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Be Secure With 5 ETFs This Week That Packs a Global Punch

Sanghamitra Saha

This week is going to be busy with several high-profile global events lined up. The Fed is meeting on Mar 19-20 for a monetary policy decision in the United States. Key rates are expected to remain stable. Per CME FedWatch Tool, as many as 98.7% of the respondents believes that the rates are going to be intact at 2.25-2.5%. But the meeting is crucial as the bank will update its projections for interest rates. Notably, the Fed has been taking a dovish stance right from the start of the year.

The Brexit tale will likely come to the forefront in mid-week as the EU leaders are scheduled to begin a two-day meeting in Brussels on Mar 21 amid a likely third vote on the UK prime minister Theresa May’s deal in the House of Commons (read: Crucial St. Patrick's Day Amid Brexit: Ireland ETF in Focus).

Plus, the Bank of England’s meeting on interest-rate policy is slated for Thursday. Like the Fed, expectations for any changes in policy are less likely. Still, market watchers will inspect the minutes of the Monetary Policy Committee’s decision to get an idea about how Brexit could impact the British economy, according to an article published in Financial Times.

Per Financial Times, among other central bank meetings this week, the Norges Bank could go for a policy tightening as the bank indicated in its January meet “that it would ‘most likely’ raise its policy rate this time around.”

However, one of the key developments will emerge from an Asian country, namely Thailand. The country is preparing for its first election since 2014's military coup on Mar 24 but with a framework premeditated to weaken political parties and confirm the military's continuing role. Politicians and parties devoted to the ruling military junta will face off against parties intending to obstruct the military rule from claiming power. It now needs to be seen if democracy can return to the country. The country has witnessed a lot of political turbulence in the past and three coups since 1991.

Against this backdrop, it is better to stay safe with the following ETFs at the current level.

Nasdaq Technology Dividend Index Fund TDIV

Tech stocks are deemed to be high-risk in nature but the space is likely to survive the odds. As a matter of fact, elevated demand for the emerging technologies, concerted efforts for automation and rising spending on enterprise software especially cloud (per Gartner) already made the space a certain winner. And what could be better than a dividend angle associated with the technology spectrum. It yields 2.56% annually (read: ETFs to Surge on Cisco's Solid Results).

iShares International Dividend Growth ETF IGRO

Dividend growth stocks or funds call for a quality exposure. Since there are so many forthcoming vital global events crowding this week, it is better to have a cautious approach toward global investing. The underlying Morningstar Global ex-US Dividend Growth Index is a dividend dollars weighted index and seeks to measure the performance of a select few international equities, based on the history of consistent dividend hikes. It yields 2.66% annually.

S&P International Developed High Dividend Low Volatility Invesco ETF IDHD

One can keep tabs on low volatility ETF. The underlying S&P EPAC Ex-Korea Low Volatility High Dividend Index comprises 100 securities in the S&P EPAC Ex-Korea LargeMidCap Index, which have historically provided high dividend yields with lower volatility over the past 12 months. It yields 4.48% annually.

iShares Global REIT ETF REET

Even if there is a bullish sentiment pervading the global market this week, rates are likely to stay muted on dovish central banks. And if there is any negative news entering the market, rates are sure to dive, thanks to a safe-haven rally. So, rate-sensitive global real-estate ETFs are likely to benefit in either of the situation. It yields 5.05% annually.

Invesco CurrencyShares Japanese Yen FXY

Investors, who are extremely averse to taking risks may opt for yen ETF. The currency is considered a traditional safe haven. Plus, the Japanese economy delivered expectation-beating GDP growth numbers in Q4 of 2018. A strengthening economy should also shore up its currency. 

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