In the first half of 2023, things were looking up for investors as the S&P 500 tacked on nearly 20% through the end of July. Things started to get iffy soon after that, however, as the benchmark index has slid roughly 10% since those summer highs.
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Now, investors who once simply claimed Wall Street was “climbing a wall of worry” are starting to wonder if there’s a good reason to be seriously worried about their portfolios after all.
A few bad headlines don’t necessarily spell the end of the stock market’s recent run, and it’s universally true that long-term investing pays off more than churning in and out of positions. But if you’re looking to make a move in November, here are some tactical exchange-traded funds, or ETFs, to buy now that seem to have something to offer amid recent uncertainty:
| ETF | Expense ratio | Year-to-date performance |
| ProShares Short S&P 500 (ticker: SH) | 0.89% | -6.9% |
| Simplify Interest Rate Hedge ETF (PFIX) | 0.50% | 40.4% |
| SPDR S&P Oil & Gas Exploration & Production ETF (XOP) | 0.35% | 11.6% |
| Global X Uranium ETF (URA) | 0.69% | 36.5% |
| SPDR Gold Shares (GLD) | 0.40% | 8.5% |
| Vanguard Information Technology ETF (VGT) | 0.10% | 32.8% |
| iShares MSCI USA Min Vol Factor ETF (USMV) | 0.15% | 2.9% |
ProShares Short S&P 500 (SH)
October marked the third consecutive month of losses for the stock market, causing many to wonder whether this year that started out so strongly will actually end flat or even in the red come New Year’s Day. Whether you’re looking for a hedge against declines or whether you simply want to profit from the hardship on Wall Street, SH is the go-to way to play the potential downside in stocks. It’s designed to deliver the inverse of the daily performance of the S&P 500 — meaning it’s actually up about 8% in the last 90 days while the S&P has moved about the same amount in the opposite direction.
Simplify Interest Rate Hedge ETF (PFIX)
This tactical ETF from boutique asset manager Simplify has only about $200 million in assets, but it’s worth a look despite its modest size. PFIX seeks to hedge against rising long-term interest rate shifts. Investors are trying to decide now whether U.S. central bank rates will plateau, whether the Fed will keep tightening or even whether challenges may arise that prompt rate cuts in the next year or two. In such an environment, the interest rate options held in PFIX are a way to smooth out some of that uncertainty in your portfolio and profit from the changes. PFIX has surged a little over 40% in the last 90 days or so as a result of this volatility.
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SPDR S&P Oil & Gas Exploration & Production ETF (XOP)
With persistently high oil prices and geopolitical unrest causing widespread disruptions in the Middle East, energy markets have been volatile lately in anticipation of supply snarls. While the production-focused XOP ETF is slightly in the red year to date in 2023, it’s up almost 30% from its spring lows and represents the best way to play potentially higher margins in oil and gas if prices remain elevated for the next several months. At nearly $4 billion in assets, it’s also one of the most established ways to generally play the energy sector via ETFs.
Global X Uranium ETF (URA)
Another fund that is a play on energy is this uranium ETF from Global X, which offers both direct exposure to physical uranium as well as stakes in producers including Cameco Corp. (CCJ) and NexGen Energy Ltd. (NXE). Uranium prices have hit their highest levels in a decade thanks to disruptions in global supply and increased demand as an alternative to fossil fuels — particularly in China. URA is up more than 35% year to date, but most of those gains have been recent, after a surge of 20% in the last three months alone. That hints that the time is right to ride the momentum in uranium via this ETF.
SPDR Gold Shares (GLD)
A commodity asset of a different flavor, the $55 billion GLD ETF is tied to physical gold — which has seen a big lift in recent weeks and is closing in on the S&P 500 with a roughly 9% return year to date. Gold is an uncorrelated asset, which makes many consider it a safe haven to own if and when stocks stumble. If you’ve seen the uncertainty out there and want to branch out, consider this SPDR gold fund that invests in gold bullion rather than gold miners — or any other publicly traded stocks, for that matter.
Vanguard Information Technology ETF (VGT)
Many see tech as a risky short-term bet after recent declines in big names like Tesla Inc. (TSLA) and Alphabet Inc. (GOOG, GOOGL). However, aggressive investors may want to take a long-term perspective and bank on the multi-year growth story of these stocks, even as near-term volatility puts shares under pressure. In the past, it wasn’t possible to buy low and sell high in Big Tech because most of these companies seemed to defy gravity. If you have a high risk tolerance and you don’t mind trying to “catch a falling knife,” this $48 billion Vanguard ETF is the largest and most liquid way to play the tech sector.
iShares MSCI USA Min Vol Factor ETF (USMV)
If the prior funds seem too tactical, USMV is a $27 billion ETF that offers a way to layer on a low-risk approach to the core holdings in your portfolio. Its holdings generally have lower volatility characteristics relative to the broader movement of U.S. stocks. By way of example, its top holdings right now are health care giant Eli Lilly & Co. (LLY) and sleepy tech company International Business Machines Corp. (IBM). To be 100% clear, this “minimum volatility” fund isn’t a sure thing. All investors should know that there’s no investment anywhere that’s guaranteed to always move higher, and USMV is no exception. It is, however, designed to protect you from big moves to the downside while still keeping you invested in leading domestic stocks.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 11/03/23: This story was previously published at an earlier date and has been updated with new information.
