With Market Risks Accelerating, 2 Blue-Chip ETFs For Added Safety And Stability

 | Jun 13, 2022 03:28

Wall Street finished last week awash in red as US CPI increased more quickly than expected in May, accelerating the debate as to how much the Federal Reserve will raise interest rates in an effort to tame inflation.

The Consumer Price Index, printed hotter than forecast, rising by 8.6% year-over-year. That's the highest for that metric since December 1981.

In addition to red-hot inflation, investors are becoming increasingly worried about the state of the global economy. Both the Fed have recently lowered their economic expectations.

A recent survey by Allianz notes that 43% of Americans are relatively nervous about investing on Wall Street right now, while nearly 60% are seeking portfolio protection. In times of such extreme volatility, blue-chip stocks—or shares of established large-cap companies with solid long-term financial performance—garner significant attention.

Blue-chip companies typically deliver solid returns over time and many regularly increase their dividend payouts. Most are also leaders in their respective industries, show consistent cash flow growth, and have wide moats.

Retail investors usually sell their blue-chip stocks last. Thus, they are also regarded as the bedrock of most portfolios.

With that said, here are two blue-chip exchange-traded funds (ETFs) that may appeal to readers looking to benefit from upside moves in leading names in the second half of the year.

1. SPDR® Dow Jones Industrial Average ETF Trust

  • Current Price: $314.37
  • 52-week range: $306.28 - $369.50
  • Dividend yield: 1.89%
  • Expense ratio: 0.16% per year

The first fund on today’s list is the SPDR® Dow Jones Industrial Average ETF Trust (NYSE:DIA), which invests in 30 Wall Street “blue-chips.” The fund was first listed in January 1998 and has $28.05 billion in net assets. Put another way, it is one of the oldest and most important ETFs on Wall Street.