2023-06-23 13:34:23 ET
Despite an upbeat market through much of the first half of 2023, JPMorgan remains cautious about the near-term outlook for the economy. “We still believe a recession is more likely than not," the firm stated Friday in a note to clients.
"Our macro ‘base case’ on a 12-month horizon is little changed from the year ahead outlook, although elevated valuations now make it more difficult for us to argue that markets are appropriately priced for the slowdown we still see ahead," JPMorgan added in its mid-year investment outlook.
Given this more conservative assessment, the financial institution suggested that investors bolster their portfolios with high-quality names, strong dividend payers and regional diversification.
While JPMorgan did not outline direct names, some investors may look toward diversified dividend exchange traded funds that would fit the bill of “high-quality names” and “dividend payers.” Some funds worth analyzing may be as follows:
- Vanguard Dividend Appreciation ETF ( NYSEARCA: VIG )
- Vanguard High Dividend Yield Index ETF ( NYSEARCA: VYM )
- Schwab US Dividend Equity ETF ( NYSEARCA: SCHD )
- iShares Core Dividend Growth ETF ( NYSEARCA: DGRO )
- SPDR S&P Dividend ETF ( SDY )
- iShares Select Dividend ETF ( DVY )
"We also think that adding exposure to alternative asset classes, such as infrastructure, could provide a more defensive stance to portfolios, while delivering some inflation protection and attractive income," JPMorgan argued.
For investors that share a similar mindset on infrastructure, here are some ETFs that offer exposure to this area:
- Industrial Select Sector SPDR Fund ETF ( XLI )
- Global X US Infrastructure Development ETF ( PAVE )
- iShares Global Infrastructure ETF ( IGF )
- iShares U.S. Infrastructure ETF ( IFRA )
- SPDR S&P Global Infrastructure ETF ( GII )
More From Financial Institutions:
- BlackRock suggests market-neutral strategies amid market uncertainty
- BofA: Technical signals project 4500 range for S&P 500
- Goldman Sachs lifts S&P 500 outlook, citing AI optimism and inflation reset
- Barclays spotlights 'immense' potential for AI, points to NVDA, MSFT as 'key names'
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JPMorgan says 'a recession is more likely than not'