overall market so far this year, but stick with the PHO ETF. It was always going to be a war, and not just a battle. Read Article

3 Tech ETFs Upgraded to Top Rank Amid Trade Fears

Investors could tap the current dip in tech stocks via ETFs whose rank have moved up to top hierarchy by two notches. Compare Brokers.... Read Article

Best ETFs for 2018: Emerging Markets Set to Dominate in the Second Half

This article is a part of InvestorPlace’s Best ETFs for 2018 contest. Charles Sizemore’s pick for the contest is the iShares Emerging Markets Dividend ETF (NYSEARCA:DVYE). As we approach the halfway mark of 2018, my pick in InvestorPlace’s Best ETFs for 2018 isn’t off to the best of starts. At time of writing, the iShares Emerging Markets Dividend ETF (NYSEARCA:DVYE) is down about 6%.

We still have six months left to go in 2018, and I consider DVYE to still be in the race. When emerging market stocks move, they really move. Furthermore, the leader at the halfway mark -- Todd Shriber’s ALPS Medical Breakthroughs ETF (NYSEARCA:SBIO) -- is up only 16%.

In a volatile year like 2018, that is by no means a safe lead.

Furthermore, apart from Kent Thune’s Energy Select SPDR ETF (NYSEARCA:XLE), James Brumley’s Powershares Water Resource Portfolio (NYSEARCA:PHO) and Jeff Reeve’s Vanguard FTSE All-World ex-US Small-Cap ETF (NYSEARCA:VSS), literally every other contestant is long technology or biotechnology. Even John Jagerson and Wade Hansen’s choice of the Market Vectors Rare Earth ETF (NYSEARCA:REMX) is indirectly a tech play, as rare earths are used in batteries and other tech components.

The long-tech trade is extremely long in the tooth at this stage of the bull market. I believe the next stage of the bull will favor value sectors and overseas stocks that have largely missed out on the gains of recent years.

So, come December, don’t be surprised if DVYE is duking it out with XLE and VSS for first place.

In the meantime, let’s go over why I believe emerging markets make sense ... and why the sector has struggled of late.

The Case for DVYE

I’ll start with the second question. Emerging markets took a hit in February, along with the rest of the stock market, due mostly to the market being overbought and to fears over rising bond yields. But while U.S. stocks have since mostly recovered, most non-U.S. stocks have not.

Part of this is due to dollar strength. The dollar has been on fire since early April, and a stronger dollar means that stocks dominated in foreign currencies have an extra currency hurdle to jump. Political instability, particularly in Turkey and Venezuela, hasn’t helped either.

But the far larger specter looming over non-U.S. stocks is the escalating trade war. Thus far, it has been mostly a war of words, but the fear is that it gets out of hand. The U.S. would “win” a trade war (if you can really define it as “winning”) in the sense that most emerging markets depend more heavily on exports and are thus more exposed. This fear is taking its toll on emerging market stock prices.

Perhaps I’m an optimist, but I believe this trade war will come to a head soon. Perhaps I’m overly optimistic, but I suspect this is some sort of bargaining tool.

But even if I’m wrong about that, my biggest reason for staying long and strong emerging markets is valuation. According to data compiled by Star Capital, the United States is one of the most expensive markets in the world, with a cyclically adjusted price/earnings (“CAPE”) ratio of over 30.

Emerging markets as a group trade at a CAPE of just 16.8. And the three countries that make up largest allocation to DVYE -- Taiwan, Russia and China -- sport CAPEs of 21.4, 6.4 and 18.6, respectively.

Furthermore, the recent declines have to be taken in context. Like virtually all emerging market stocks, DVYE endured several years of bear market misery that only ended in early 2016. From that bottom until the top earlier this year, DVYE popped by about 80%. For now, I'm viewing the correction in 2018 as being normal profit taking that is part of a much larger multi-year move higher. Time will tell, of course. And emerging market investors have certainly had their fair share of disappointment over the past decade. But if you believe, as I do, that U.S. stocks are due to cede leadership to their foreign peers for a at least the next couple of years, then having DVYE in your portfolio makes sense. As of this writing, Charles Sizemore was long DVYE.

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Sizing Up 4 Small-Cap ETFs

Small-caps typically perform better than large-caps when interest rates rise and the dollar strengthens, as is happening in the current environment. Read Article

15 Top-Ranked Sector ETFs to Buy for Q3

These sector ETFs have a Zacks Rank #1 or 2 and are likely to outperform ahead. Compare Brokers.... Read Article

9 Sector ETFs That Braved Trade Turmoil in Q2

Sector ETFs that have won in Q2 braving a host of issues. Compare Brokers.... Read Article

The 7 Best Utilities ETFs

Utilities ETFs are typically less volatile and higher yielding than other sector funds; therefore, utilities ETFs can be accurate tells regarding investors' level of risk appetite in various market environments. Read Article

5 ETFs to Hedge Stock Market Volatility

In order to make the most of the encouraging trend amid volatility, investors should apply some hedge techniques to their equity portfolio. For them, we have hi.... Read Article

Chip ETFs Tumble as Trade Fears Intensify: Time to Buy?

Chip stocks were the hardest hit by escalating trade tensions with Beijing. Despite this, the outlook for the semiconductor sector is solid. Compare Brokers.... Read Article

Best ETFs for 2018: Cloud SuperCycle Drives VanEch Semiconductor ETF Higher

Semiconductor companies are winning with new cloud builds, cloud upgrades and, soon, with 5G base stations and equipment. Read Article

6 Small-Cap ETFs That Have Surged to #1 This Summer

The escalating trade tensions and bouts of upbeat data are acting as a major tailwind for the small-cap stocks. Compare Brokers.... Read Article

3 International ETFs to Grow Your Capital

Europe has been something of a trouble spot for international ETFs this year, but there are still opportunities for forward-looking investors to grow their capital. Read Article

Should You Invest in Emerging Market ETFs Right Now?

Should investors pile into emerging market ETFs? Investors should avoid wading into the water blindly, as there are a lot of pitfalls to beware of. However, opportunity can arise if investors choose wisely. Read Article

Build a Total Portfolio With Just 5 Vanguard ETFs

Want to build a diversified portfolio? Vanguard ETFs make that process easy. Here are 5 great core choices. Read Article

6 Small-Cap ETFs at 52-Week High With More Room to Run

Trade war fears have taken Wall Street in its grip and these small-cap ETFs are enjoying high momentum. Compare Brokers.... Read Article

5 ETFs to Benefit From 6-Year High U.S. Inflation

Why these ETF areas can gain in an inflationary environment. Compare Brokers.... Read Article

5 Low-Beta ETFs to Overcome Trade Jitters

Investors seeking to remain invested in the equity world but at the same time wanting protection from the downside arising from the ongoing trade jitters should.... Read Article

How Interest Rate Hikes Can Soften Bond Prices and Bond-Heavy ETFs

Even with the potential vulnerability of bond prices, bond funds remain popular destinations for investors. When it comes to exchange traded funds (ETFs), three of this year's top 10 ETFs in terms of new assets added are bond funds. Still, investors' enthusiasm for some fixed income funds should obfuscate the myriad issues facing bond prices. Read Article

Try These 3 Dividend Funds for Reliable Payout Growth

Providing a lift for income investors and dividend funds is the fact that the rate at which companies are boosting payout is climbing as well. That is good news for dividend investors, particularly at a time when interest rates are rising. Read Article