Breaking news: Elon Musk is making headlines, again.

This time, he is looking to buy Twitter and take it private. The decision has received the attention of many, but shocked few. Elon is known for his outspoken commitment to operating as he pleases. With an offer of $43 million, Elon wasn’t playing games.

It seems even that offer won’t be enough, but we’re yet to see how it’ll all play out. The situation has brought significant attention to the intrinsic value of Twitter as a corporation, and free-speech rules on the platform.

So much attention that we’ve shifted our focus away from his trillion-dollar electric vehicle company, Tesla. His grand opening of Gigafactory Texas (Tesla’s global headquarters) and the progress of Gigafactory Berlin have taken a backseat in the media.

Regardless of the drama, Tesla was early to what experts expect to be an EV dominant future. A few narratives of the industry’s current climate:

• The rise of lithium prices
• US providing $5 billion in funding for EV chargers nationwide
• US administration with outspoken support of the shift to EV

Long-term expectations are high for the industry. Not just Tesla, but across all car manufacturers and industry participants. Here are a couple of EV-focused ETFs to consider in your portfolio.

1. iShares Self-Driving EV and Tech ETF (NYSEARCA: IDRV)

This iShares ETF aims to track early-stage and developed companies tied to electric vehicles, battery technology, and autonomous driving technologies. The fund offers exposure on a global scale across several industries and geographies.

Top holdings include Apple, Tesla, Intel, Toyota, Google, Ford, and many more. The fund is well balanced amongst the highest notional value holdings. More broadly, the ETF holds ~45% of consumer discretionary stocks with just over 37% in information technology. The rest is split between industrials, materials, and communication.

IDRV was founded in early 2019 and has averaged an annual return of 24% since then. Here’s how $10,000 has performed over the life of the fund:

$10,000 investment into IDRV, courtesy of iShares

2. Global X Lithium & Battery Tech ETF (NYSEARCA: LIT)

This ETF does not directly hold EV manufacturers but instead invests in the full lithium cycle. This cycle includes mining and refining the metal, as well as the processes necessary to get it through battery production. As we know, lithium is essential to the production of electric vehicles, storage of renewable energy, and the batteries of mobile devices.

LIT’s top holdings include Albemarle, Tesla, Quimica, Samsung, Panasonic, and a slew of others. The fund’s inception was in 2010 and today its net assets sit at just over 4.6 billion dollars. Here is a breakdown of the ETFs sectors and countries:

The ETF is over 20% off of its highs from November 2021 as the markets have cooled off in recent months (especially technology markets). If you’re expecting upside in the lithium and electric vehicle markets long term, LIT is a great avenue to diversified exposure.

Robinhood, eToro, and other Wall Street brokerages estimate that greater than 90% of stock and options day traders lose money over the course of a year.

The statistic seems far off if we were strictly looking at our social media feed as a gauge. Everyone appears to be making money trading penny stocks and buying far out-of-the-money calls. In reality, the 5-10% of people that do profit are disproportionally flaunting their successes across the internet.

The harsh reality is that few people (if anyone) know how the markets will behave on a day-to-day basis. Rarely does any combination of fundamental analysis, narrative chasing, or technical analysis provide you with a profitable strategy for the long term.

For this reason, along with the time and effort it takes to adopt day trading strategies, the far majority of retail investors are better off investing in ETFs and letting the markets work for them. Here are a couple of concise reasons why ETFs are a strong investment vehicle.

1. Simple Market Exposure

You’re likely familiar with US indices like the S&P 500, NASDAQ, Russell 2000, and DOW Jones Industrial Average. A quick recap:

• S&P 500: 500 largest US companies by market capitalization (broad market).
• NASDAQ: Almost all stocks on the NASDAQ stock exchange (tech-heavy).
• Russell 2000: Smallest 2000 stocks by market capitalization in the Russell 3000 Index (small-caps).
• DJIA: 30 prominent US companies, a price-weighted index (“legacy” companies).

Courtesy of Financial Express
Exchange-traded funds offer seamless exposure to these leading indices and many others. Any fund you can dream up likely already exists and can be invested in without the need to purchase each asset individually. ETFs also take the complication out of researching individual companies that people subjectively pick to perform well.

