2 ETFs for 2018 - Passive Investing | Summary and Q&A

TL;DR

Two ETFs, XRt and XLF, are recommended for the second half of 2018 due to a strong US economy, rising interest rates, and positive performance in the retail and financial sectors.

Key Insights

• 😘 The US economy is currently strong, with positive GDP growth and low unemployment.
• ♻️ Cyclical stocks are favorable in this economic environment.
• 😮 Rising interest rates present opportunities for financial companies to generate higher earnings.
• 💐 The XRt ETF provides broad exposure to the retail industry, with positive returns and revenue trends.
• 😮 The XLF ETF offers exposure to financial companies, such as Berkshire Hathaway, JPMorgan Chase, and Bank of America, which are expected to perform well in a rising interest rate economy.
• 😀 Amazon's significant presence in the consumer discretionary ETF (XLY) could impact its performance if the company faces challenges or stalls.
• 💓 Financial firms in the Russell 2000 have generally beaten earnings expectations in Q1, indicating potential strength for the XLF ETF.

Transcript

in this video I'm going to go through two ETFs I believe can have a strong second half to 2018 I'm gonna walk you through my reasoning and then you can do your own research and see what you come up with and see if it's something that works for you that you can add to your portfolio I plan on doing a lot more videos just like this one going forward ... Read More

Questions & Answers

Q: Why do cyclical stocks tend to perform well in a strong economy?

Cyclical stocks are typically tied to economic cycles and tend to benefit from increased consumer spending and improved business conditions.

Q: How do rising interest rates affect financial companies?

Higher interest rates allow financial companies to earn more money through increased lending and can lead to better earnings, revenue, and stock prices.

Q: What are the main holdings of the XRt ETF?

The XRt ETF has 89 holdings, with no single holding representing more than 2% of the fund. Top contributors to its performance include Netflix, Shutterfly, and TripAdvisor.

Q: Why is XLF considered a value play?

XLF is seen as a value play because it has a lower fee compared to the retail ETF and is expected to benefit from the results of stress tests and rising interest rates.

Summary & Key Takeaways

• The US economy is performing well, with GDP growth and low unemployment, supporting cyclical stocks.

• Rising interest rates favor financial companies, which are expected to perform well.

• The XRt ETF provides exposure to the retail industry, with positive returns and strong revenue trends.

• The XLF ETF offers a market cap-weighted exposure to financial companies, including Berkshire Hathaway, JPMorgan Chase, and Bank of America.