ETFs (exchange-traded funds) are a cost-effective way to diversify a portfolio due to their low expense ratios compared to traditional mutual funds. Further, the ETFs trade on stock exchanges, providing liquidity and flexibility for investors. Today, we have shortlisted two ETFs – FlexShares U.S. Quality Low Volatility Index Fund (QLV) and SPDR S&P Midcap 400 ETF Trust (MDY) – with more than 10% upside potential projected by analysts over the next twelve months.
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Let’s take a deeper look at these two ETFs.
FlexShares U.S. Quality Low Volatility Index Fund
The QLV ETF invests in U.S. stocks with strong financials and lower volatility. The fund aims to provide investors with a relatively stable and less risky exposure to the U.S. stock market. By focusing on such low-volatility stocks, QLV seeks to balance potential returns with reduced risk. Investors should note that this ETF tracks the Northern Trust Quality Low Volatility Index.
QLV has $130.95 million in assets under management (AUM), with the top 10 holdings contributing 34.66% of the portfolio. Importantly, it has a low expense ratio of 0.17%. The QLV ETF has returned 10% in the past six months.
Overall, the QLV ETF has a Moderate Buy consensus rating. Of the 119 stocks held, 90 have Buys, 25 have a Hold rating, and four have a Sell rating. At $74.07, the average QLV ETF price target implies a 13.02% upside potential.
SPDR S&P Midcap 400 ETF Trust
The MDY ETF provides exposure to a diverse range of mid-cap U.S. companies. By tracking the S&P MidCap 400 Index, this ETF offers investors a way to participate in the growth of mid-sized companies, which often have higher growth potential than large-cap companies.
The MDY ETF has $23.01 billion in AUM and an expense ratio of 0.24%. Its top 10 holdings contribute 6.56% of the portfolio. Over the past six months, MDY ETF has generated a return of 5.12%.
On TipRanks, MDY has a Moderate Buy consensus rating based on 289 Buys, 106 Holds, and seven Sells assigned in the last three months. At $641.69, the average MDY ETF price target implies a 13.21% upside potential.
Concluding Thoughts
ETFs are a low-cost, diversified, and transparent way to participate in the market. Investors looking for potential ETF recommendations could consider QLV and MDY due to the upside potential expected by analysts.
