With the upcoming U.S. elections weighing on the minds of investors, many are opting to reassess their asset allocations this month.
Recent data from eToro found that nearly 50% of American retail investors intend to or have already moved their portfolios due to their expectations for the presidential election. The eToro data notes that 42% of these investments have gone to cash assets, while 35% went to more stocks and 20% moved to crypto assets.
While most age groups have preferred to bolster cash allocations, Gen Z has opted for a different strategy. According to eToro. 49% of Gen Z has either bought more U.S. stocks or has planned to.
“There’s nothing wrong with investors adjusting their asset allocation ahead of a big event — like the election. While younger investors are being a bit more opportunistic, older investors are opting to be more passive, letting their investment plans stay the course,” noted eToro Analyst Bret Kenwell. “Perhaps that’s as their experience has shown equities have generally performed pretty well over the long term, regardless of which political party is in office.”
A Dynamic Equity Strategy
Given the flexibility of the ETF wrapper, there are many strategies investors can use to get ahead of any of the November market movements. For investors who are seeking to capitalize on U.S. stocks, the BlackRock U.S. Equity Factor Rotation ETF (DYNF ) might be able to help.
DYNF offers a portfolio of mid and large cap U.S. equities, opportunistically selected based on quality, value, size, volatility, and momentum. With a forward-looking investment strategy, DYNF could help investors looking to outperform the market, even in periods of uncertainty. As of September 30th, 2024, the fund’s total return has risen over 42% in the last year.
Advantages of Short-Term Bonds
Meanwhile, investors looking for a robust cash alternative could give the JPMorgan Ultra-Short ETF (JPST ) a shot. With a low net expense ratio of 0.18%, the fund focuses investment in short-term investment grade bonds.
JPST’s portfolio duration is intended to be less than one year long. As such, the fund can help investors cultivate income through short bouts of election volatility, while mitigating some of the long-term risks associated with shifting interest rates. JPST’s 30-day SEC yield sits at about 4.9%, as of September 20th, 2024.
For more information, please visit VettaFi.com | ETF Trends.
