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The economic outlook looks misted up yet again by undesirable global events. The Chinese economy is striving to ease a hard landing; Japan is also seeing deceleration in its growth pace; European markets are far from steady despite a QE policy; capitals are gushing out of emerging markets and most importantly, recent reports out of the lone star in the developed market pack, the U.S. economy, aren’t quite favorable thanks to a soft labor market. Added to this, heightened speculations about the Fed lift-off have taken a backseat. While muted inflation and global growth worries had held back the Fed from ratifying a rate hike in its September meeting, a slowdown in the labor market over the last three months have almost killed the possibility of a hike at the December Fed meeting, guarantying cheap money inflows throughout this year. As a result, equities jumped and the greenback dived. And the case for large-cap ETF investing had never been stronger than now. Investors should note that a subdued greenback sets the stage of large-cap stocks’ outperformance as this group of companies has considerable exposure in the international market. So, foreign profits are curtailed in a stronger dollar environment when repatriating back home. That being said, we would like to note that levels of uncertainty have flared up in the investing world. This is truer given the fact that the IMF recently slashed its global growth forecast for 2015 and 2016. Back home, the Fed also cut the expectation for 2016 real GDP growth to 2.1─2.8% from 2.3─3.0% though the same for 2015 was upgraded to 1.9─2.5% from 1.7─2.3% projected in June. The Fed also lowered its 2015 projection for personal consumer expenditure inflation to 0.3─1.0% from 0.6─1.0% guided in June. The earnings picture looks equally gloomy as the S&P 500 earnings and revenues are expected to decline 5.7% each in the third quarter. This does not leave the U.S. market without doubts and mean that some investors might want to look at large caps for the vast majority of their exposure, and especially so in the value space. While one can do this with individual securities, there are a number of value-focused large cap ETFs that can be better choices. Below, we highlight four of such large-cap value ETFs which delivered smart returns in the last one-month frame and could be intriguing choices ahead should the market forces remain the same. First Trust Morningstar Dividend Leaders Index ETF (NYSEARCA: FDL ) This fund follows the Morningstar Dividend Leaders Index with AUM of $810 million in its asset base. In total, the fund holds 99 stocks. From a sector look, consumer staples, utilities, telecom, energy and industrials each take a double-digit allocation in the basket (read: 5 Investor-Friendly Dow Dog ETFs for 2015 ). Expense ratio comes in at 0.45%. The fund added over 5.8% in the last one month (as of October 12, 2015) and has a dividend yield of 3.60% annually. The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. iShares Core High Dividend ETF (NYSEARCA: HDV ) This product provides exposure to 74 dividend stocks by tracking the Morningstar Dividend Yield Focus Index. From a sector look, the fund is well spread out with double-digit exposure to Energy, Consumer Staples, Health Care, Telecom and Information Technology. This Zacks Rank #3 fund is among the largest ETF in the large cap space with AUM of about $4.17 billion. It charges 12 bps in fees per year and gained over 5.1% in the last one year. The fund has an annual dividend yield of 3.86%. First Trust Value Line Dividend ETF (NYSEARCA: FVD ) This ETF tracks the Value Line Dividend Index, giving investors exposure to about 209 companies that have a Value Line Safety Ranking of #1 or #2. Value Line selects those companies that have higher-than-average dividend yield as compared with the indicated dividend yield of the Standard & Poor’s 500 Composite Stock Price Index. This results in an equal weight approach for individual securities. Utilities takes the top spot at 22.7% of assets, followed by Financials (18%), Industrials (14.9%) and Consumer Staples (12%) (read: 5 Smart Beta ETFs to Beat the Choppy Market ). The Zacks Rank #3-fund is a bit pricier than many other products in the dividend space, charging investors 70 bps a year in fees. It has accumulated $1.4 million in its asset base. SPDR Dividend ETF (NYSEARCA: SDY ) This ultra-popular fund provides exposure to the 101 U.S. stocks that have been consistently increasing their dividend every year for at least 25 years. It follows the S&P High Yield Dividend Aristocrats Index and has amassed $12.6 billion in AUM. Expense ratio comes in at 0.35%. The product is widely diversified across components as each security accounts for less than 2.82% of total assets. Financials is the top sector taking up one-fourth of the portfolio while consumer staples (15.1%), industrials (13.7%), utilities (11.6%) and materials (11.2%) round off the next four spots. The fund was up nearly 4.6% in the last one-month and has a Zacks ETF Rank of 3. Link to the original post on Zacks.com Scalper1 News
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