2. Invest in Volatile Sectors with Less Risk

To emphasize again: We think we’re good at picking assets that will outperform a sector. The data says otherwise.

As new industries/sectors emerge in the United States, you’ll hear theses from all over about how it will grow or decline over the next decade, which companies in the sector will perform best, and any other angle that analysts can form an opinion on.

It’s easier to ignore the noise and identify ETFs that will give you exposure to a sector you believe in. Emerging sectors often don’t have clear market winners, and your individual investments will carry greater risk.

A great example of this is in the gambling/sports betting sector. The industry is growing fast, but market share is still shifting between the top players. The iBET Sports Betting & Gaming ETF provides you exposure to the entire industry without needing to take any extended risk on a single company.

3. Flexible & Accessible Trading

Unlike a mutual fund, ETFs offer entry at any time the markets are open. With the comfortable liquidity of many ETFs, you won’t need to worry about getting in and out of a position any time of day. Instantaneous price updates and trade opportunities make ETFs a flexible investment vehicle.

Additionally, ETFs offer access to markets that may otherwise be unavailable. It can be difficult to gain exposure to some international markets, but there are plenty of ETFs that will offer a diversified basket of foreign assets. This could be both continental and national groupings.

For those that don’t trade futures contracts, ETFs act as a bridge that allows everyone to participate in the commodities markets. Whether you’re long gold, corn, wheat, lumber, or all of them, you can find an ETF to serve your needs.

ETFs provide unparalleled trading flexibility and access, all while combating risk through diversified exposure.

We live in a world dominated by money and convenience.

We’re looking to get rich quickly, implement the latest life hacks, and optimize every moment of our time. Well, a large number of us at least. We seek products and services that align with our desire for financial security and a life of leisure. That’s where blended ETFs come in – even more convenient than a traditional ETF. While most ETFs seek to diversify holdings within a single industry, sector, or grouping of assets, blended ETFs combine asset classes that would typically be separated. Think stocks and commodities together, even cryptocurrencies. These funds allow for portfolio diversification in a single financial instrument – saving us time and making us money.

We’ll touch on a few blended ETFs that are offering investors split exposure to a variety of sectors.

The Digital Funds S&P 500 Bitcoin 75/25 Index ETF

This ETF is not yet launched but was recently filed by a new digital asset manager. As the name suggests, it’s a fund that invests 75% into top S&P 500 companies and 25% into Bitcoin futures contracts. It’s important to note that the fund does not invest directly into Bitcoin – it does so through futures contracts and other countries’ ETFs.

The fund’s portfolio manager, Michael Willis, said that the S&P 500 investment provides some stability to the very volatile cryptocurrency market. While the two are quite correlated, the fund’s 75/25 split reduces the volatility through its majority holding being in the traditional financial market.

The two are seen as the leading assets for their respective domains, the S&P 500 for Wall Street and Bitcoin for the greater cryptocurrency market. Digital Funds hopes to launch a spot bitcoin ETF sometime soon, but SEC regulatory hurdles have not yet made this possible for any entity.

If you’re seeking seamless exposure to the cryptocurrency market without having to fully dive in, this ETF serves as a valuable instrument.

WisdomTree Efficient Gold Plus Equity Strategy Fund

WisdomTree’s GDE fund offers simultaneous exposure to large-cap U.S. equities and U.S.-listed gold futures. As the world navigates turbulent times, commodities like gold are often sought out to hedge against inflation and geopolitical concerns. WisdomTree aimed to simplify the investment process by bringing equities and gold together into a single fund.

The fund made a solid case for hedging with gold. Their analysts provided this chart detailing the performance of gold during the S&P 500’s 20 worst quarters.

During these 20 quarters, gold outperformed the S&P 500 by over 18%. Gold has also historically performed well during times of heightened inflation and economic activity, according to their findings.

GDE offers exposure to the top 500 U.S. equities by market capitalization alongside its gold exposure. An investment of $100 would be dispersed as follows: $90 to large-cap U.S. equities, $10 to short-term collateral, and $90 to gold futures layered on top. This yields $180 of exposure to equities and gold.

