Stay invested in growth with this Blue Chip ETF
ggrowth-oriented equities may be out of favor as financial markets continue to digest searing inflation data. The narrative now turns to recession fears as inverted yield curves and slowing corporate earnings add to the wall of worry.
Citigroup analysts see a potential mild recession in 2023, dragging the S&P 500 down 20%.
Right now, all eyes are on the Federal Reserve and how its actions will bring inflation under control. Currently, capital markets are not reacting positively as monetary policy tightening continues into 2022, which could lead to more difficulties in 2023, according to Citigroup.
“Risks of recession are more contained in 2022 but increase significantly through mid to late 2023,” Citi analysts said, adding they expect the fallout to be felt primarily in the first half. next year’s semester, depending on MarketWatch.
“Investors are seeing the growing odds of a macro growth scare over the next 12 to 18 months,” Citi analysts added. “Compared to previous recessions,” they expect the stock market response “to be earlier in and out.”
An eye on growth and stability
It’s one thing to be aggressive with growth and quite another to provide market stability when the major indices are experiencing high volatility as they are now. That said, a traded index fund (ETF) can allow investors to keep one eye on growth and the other on risk mitigation with the T. Rowe Price Blue Chip Growth ETF (TCHP).
TCHP seeks to provide long-term capital growth by investing “at least 80% of its assets in common stocks of blue-chip large and medium-sized companies” and “focuses on companies with leading market positions, seasoned management and solid financial fundamentals.”, according to T. Rowe Price.
As the name explicitly suggests, TCHP contains some top notch household names. Looking at its top 10 holdings, three names that immediately jump out are Microsoft, Apple, and Amazon — superficial tech growth companies that can deliver long-term growth and stay comfortable during high volatility, account given their large cap characteristics.
Unlike index ETFs, the actively managed TCHP portfolio is based on fundamental analysis and stock selection. Investors may be more inclined to stay invested when they have an active adaptive strategy to help them navigate these challenging markets.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.