4 Safe Haven ETFs To Escape Geopolitical Tensions
Though the broad U.S. stock market is riding high this year, the latest series of events seem to be stalling the ascent. The major culprit is heightening geopolitical tension following the U.S. air strike on Syria last week that has created chaos across the world.
In particular, it dealt a major blow to relations between Moscow and Washington and fueled tensions in North Korea. The situation seems to be worsening with the U.S. considering further military action on Syria and warnings from North Korea of a nuclear war if American Navy ships keep heading toward the Korean Peninsula. Additionally, Trump tweeted yesterday: "North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! U.S.A."
It shook the complacency in the stock market, compelling investors to dump the riskier assets and take flight to safety at least for the near term. Added to the geopolitics is the French presidential election, wherein both the right-wing candidate Marine Le Pen and left-wing candidate Jean Luc Melenchon want to put the country’s European Union membership to a vote.
Apart from these tensions, the possibility of a government shutdown on April 29 if Congress does not pass the proposed spending bill and lofty valuations are weighing on the market.
Against such a backdrop, we have highlighted four safe haven ETFs that investors should consider in their portfolio, especially if geopolitical tensions continues to escalate. These products will likely benefit from the crisis and would be in focus in the weeks ahead.
SPDR Gold Trust ETF (GLD - Free Report)
Gold is often viewed as a store of value and a hedge against market turmoil. The product tracking this bullion like GLD could be an interesting pick to play in the current market turbulence. The fund tracks the price of gold bullion measured in U.S. dollars, and kept in London under the custody of HSBC Bank USA. It is the ultra-popular gold ETF with AUM of $33.8 billion and heavy volume of nearly 8.1 million shares a day. It charges 40 bps in fees per year from investors. The ETF gained about 1.3% over the past five days and has a Zacks ETF Rank of 3 or ‘Hold’ rating with Medium risk outlook.