Five Safe-Haven ETFs to Shield Your Portfolio Amid Trade Tensions
Trade tensions between the world’s two largest economies, the United States and China, have been escalating for quite some time now. The ongoing trade war has left investors on edge, uncertain about the future of their investments. In times of economic uncertainty, it is essential to have a well-diversified portfolio. In this blog post, we will discuss five safe-haven ETFs that could help protect your investment from trade-related volatility.
1. iShares Gold Trust (IAU)
Gold is often considered a safe-haven asset. The yellow metal has historically held its value during times of economic instability, making it an attractive investment during trade tensions. The iShares Gold Trust (IAU) is an ETF that aims to track the price of gold. With a low expense ratio of 0.25%, this ETF is an excellent choice for investors looking to add some gold exposure to their portfolios.
2. iShares MSCI ACWI Low Carbon Target ETF (CRBN)
Trade tensions can lead to increased volatility in the stock market. One way to mitigate this risk is by investing in low-volatility stocks. The iShares MSCI ACWI Low Carbon Target ETF (CRBN) is an ETF that tracks low-carbon, low-volatility stocks from developed and emerging markets. With a low expense ratio of 0.15%, this ETF is an excellent choice for risk-averse investors looking to shield their portfolios from trade-related volatility.
3. iShares 20+ Year Treasury Bond ETF (TLT)
Bonds, particularly long-term bonds, are often considered safe-haven assets. They offer a stable income stream and a lower risk profile compared to stocks. The iShares 20+ Year Treasury Bond ETF (TLT) is an ETF that tracks the performance of the US Treasury 20+ Year Bond Index. With a low expense ratio of 0.15%, this ETF is an excellent choice for income-seeking investors looking to add some stability to their portfolios during times of trade uncertainty.
4. iShares Short-Term Corporate Bond ETF (IGSB)
Another type of bond that investors can consider during trade tensions is short-term corporate bonds. These bonds offer a higher yield compared to government bonds while still providing a lower risk profile than stocks. The iShares Short-Term Corporate Bond ETF (IGSB) is an ETF that tracks the performance of the ICE BofAML 1-5 Year US Corporate Bond Index. With a low expense ratio of 0.05%, this ETF is an excellent choice for income-seeking investors looking for a lower risk profile.
5. iShares MSCI World ex EM Utilities Sector UCITS ETF (IDUT)
Utilities are another type of safe-haven asset. They are essential services that are always in demand, making them a stable investment during times of economic uncertainty. The iShares MSCI World ex EM Utilities Sector UCITS ETF (IDUT) is an ETF that tracks the performance of the MSCI World ex EM Utilities Sector Index. With a low expense ratio of 0.35%, this ETF is an excellent choice for investors looking to add some stability to their portfolios by investing in the utilities sector.
Effect on Individuals:
As an individual investor, trade tensions can lead to increased volatility in your portfolio. By investing in safe-haven ETFs, you can help protect your investments from the negative effects of trade tensions. These ETFs offer a lower risk profile compared to stocks and can help provide stability and income during uncertain economic conditions.
Effect on the World:
Trade tensions can have a significant impact on the global economy. They can lead to decreased trade, reduced business confidence, and increased uncertainty. Safe-haven assets, such as gold and bonds, can help provide some stability during these uncertain economic conditions. Central banks may also respond to trade tensions by lowering interest rates to stimulate economic growth.
In conclusion, trade tensions can lead to increased volatility in the stock market and uncertainty in the global economy. By investing in safe-haven ETFs, such as gold, low-volatility stocks, long-term bonds, short-term corporate bonds, and utilities, individuals can help protect their investments and provide stability during these uncertain economic conditions. These ETFs offer a lower risk profile and can help provide income and stability during times of trade uncertainty. Additionally, trade tensions can have a significant impact on the global economy, leading to decreased trade, reduced business confidence, and increased uncertainty. Central banks may respond to trade tensions by lowering interest rates to stimulate economic growth. By being aware of these factors and investing in safe-haven ETFs, individuals can help protect their investments and prepare for the potential effects of trade tensions on the global economy.
- Gold is a historical safe-haven asset
- Low-volatility stocks can help mitigate market risk
- Long-term bonds offer stable income and lower risk
- Short-term corporate bonds offer higher yields with lower risk
- Utilities are essential services and offer stability
- Trade tensions can lead to increased volatility and uncertainty
- Safe-haven ETFs can help provide stability and income during uncertain economic conditions
- Central banks may respond to trade tensions by lowering interest rates
