Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

2 ETFs For Shelter From Any “Economic Hurricanes”

By Investing.com (Tezcan Gecgil/Investing.com )ETFsJun 06, 2022 03:40
ca.investing.com/analysis/2-etfs-for-shelter-from-any-economic-hurricanes-200511444
2 ETFs For Shelter From Any “Economic Hurricanes”
By Investing.com (Tezcan Gecgil/Investing.com )   |  Jun 06, 2022 03:40
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
LNG
+0.97%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ENB
-0.89%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
PDBC
-1.22%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TPYP
-0.94%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TIPX
-0.49%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
RWR
+1.35%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

At a banking conference on June 1, Jamie Dimon, the much followed CEO of JPMorgan Chase said about the US economy:

"It's a hurricane."

"Right now, it's kind of sunny, things are doing fine. Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. We just don't know if it's a minor one or Superstorm Sandy."

He added: “you better brace yourself.”

Last week also saw similar dire remarks from John Waldron, COO of Goldman Sachs and Elon Musk, CEO of Tesla. All these warning come after Jane Fraser, CEO of Citigroup, said:

“There are three Rwords right now. Its Russia, Recession and Rates.”

As a result of such poor sentiment on Wall Street, the S&P 500 index has lost over 0.5% since the start of June, pushing the broad benchmark's decline to 13.5% year-to-date (YTD). Financial shares, including banks and credit card issuers, have suffered significantly since the end of May. For instance, Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and American Express (NYSE:AXP) have dropped roughly 3.9%, 2.1%, and 1.2%, respectively.

Nevertheless, the next move for the economy and most stocks isn't easy to predict. According to Dimon, his bank’s balance sheet will be positioned conservatively. Still, he believes the US consumer remains strong, in part thanks to a healthy job market.

Today’s article, therefore, introduces two exchange-traded funds (ETFs) that could also help readers take more defensive steps in portfolio construction. These funds could particularly appeal to passive income-focused readers.

1. SPDR SSGA Multi-Asset Real Return ETF

  • Current Price: $31.79
  • 52-week range: $26.80 - $32.34
  • Dividend yield: 10.48%
  • Expense ratio: 0.50% per year

Multi-asset ETFs differ from more traditional equity funds that track the performance of a specific benchmark. Many multi-asset funds invest in a range of asset classes, including stocks, fixed income, commodities or real estate.

Our first choice, the SPDR® SSGA Multi-Asset Real Return ETF (NYSE:RLY), invests in other ETFs to generate current income and achieve some capital appreciation. This actively managed fund started trading in April 2012.

RLY Weekly
RLY Weekly

In terms of asset allocations, we see natural resources (34.5%), global infrastructure (23.1%), commodities (24.9%), and real estate (7.7%). RLY holds 11 other funds, three of which comprise roughly three-quarters of $443 million in net assets. Top holdings include:

SPDR® S&P Global Natural Resources ETF (NYSE:GNR)—up 15.5% YTD;

Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (NASDAQ:PDBC)—up 43.9% YTD;

SPDR® S&P Global Infrastructure ETF (NYSE:GII)—up 6.9% YTD;

SPDR Bloomberg 1-10 Year TIPS ETF (NYSE:TIPX)—down 5.4% YTD; and

SPDR® Dow Jones REIT ETF (NYSE:RWR)—down 15.7% YTD.

RLY hit a record high on Apr. 21, and has returned 17.7% since January. Readers who expect that the combination of quantitative models employed as well as the active management style of the fund may bring more returns should keep RLY on their radar.

2. Tortoise North American Pipeline Fund

  • Current Price: $28.01
  • 52-week range: $20.77 - $28.10
  • Dividend yield: 3.98%
  • Expense ratio: 0.40% per year

Next up is the Tortoise North American Pipeline Fund (NYSE:TPYP), a passively managed fund, which mainly provides broad exposure to the energy pipeline sector space in North America. It started trading in June 2015.

TPYP Weekly
TPYP Weekly

TPYP has 52 holdings, where the leading 10 comprise roughly 60% of $596 million in net assets. These pipeline names may be structured as corporations, limited liability companies (LLCs) or Master Limited Partnerships (MLPs)—a topic we regularly cover.

More than half of the fund's portfolio comes from the natural gas pipelines sector. Next are local gas-distribution companies (19%), crude oil pipelines (15%), gathering and processing (8%), and refined products pipelines (5%).

The Williams Companies (NYSE:WMB), Enbridge (TSX:ENB) (NYSE:ENB), TC Energy (TSX:TRP) (NYSE:TRP), Kinder Morgan (NYSE:KMI), Enterprise Products Partners (NYSE:EPD) and Cheniere Energy (NYSE:LNG) are among the leading energy names on the roster.

TPYP, which recently saw an all-time high, is up 26% YTD. Investors who see continued strength in the broader energy space should research this ETF further.

2 ETFs For Shelter From Any “Economic Hurricanes”
 

Related Articles

2 ETFs For Shelter From Any “Economic Hurricanes”

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email