Opinions
Stan Wong
Vanguard Financials ETF
VHF-N
PAST TOP PICK
Dec 07, 2017
N/A
Stock price when the opinion was issued
E.T.F.'s
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TOP PICK
Sold this into the market with this Trump bump rally, but intends to buy it back when things calm down. This owns a basket of US financial names, including J.P. Morgan, Berkshire Hathaway, Bank of America, Citigroup, etc. With improving economic fundamentals in the US and globally, and rising interest rates, US financials should continue to do quite well. If we see some sort of repeal or amendment of the Dodd-Frank act, that should help the financials. There will be a decline in regulatory scrutiny. Trading at about 14X earnings. Dividend yield of about 2%.
E.T.F.'s
BUY
VFH vs. XLF vs. ZWK Likes US banks. ZWK is an equal weighted basket of large and regional banks. Will benefit when you see the economy recover, 6-12 months out, with lower loan losses, steepening yield curve. Yield about 6.9%, a combination of dividends and covered call options. Makes sense if you're in it for the income. XLF and VFH don't have the covered call, do have a lower expense ratio, and let you capture the upside from the underlying securities.
E.T.F.'s
(A Top Pick Nov 18/16. Up 26%.) Financials are his largest holdings at about 36%. This one had a new all-time high this week. Banks in general are better capitalized than they were before. Capital ratios are improving. Most have done a pretty good job of cutting expenses.