This is made possible by the fund trading on 1.8x leverage, which magnifies gains and losses (increasing risk). WisdomTree provides a rather unique ETF type with its gold hedge. If you’re bullish on the U.S. equities markets and commodity prices long-term, GDE is a smooth vehicle to gain exposure.

The Russian invasion of Ukraine in the first quarter of 2022 became one of the most widely publicized humanitarian crises in recent years, and for good reason. The world has largely reacted in support of the Ukrainian people. In addition to the humanitarian crisis, a couple of narratives have taken shape in international media:

• Some global commodities are in low supply and continued high demand as a result of the invasion. As expected, commodity prices have seen a general upward trend.
• Whispers of a third world war have continually gotten louder. The chances of this are still uncertain, but the narrative has sent a few global markets into significant volatility.

Many are glued to the news outlets as we await regular status updates. Naturally, this is an opportunity for market participants to do what they do best, speculate. Here are a couple of commodity ETFs to keep on your radar as we head into the second quarter of 2022.

United States 12 Month Oil ETF (NYSEARCA: USL)

USL is essentially an exchange-traded security that mimics the price movements of light, sweet crude oil in West Texas. More specifically, USL uses the near month’s futures contract and the 11 months following. These contracts comprise the “12 months” tracked in the fund. Each contract is equally weighted in the price’s calculation.

As we know, Russia’s invasion and the resulting sanctions have sent oil prices upward. Have a look at USL’s three-month performance on a percentage basis:
USL provides investors seamless exposure to oil prices without the need for a commodity futures account. If you expect continued issues in the world’s supply of oil, USL may be a useful vehicle to invest in.

Invesco DB Commodity Index Tracking Fund (NYSEARCA: DBC)

DBC is an index made up of 14 of the most traded and significant physical commodities in the world. Commodities such as crude oil, gold, wheat, corn, gasoline, aluminum, and soybeans are held in the fund’s portfolio. Its top 10 weightings are as follows:

• 13.09%: NY Harbor USLD
• 12.28%: Brent Crude
• 12.17% Gasoline
• 11.28%: WTI Crude
• 7.12%: Gold
• 6.56%: Wheat
• 6.04%: Aluminum
• 5.83%: Soybeans
• 5.69%: Corn
• 5.64%: Natural Gas

The index is up over 43% in the past year alone. Unsurprisingly, it has seen a 15% increase year-to-date. In addition to its positive price action, DBC also provides a $0.25 annual dividend to holders with 160 million shares outstanding and nearly $4 billion in net assets. Its price action is quite correlated to the price of oil, as expected. Compare the three-month chart to USL’s price trend:

DBC is a convenient approach to a diversified commodity portfolio. The ETF allows for access without any approval or account needed for commodities trading. Commodity prices have been a strong narrative recently, and are likely to continue to be so. If you’re bullish, DBC is a well-rounded fund to consider.

With inflation on the rise and interest rates on their way up, one interesting strategy to combat these conditions, is to choose companies that have low Price to Earnings Ratios. From Investopedia, The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.

In times of inflation, generally Banks and Energy have done well. We have already seen the move in Energy YTD, and we are still waiting on the move in the Banks, generally both of these types of investments have low P/E ratios. Conversely, in this same environment with interest rates on the rise, it makes sense that highly indebted companies do poorly. The worst companies to invest in when rates rise are the ones that have the most debt. With that said, it could be a good strategy to look at ETFs with low P/E ratios. Here are a few to take a look at.

(VSS) Vanguard FTSE All-World ex-US Small-Cap ETF – P/E 6.0

The Fund tracks the performance of the FTSE Global Small Cap ex US Index and is passively managed, using index sampling and offers a low expense rate of .07%. The funds top 5 holdings are, WSP Global Inc., First Quantum Minerals Ltd., Open Text Corp., Emera Inc. and Kirkland Lake Gold Ltd. YTD the fund has not performed well, but in line with the overall market, down 12.06%. The fund does offer a dividend of 3.10%.

