We will reach the one-month anniversary of Russia’s full-scale invasion of Ukraine on Thursday, March 24. The conflict between Russia and Ukraine has raged in the eastern part of the latter country since the 2014 Ukrainian revolution that deposed Viktor Yanukovych. Fighting has intensified in recent weeks, as Russian forces have encircled and increased shelling of major eastern cities like Mariupol. Despite the heightened ferocity of the conflict, there are signs that both sides are coming closer to a peace agreement. Until that agreement comes, investors will need to navigate a volatile market.
Today, I want to look at three exchange-traded funds (ETF) that are worth targeting right now. Let’s dive in.
Here’s a defensive ETF to snag as market volatility persists
In the days before Russia launched the invasion, I’d looked at some of the top dividend stocks investors could target in the event of a market correction. Investors hungry for exposure to defensive stocks should consider iShares S&P/TSX Capped Consumer Staples ETF (TSX: XST). Shares of this ETF have climbed 3% in 2022 as of mid-morning trading on March 21.
This fund tracks the performance of the S&P/TSX Capped Consumer Staples Index. It offers targeted exposure to top Canadian consumer staples, offering broad sector coverage. Investors will have to fork over a MER of 0.61%. The ETF’s risk level is medium according to the fund facts.
Some of the top holdings in this fund include consumer staples giants like Alimentation Couche-Tard, the grocery retail giant Loblaw Companies, and Saputo.
Rising oil prices should drive you to this ETF
Oil prices have yo-yoed since Russia launched its invasion in late February. The global supply of oil and gas threatened to be significantly disrupted, as NATO and European Union allies slapped historic sanctions on the Russian state in response to its act of aggression. Brent crude broke the US$130/barrel mark at one point in March. It was trading above US$110/barrel at the time of this writing.
Investors hungry for exposure to the burgeoning oil and gas sector should look to BMO Equal Weight Oil and Gas ETF (TSX: ZEO). This fund seeks to replicate the performance of the Solactive Equal Weight Canada Oil & Gas Index. Its shares have climbed 23% in the year-to-date period.
This fund also demands a MER of 0.61%. Its risk is considered high due to its exposure to a volatile sector. Some of the top holdings include Cenovus Energy, Canadian Natural Resources, and Suncor Energy.
The Russia-Ukraine conflict has also had an impact on base metals prices
The ongoing conflict has also had a major impact on base metals prices. Copper and nickel prices have soared to record highs over the past month. However, there have been major fluctuations that have confounded traders, especially in the nickel market. Investors eager for exposure to the base metals space may want to seek out iShares S&P/TSX Global Base Metals ETF (TSX: XBM). This fund offers targeted exposure to global securities involved in the extraction of base metals. Shares of this ETF are up 22% so far in 2022.
This third ETF also demands a MER of 0.61%. Meanwhile, its risk rating is considered high due to the historical price fluctuations in this market. The top holdings in this fund include materials giants like First Quantum Minerals, Teck Resources, and Lundin Mining.
