Three interesting ETFs to keep on the radar for longs. I’ve picked funds that are diverse in their exposure, have favorable macro aspects and are seeing some momentum come in.
MSCI India Small Cap (SMIN)
It’s no secret that India is experiencing a bull market. While the major large caps lead the rally, we have seen the small caps join in as well. India has been able to bring their inflation largely under control and their macro outlook is far better than most countries in the emerging markets space.
We have an opportunity here with the small caps to go long on this current pull back and there is room to the upside. While I think India does have more room to run, we will nevertheless recommend a stop loss at $62.75.
Pacer US Cash Cows ETF (COWZ)
This has an interesting set of holdings and is based on the premise of Free Cash Flow.
Starting with the Russell 1000 selection universe, COWZ screens companies based on their average projected free cash flows and earnings (if available) for the next two fiscal years. We recommend a stop loss at $50.29.
WisdomTree High Dividend Emerging Markets Fund (DEM)
DEM screens for the highest dividend-yielding stocks within the emerging markets.
Included in its selection universe are dividend-paying companies over the prior annual cycle that meet minimum liquidity and size requirements. DEM selects the top 30% of firms ranked by dividend yield from the WisdomTree Emerging Markets Dividend Index.
We recommend a stop loss at $38.65.
Disclaimer: I am long SMIN and may look to take a position in the other two funds three days after the publication of this article.