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AllianceBernstein indicated that investors should consider opportunities in places such as quality growth, value, high dividend, and low volatility positions.
The investment institution highlighted that the U.S. consumer has supported growth so far this year, but the firm anticipates that the edge will begin to ease off this year largely in part because physical support has been taken away.
From a macro snapshot AllianceBernstein said: “Core inflation should tail off toward 2.5%, with real GDP growth moderating to a below-trend 0.8%. Rate cuts, which will likely kick off around midyear, will likely end up somewhere between the market’s and Fed’s estimates (Display), with Treasury yields continuing their decline.”
Alliance Bernstein suggests that earnings should taper down if normalization with if slowing growth were to take place but certain areas of the market would provide an opportunity.
“Areas we like include quality growth stocks and value—in many ways the forgotten style. Both offer better valuations and strong balance sheets, two attractive qualities as money looks for new investments to call home.”
“Likewise, high-dividend stocks seem worth pursuing. Low-volatility stocks are also worth a look, given that valuations have trended higher and the upside potential for earnings growth is lower.”
For investors who share a similar mindset with AllianceBernstein they may look towards a handful of exchange traded funds that cover bode well with the institution’s investment thesis.
- Vanguard Value ETF (NYSEARCA:VTV)
- American Century U.S. Quality Growth ETF (QGRO)
- Vanguard High Dividend Yield Index ETF (VYM)
- SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
- Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)
- iShares MSCI USA Min Vol Factor ETF (USMV)
- Invesco S&P 500 Low Volatility ETF (SPLV)