(DWAS) Invesco DWA SmallCap Momentum ETF – P/E 6.0

The Invesco DWA SmallCap Momentum ETF (Fund) is based on the Dorsey Wright® SmallCap Technical Leaders Index (Index). The Fund will normally invest at least 90% of its total assets in equity securities of small capitalization companies that comprise the Index. The Fund offers an expense rate of .60%. The Funds top 5 holdings are , LSB Industries Inc, Weatherford International, SM Energy Co, Casella Waste Systems Inc and Ameresco Inc. YTD the fund is down 9% and does yields a small dividend of .17%

(FGD) First Trust Dow Jones Global Select Dividend Index Fund – P/E 7.80

The objective of the Fund is to seek investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the Dow Jones Global Select Dividend Index. The Fund offers an expense rate of .57%. The top 5 holdings of the fund are, Labrador Iron Ore Royalty Corp., Enagas S.A, British American Tobacco Plc, Woori Financial Group Inc., and Telefonica, S.A. YTD the fund has outperformed the SP 500, down 3.63%. The fund does offer a dividend of 5.51%.

ETFs are an evergreen method of gaining exposure to a basket of assets. In the United States, there are countless ETFs to choose from. You name it, and you’ll be sure to find someone who has compiled an ETF to accommodate it. Sometimes these ETFs go a bit off the deep end and generate little to no trading volume. Many ETFs do provide value though. They give meaningful exposure to a sector, industry, or even country. That last one is what we’ll touch on today.

China has seen significant downward price action in recent times. Over the past year, the Hang Seng Index (top Hong Kong stock index) has experienced a 29% reduction in value. We’ve seen companies like Alibaba, Tencent, and Baidu with downswings even larger than that.

Let’s jump into a few ETFs that will allow you to speculate on the Chinese markets. We’ll discuss some options for both the bulls and bears.

iShares MSCI China ETF (NASDAQ: MCHI)

The iShares description sums up this ETF well:

• Exposure to large and mid-sized companies in China
• Targeted access across the Chinese stock market
• Used to express a single country view

I’m a fan of this ETF because it offers strong exposure to some of the more modern consumer discretionary stocks of China. Its top holdings are Tencent Holdings LTD (13.17%), Alibaba Group Holding LTD (8.67%), and Meituan (3.61%).

Over the past year, it is down over 31%. It’s followed pretty closely to the Hong Kong HSI, but has fared a bit worse due to stronger down moves in the mid-cap holdings.

Depending on your expectations for Chinese stock performance in the remainder of 2022, this could be an ideal entry point or one to stay away from entirely.

KraneShares CICC China 5G & Semiconductor Index ETF (NYSE: KFVG)

The KraneShares ETF will give you strong exposure to technologies emerging in China – specifically 5G and semiconductor companies. These include companies listed in Mainland China, Hong Kong, and the United States.

With just over 50 holdings, the fund is well diversified. Here are the top 5:

• 7.37%: Luxshare Precision Industry Co LTD ORD
• 7.22%: Xiaomi Corp
• 6.01%: Foxconn Industrial Internet Co LTD ORD
• 5.55%: Will Semiconductor Co LTD Shanghai ORD
• 5.42%: NAURA Technology Group Co LTD ORD

The ETF is currently sitting near the bottom of its 52-week range. This is no surprise, given the performance of the broader Chinese markets. The fund hasn’t seen as sharp of a down move over the past year, since the sector as a whole continues to grow in demand.

The world relies heavily on tech manufacturing from China, and if you expect that narrative to continue, this is an ETF with clean exposure to it.

Direxion Daily FTSE China Bear 3X Shares (NYSE: YANG)

This ETF is for the China bears. And right now, there are a lot of them. YANG is a fund providing -3x leveraged exposure to the 50 largest stocks traded in Hong Kong by market capitalization. Given the Chinese market’s decline in recent weeks, you can imagine how well this ETF has performed.

The fund is up over 82% in the past month, with a 13.5% gain in just one day on March 10. It trades about 1.5 million shares a day on average, producing just under $30 million in volume. It’s seen especially high volume in recent weeks.

Analysts aren’t sure how much longer this grind up will last, but if you continue to be bearish on Hong Kong’s top companies, jump in for a -3x ride!