The S&P/TSX Composite Index was down 181 points in late-morning trading on February 24. Global markets were hammered on the same day that saw Russia launch a broader invasion of Ukraine that included intense aerial bombardment of Ukraine’s forward air bases. At the time of this writing, Russia has also reportedly made territorial gains on the mainland north of Crimea. Today, I want to look at three exchange-traded funds (ETFs) that are worth snagging in this uncertain environment. Let’s dive in.
This ETF offers protection against broader volatility
North American markets have been battered by volatility since the beginning of 2022. This has gone beyond the geopolitical threat. Investors and analysts alike are standing on shaky ground as the Bank of Canada (BoC) and the United States Federal Reserve eye potential rate hikes to combat inflation. Markets have gorged on loose monetary policy over the past decade. A rapid rate-tightening cycle could lead to a sharp correction.
Investors looking to duck volatility should look to TD Low Volatility ETF (TSX:TCLV). This exchange-traded fund seeks to achieve long-term capital growth by investing in equity securities of issuers in Canada while also avoiding volatility. Shares of this ETF have dropped 1% so far this year. However, the ETF is still up 18% in the year-over-year period.
Some of the top holdings in this fund include reliable telecoms like Rogers Communications and Telus. It also offers exposure to dependable utilities stocks like Fortis and Emera. This ETF last paid out a quarterly distribution of $0.13 per share, which represents a 2.6% yield.
Here’s an ETF to target as oil prices soar
Oil prices have built huge momentum over the past year. That has kicked into overdrive in the face of the Russia-Ukraine crisis in 2022. Indeed, the price of WTI crude rose above US$100 per barrel during trading after news of the invasion hit. Investors may want to target the Horizons Crude Oil ETF (TSX:HUC) in this environment.
This ETF seeks to correspond to the performance of the Solactive Light Sweet Crude Oil Winter MD Rolling Futures Index. The fund is denominated in Canadian dollars. Shares of this oil-focused ETF have climbed 16% in the year-to-date period. The ETF has surged 54% from the same period in 2021.
Seek exposure to gold with this fund
Gold prices have also been reinvigorated in 2022. The spot price of the yellow metal rose above US$1,970 per ounce in trading this morning. It has since retreated below the US$1,950 mark. Still, investors should keep their eyes on gold equities right now. Crypto has fallen out of favour since late 2021, thrusting gold back into the spotlight as a hedge against broader equity markets. Canadians who are hungry for exposure to gold may want to seek out iShares Gold Bullion ETF (TSX:CGL). Shares of this ETF have increased 5.7% in 2022 as of early afternoon trading on February 24. It has achieved most of its year-over-year gains over the past month. This ETF seeks to replicate the performance of the price of gold bullion.