October’s CPI data showed signs of inflation cooling down. Minutes from the Federal Reserve’s policy meeting released last month showed that the central bank intends to slow down the current pace of rate hikes.
However, the recent employment report indicated stronger-than-expected hiring momentum amid uncertain macroeconomic conditions. Despite mass layoffs, demand for workers continues to outpace the number of unemployed people looking for work. Such a robust labor market is expected to encourage the Fed to continue tightening its policy.
With recession fears looming, the market could remain under pressure in the near term. Therefore, investors could hedge their portfolios against the economic downturn by adding ETFs Vanguard Value Index Fund (VTV) and iShares iBoxx $ High Yield Corporate Bond ETF (HYG). These ETFs’ diverse holdings could help investors generate stable returns.
Vanguard Value Index Fund (VTV)
The Vanguard Group, Inc, manages VTV. It invests in value stocks of large-cap companies. It seeks to track the performance of the CRSP US Large Cap Value Index. The investment seeks to track the performance of the CRSP US Large Cap Value Index, which measures the investment return of large-cap value stocks.
As of December 02, VTV had $102.10 billion in assets under management (AUM) and a Net Asset Value (NAV) of $145.99. Its expense ratio of 0.04% is significantly lower than the category average of 0.48%.
The fund’s top holdings include UnitedHealth Group Inc (UNH) with a 3.08% weight, Berkshire Hathaway Inc. Class B (BRK.B) with a 3.04% weight, and Exxon Mobil Corporation (XOM) with a 2.74% weight. It has a total of 343 holdings.
The fund’s net inflows came in at $9.87 billion over the past year. VTV has gained 8.7% over the past three months and 4.1% over the past year to close the last trading session at $146.
VTV’s 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. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
iShares iBoxx $ High Yield Corporate Bond ETF (HYG)
BlackRock Fund Advisors manages HYG. The fund invests in fixed-income markets of the globally developed region. It invests in U.S. dollar-denominated high-yield corporate bonds with a maturity of at least one year and less than 15 years and a sub-investment grade rating from Fitch, Moody’s, or S&P. The fund seeks to track the performance of the Markit iBoxx USD Liquid High Yield Index.
As of December 2, HYG had $18.83 billion in assets under management and a NAV of $75.10. Its expense ratio of 0.48% compares to the category average of 0.44%.
The fund’s top holdings include U.S. Dollar with a 1.72% weight, TransDigm, Inc. 6.25% 15-MAR-2026 with a 0.47% weight, and Mozart Debt Merger Sub, Inc. 3.875% 01-APR-2029 with a 0.42% weight. It has a total of 1,219 holdings.
Over the past three months, the fund’s net inflow came in at $5.93 billion. HYG has gained 3.6% over the past month to close its last trading session at $75.56.
HYG’s promising outlook is reflected in its POWR Ratings. The ETF has an overall B rating, equating to a Buy in our proprietary rating system.
Want More Great Investing Ideas?
VTV shares were trading at $143.34 per share on Monday afternoon, down $2.66 (-1.82%). Year-to-date, VTV has declined -0.75%, versus a -15.05% 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. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|VTV||Get Rating||Get Rating||Get Rating|
|HYG||Get Rating||Get Rating||Get Rating|