In this article, we discuss 5 best ETFs to buy in 2022 according to Reddit. If you want to see more ETFs that Redditors are monitoring, click 10 Best ETFs to Buy in 2022 According to Reddit.
5. Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS)
Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS) aims to track the performance of the FTSE Global All Cap ex US Index, which replicates the investment return of companies located outside the United States. Via a passively managed, index replication approach, the fund offers international exposure to emerging and developed markets. Majority of the companies held by Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS) belong to emerging markets, Europe, and Pacific. The fund invests in 7,881 stocks and as of April 30, the total net assets are $363.5 billion.
The largest holding in Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS)’s portfolio is Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), a provider of integrated circuits, chips, and related semiconductor devices.
On April 4, Morgan Stanley analyst Charlie Chan categorized Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as a “catalyst driven idea” as he expects its Q2 guidance to exceed present Street consensus despite inventory correction concerns in the sector. He reiterated an Overweight rating and a NT$780 price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) heading into the company’s Q1 results on April 14, which came in above market estimates.
According to Insider Monkey’s Q1 data, 81 hedge funds were bullish on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 72 funds in the earlier quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held a prominent position in the company, comprising over 9 million shares worth $945 million.
Here is what Wedgewood Partners has to say about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2022 investor letter:
“Taiwan Semiconductor pulled back on geopolitical concerns and periodic market fears about the end of the “cycle” in semiconductors. First, we think the Company might be one of the most – if not the most – important Companies in the world. Taiwan Semiconductor has a near-monopoly on semiconductor processing at advanced nodes, which makes it irreplaceable to customers such as Apple, AMD, NVIDIA, Mediatek, Amazon, and even Intel. Second, much less important manufacturers have more direct geopolitical risk than Taiwan Semiconductor, yet they trade at substantial premiums – both multiple and market cap. For example, Tesla is a heavy manufacturer of only about 1 million automobiles with significant production capacity located in the heart of China, yet it trades at double the market cap of Taiwan Semiconductor. Third, while it is hard to know when the current semiconductor “cycle” will slow or end, we see very few signs of it, as Taiwan Semiconductor continues to generate bookings well in excess of its current capacity – unlike any previous cycle. Taiwan Semiconductor traded to levels that are much too pessimistic given its competitive positioning and opportunity for growth driven by a more robust semiconductor cycle, driven by high-performance computing. As such, we added to our position during the quarter.”
4. Schwab U.S. Dividend Equity ETF (NYSE:SCHD)
Schwab U.S. Dividend Equity ETF (NYSE:SCHD) closely tracks the total return of the Dow Jones U.S. Dividend 100 Index. Due to its low expense ratio of only 0.06%, the fund offers tax efficiency. At the end of May 2022, Schwab U.S. Dividend Equity ETF (NYSE:SCHD)’s total net assets came in at $36.6 billion. As of April 30, the ETF offers a distribution yield of 3%.
One of the top holdings of Schwab U.S. Dividend Equity ETF (NYSE:SCHD) is Pfizer Inc. (NYSE:PFE), an American multinational pharmaceutical and biotechnology corporation. On May 23, SVB Leerink analyst David Risinger initiated coverage of Pfizer Inc. (NYSE:PFE) with a Market Perform rating and a $55 price target. The analyst is bullish on the company’s plans to increase innovation, but struggles to forecast the magnitude and durability of pandemic-related profits beyond 2022.
Pfizer Inc. (NYSE:PFE) reported on April 28 a $0.40 per share quarterly, in line with previous. The dividend is payable on June 10, to shareholders of record on May 13. Pfizer Inc. (NYSE:PFE)’s dividend yield on June 1 came in at 3.06%.
According to Insider Monkey’s database for the first quarter of 2022, 79 hedge funds were long Pfizer Inc. (NYSE:PFE), compared to 83 funds in the earlier quarter. Cliff Asness’ AQR Capital Management is a significant shareholder of the company, with 10.70 million shares worth $554.12 million.
Here is what ClearBridge Investments Value Equity Strategy has to say about Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.”
3. iShares Core S&P 500 ETF (NYSE:IVV)
iShares Core S&P 500 ETF (NYSE:IVV) seeks to track the investment results of an index comprising the largest U.S. equities. As of March 31, the 1-year returns for iShares Core S&P 500 ETF (NYSE:IVV) were 15.61%, whereas the benchmark returned 15.65%. The fund was established May 15, 2000 and has total net assets exceeding $299 billion as of June 1. The expense ratio clocks in at 0.03%.
One of the largest holdings of iShares Core S&P 500 ETF (NYSE:IVV) is Tesla, Inc. (NASDAQ:TSLA), the American EV manufacturer. On April 20, Tesla, Inc. (NASDAQ:TSLA) reported earnings for Q1 2022, announcing an EPS of $3.22 and a revenue of $18.76 billion, above Street consensus by $0.95 and $917.76 million, respectively.
According to Insider Monkey’s Q1 database, 80 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA), compared to 91 funds in the preceding quarter. Cathie Wood’s ARK Investment Management is a leading stakeholder of the company, with a position worth $1.7 billion.
Here is what Baron Fifth Avenue Growth Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2022 investor letter:
“During the first quarter, we bought back shares in Tesla, Inc., which designs, manufactures, and sells electric vehicles, solar products, energy storage solutions, and batteries. We believe that despite the run in the stock over the last few years, Tesla presents a favorable risk/reward profile and remains a Big Idea with only about 1% market share of the automotive market. Since we bought the stock during the first quarter, shares increased 27.1%, despite a complex supply-chain environment, on continued revenue growth and record profitability. Robust demand and operational optimization allow the company to offset inflationary pressures while vertical integration provides flexibility around supply bottlenecks. Moreover, we expect new localized manufacturing capacity to drive additional efficiencies while software initiatives, including the autonomous driving program, are accelerating, offering valuable optionality to the stock.”
2. Invesco DB Oil Fund (NYSE:DBO)
Invesco DB Oil Fund (NYSE:DBO) seeks to track the changes in the level of the DBIQ Optimum Yield Crude Oil Index Excess Return, as well as the interest income from its portfolio of mainly US Treasury securities and money market income, apart from expenses. It operates as a rules-based index comprising futures contracts on light sweet crude oil. Invesco DB Oil Fund (NYSE:DBO) is suitable for investors with a huge risk appetite, due to its speculative nature and underlying futures contracts in extremely volatile markets.
Invesco DB Oil Fund (NYSE:DBO) was established in 2007, and it offers short selling and options trading on WTI crude futures. The total expense ratio is 0.77%, consisting of a 0.75% management fee and a futures brokerage fee of 0.02%.
1. Invesco DB Agriculture Fund (NYSE:DBA)
Redditors were bullish on Invesco DB Agriculture Fund (NYSE:DBA), which aims to track the positive and negative changes in the level of the DBIQ Diversified Agriculture Index Excess Return, as well as the income from the fund’s holdings comprising US Treasury securities, money market funds, and T-Bill ETFs.
Invesco DB Agriculture Fund (NYSE:DBA) invests in futures of corn, soybeans, sugar, coffee, live cattle, cocoa, lean hogs, wheat, feeder cattle, and cotton. The ETF offers a total expense ratio of 0.93%, comprising a management fee of 0.85% and estimated futures brokerage expenses of 0.09%.
You can also take a look at 20 Safe Dividend Stocks to Quit Your 9 to 5 Job and 10 Growth ETFs to Buy Now.
