April was certainly a solid month for stocks, but will this month pay homage to the “Sell in May and Go Away” strategy or will we see a new trend emerge? Of course, many investors would prefer to play the long game and own high quality companies in a diversified basket of stocks via an ETF holding. While some of the below list will present some value, and some will look overseas for an advantage, all of them have been rated as our Top Buy ETFs for the month of May. These picks should help you diversify and mitigate risk inside your portfolio, and hopefully provide some upside throughout the month. Q.ai’s deep learning algorithms have identified several ETFs to do some due diligence on for May, based on their fund flows over the last 90-days, 30-days, and 7-days.
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Invesco DWA Consumer Staples Momentum ETF (PSL)
The Invesco DWA Consumer Staples Momentum ETF PSL is the first Top Buy ETF for the month. The ETF seeks to track the investment results of the Dorsey Wright® Consumer Staples Technical Leaders Index, which has at least 30 securities that have strong relative strength characteristics. The ETF has an AUM of $111,329,891.37. It has seen outflows in the last few periods, with a 90-day fund flow of -$4,335,098.80, and a 30-day fund flow of -$939,654.90. The Invesco ETF comes with an above average net expense ratio of 0.60%.
Invesco S&P 500 Momentum ETF (SPMO)
Another Invesco ETF makes our Top Buy ETFs for the month with the Invesco S&P 500 Momentum ETF SPMO. This ETF aims to give exposure to the S&P 500 Momentum Index, designed to track approximately 100 stocks in the passive S&P 500 index that have the highest “momentum score.” The ETF has only $71,503,607.18 AUM. It has seen positive fund flows with investors trying to catch an upswing in momentum stocks, with a 90-day fund flow of $7,931,734.90 and a 30-day fund flow of $8,835,886.70. The ETF has a relatively cheap net expense ratio of 0.13%.
Vanguard Total Bond Market ETF (BND)
Next on our Top Buy Monthly ETFs list is a set of bond etfs, starting with the Vanguard Total Bond Market ETF BND. The ETF aims to track the Bloomberg Barclays U.S. Aggregate Float Adjusted bond index. Bond’s have not had a strong year as of yet, but investor flows are showing the opposite with the Federal Reserve set to keep interest rates low for the foreseeable future. The ETF is massive, with $61,139,045,719.58 in AUM. It has seen positive fund flows as mentioned, with a 90-day fund flow of $5,779,115,000.00, a 30-day fund flow of $2,534,631,000.00, and 1-week fund flow of $664,083,000.00. Its net expense ratio of 0.05% cannot go much lower before being free.
iShares iBoxx $ High Yield Corporate Bond ETF (HYG)
The iShares iBoxx $ High Yield Corporate Bond ETF HYG is our second Top Buy Monthly ETF in the bond sector. This ETF aims to give investors exposure to the investment results of the Markit iBoxx® USD Liquid High Yield Index, so it carries more risk than the total bond market mentioned prior. The ETF has an AUM of $30,516,059,942.00, and has seen mixed fund flows. The ETF has a 90-day fund flow of $226,897,250.00, a 30-day fund flow of -$364,147,870.00, and a 1-week fund flow of -$549,673,580.00. Its net expense ratio of 0.49%, is quite expensive for a bond fund.
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
The next bond Top Buy for the month is the iShares iBoxx $ Investment Grade Corporate Bond ETF LQD. This ETF aims to track the Markit iBoxx® USD Liquid Investment Grade Index. The ETF is also quite large, in terms of AUM, with $56,377,083,989.10. The ETF has also seen mixed fund flows with a 90-day fund flow of -$9,102,396,380.00, 30-day fund flow of $824,994,470.00, and 1-week fund flow of -$1,100,097,520.00. The ETF also has a very attractive 0.15% net expense ratio.
SPDR Bloomberg Barclays High Yield Bond ETF (JNK)
The final bond Top Buy ETF for the month is the SPDR Bloomberg Barclays High Yield Bond ETF JNK. This ETF seeks to provide investment results that correspond generally to the price and yield performance of the Bloomberg Barclays High Yield Very Liquid Index. The ETF is on the smaller side for the bond ETFs covered with $13,145,310,209.73 AUM. The ETF has seen negative fund flows, with a 90-day fund flow of -$1,755,912,993.40, 30-day fund flow of -$502,766,102.60, and 1-week fund flow of -$652,570,590.40. The ETF also has a net expense ratio of 0.4% which is on the pricier side.
Emerging Market ETFs
iShares MSCI South Korea ETF (EWY)
The next 2 ETFs on our Top Buys for the month are in emerging markets, starting with the iShares MSCI South Korea ETF EWY. With the US Dollar weakening, emerging markets may be an intriguing play over the next year. With $4,921,743,576.45 in AUM, this ETF has some room to grow to the upside. Its fund flows have been negative, however, with a 90-day fund flow of -$899,768,895.00, 30-day fund flow of -$934,987,885.00, and 1-week fund flow of -$399,803,350.00. With a net expense ratio of 0.62%, it is not the cheapest ETF to own, but provides emerging market exposure so would be much cheaper than a similar mutual fund.
WisdomTree Japan SmallCap Dividend Fund (DFJ)
The next Top Buy ETF for the month is the WisdomTree Japan SmallCap Dividend Fund DFJ. The fund aims to own dividend-paying small cap companies in Japan. In terms of AUM, the ETF is on the smaller side with $239,941,952.06 AUM. The ETF has seen some positive inflows, with a fund flow of $19,331,464.55 over the last 90-days, and a fund flow of $15,372,810.65 over the last 30-days. Its net expense ratio of 0.58% is more expensive than a passive alternative, but seems fair given the exposure.
iShares S&P Mid-Cap 400 Value ETF (IJJ)
Our final ETF highlighted for the Top Buy Monthly ETFs is a value play in the iShares S&P Mid-Cap 400 Value ETF IJJ. The fund aims to track the investment results of the S&P MidCap 400 Value IndexTM, which measures the performance of the mid-capitalization value sector of the U.S. equity market. The ETF has an AUM of $4,571,650,062.00. It has seen strong inflows lately, with a 90-day fund flow of $1,289,893,755.00, a 30-day fund flow of $211,603,480.00, and 1-week fund flow of $43,028,030.00. This ETF carries a reasonable net expense ratio of 0.25%.
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