Written by Amy Legate-Wolfe at The Motley Fool Canada
Exchange-traded funds (ETF) are like the market’s comeback tour. When the economy starts to bounce back, these funds offer a front-row seat to the action. Why? Because these spread your money across a basket of stocks, which means you’re not putting all your eggs in one basket. It’s a bit like having your own mini-mutual fund without the high fees. In fact, in 2023 alone, ETFs globally saw an influx of over US$1 trillion in new investments. This proves just how popular they’ve become for savvy investors looking to ride the recovery wave.
But it’s not just about safety in numbers. ETFs can also help you tap into specific sectors that are leading the charge. For example, during the post-pandemic rebound, technology-focused ETFs surged by over 25% in a year thanks to the rapid adoption of digital solutions. And with the ability to start investing with just a few dollars, ETFs are an accessible way to get your portfolio back on track, whether you’re looking for growth, income, or a bit of both.
XQLT
iShares MSCI USA Quality Factor Index ETF (TSX:XQLT) is like having a VIP pass to some of the most quality-driven companies on the planet. This fund is all about backing businesses with strong financial health, solid growth prospects, and a knack for delivering shareholder value. We’re talking about household names like Apple, Microsoft, and Johnson & Johnson, companies that have proven they can thrive even in tough times. It’s like building your dream team of stocks, with only the best of the best making the cut.
But it’s not just the tech giants that get a spot on this roster. XQLT also spreads the love across various sectors, including healthcare, consumer goods, and financial services. This ensures your investments are well-rounded. By investing in XQLT, you’re essentially putting your money into businesses that have a track record of delivering consistent returns while maintaining a healthy balance sheet — perfect for those looking to ride the market’s ups and downs with confidence.
Value on value
XQLT ETF is like the all-star of ETFs, with a focus on high-quality companies that have a solid track record of financial performance. The fund has had a stellar year so far, boasting a year-to-date (YTD) return of 22.78%, which shows it’s riding the market recovery wave pretty well. Plus, with a relatively low expense ratio, you’re not giving away too much of your returns in fees.
On the flip side, the yield is on the lower side at 0.67%. This means it’s more of a growth play than an income generator. But if you’re looking for an ETF that gives you exposure to some of the best-run companies in the United States market, XQLT is definitely a strong contender. Its focus on quality means it could offer some resilience during market downturns. This makes it a solid choice for long-term investors who want to balance growth with stability.
Looking ahead
XQLT ETF will be like your safety net with benefits during a market recovery. It’s packed with high-quality companies that have not only weathered storms but often come out stronger. When markets are bouncing back, you want to be in on the action with stocks that have solid financials, consistent earnings, and a history of delivering for their shareholders. XQLT focuses on just those kinds of companies. These aren’t just survivors but thrivers ready to take advantage of the upswing.
Yet, it’s not just about the big names. XQLT is diversified across various sectors, meaning your investment isn’t riding on the fortunes of just one industry. This spread helps reduce risk while still positioning you to benefit from the broader market recovery. Now, it’s clear that XQLT is already making the most of the market’s rebound. So, if you’re looking for a smart, stable way to get back in the game, XQLT offers a balanced approach with the potential for some serious gains.
The post 1 ETF I’m Buying Hand Over Fist in September as Markets Recover appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has positions in Microsoft and iShares Msci Usa Quality Factor Index ETF. The Motley Fool recommends Apple, Johnson & Johnson, and Microsoft. The Motley Fool has a disclosure policy.
2024