Despite mass layoffs, the recent employment report indicated stronger-than-expected hiring growth amid uncertain macroeconomic conditions. A robust labor market might encourage the Fed to continue tightening its policy. Minutes from the Federal Reserve’s policy meeting released last week showed that the central bank intends to keep higher rates for ‘some time’ ahead.
Although cooling inflation for two straight months has raised hopes of a soft landing among investors, with widespread recession fears and the central bank’s hawkish monetary policy outlook, the stock market will likely remain under pressure.
Exchange-traded funds (ETFs) allow investors to buy a basket of stocks, bonds, or commodities in just one fund with low expenses. Hence, instead of being completely tied to the ebb and flow of single-stock ideas, one can gain access to a broad number of similar opportunities at a low price.
Therefore, with growing uncertainty around a market rebound, it could be ideal to buy and hold under-$50 ETFs iShares Silver Trust (SLV) and First Trust Low Duration Opportunities ETF (LMBS), which seem well-positioned to navigate a risky environment.
iShares Silver Trust (SLV)
SLV invests in the commodity markets and aims to invest in silver. The fund seeks to track the daily performance of the price of silver bullion and reflect such performance before payment of the trust's expenses and liabilities.
As of January 9, SLV had $11.18 billion in net assets and a net asset value (NAV) of $21.94. Its expense ratio of 0.50% compares to the category average of 0.48%. The fund has only one holding of silver with a 100% weight.
The fund’s net inflows came in at $38.05 million over the past five days. SLV has gained 22.2% over the past six months and 7.5% over the past three months to close the last trading session at $21.74. It has a five-year beta of 0.85.
SLV’s solid prospects are reflected in its POWR Ratings. The ETF has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The ETF has an A grade for Trade and a B for Buy & Hold. Among the 38 ETFs in the B-rated Precious Metals ETFs group, SLV is ranked #9. To see SLV’s rating for Peer, click here.
First Trust Low Duration Opportunities ETF (LMBS)
LMBS invests at least 60% of its net assets (including investment borrowings) in mortgage-related debt securities and other mortgage-related instruments. The fund is actively managed and seeks to generate current income with a secondary objective of capital appreciation.
As of January 9, LMBS has a NAV of $47.94 and $4.67 billion in total net assets. Its expense ratio of 0.66% compares with the category average of 0.31%. The fund’s trailing-12-month dividend of $1.05 yields 2.20% on the current share price. It has a four-year average yield of 2.30%.
The fund’s top holdings include U.S. Dollar with a 2.71% weight, UMBS TBA 30yr 3.5% March Delivery 3.500% 01-JUL-2052 with a 2.50% weight, and FNMA 30yr Pool#FM3003 4.000% 01-May-2049 4.0% 01-MAY-2049 with a 2.09% weight.
Its net inflows came in at $1.19 billion over the past three years and $4.16 billion over the past five years. The fund has gained marginally over the past three months to close its last trading session at $47.85. It has a five-year beta of 0.30.
LMBS’ strong fundamentals are reflected in its POWR Ratings. The ETF has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.
It has an A grade for Trade, Buy & Hold, and Peer. In the 49-ETF B-rated Intermediate-Term Bond ETFs group, it is ranked #2. Click here to see all the POWR Ratings of LMBS.
SLV shares were trading at $21.74 per share on Tuesday morning, down $0.00 (0.00%). Year-to-date, SLV has declined -1.27%, versus a 1.37% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
2 ETFs Under $50 to Buy and Hold in 2023 StockNews.com
