And real estate (notice the yellow arrow on the right – that is HUGE buying on March 29, 2022):
Markets and Big Money in the Last 6 Months
My research firm, MAPsignals, measures Big Money investor activity. That includes institutions, pension funds, big individual investors, and so on. Our research shows Big Money moves markets. And right now, Big Money flows into stocks have been positive over the last month:
That’s driving up major indices as well as the Big Money Index (BMI), which measures large-scale investor activity. It’s spiked recently, though may be cresting:
So, things are looking up somewhat, but the general direction of markets going forward is no certainty. Opportunistic investors can take advantage of volatile markets, especially when there’s deep selling. Those times have proven to be when stocks and ETFs are on sale.
Given these conditions, we’ve identified some ETFs we think have long-term potential, one of which is priced nicely right now: VDE, SCHG, SCHH, HDV, and IJJ.
Long-term investors should look for ETFs (and their stocks), with great setups. Remember, ETFs are just baskets of stocks, so we need to look at them in detail. MAPsignals specializes in scoring more than 6,500 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all from strongest to weakest.
Let’s get to the five best ETF opportunities for April 2022.
Vanguard Energy ETF (VDE) Analysis
The current geopolitical situation has changed the global energy market in big ways. The ripple effect brought oil and gas back in the spotlight while driving up prices for energy. As you can see, Big Money has been buying VDE in chunks over the past year, with heavy buying starting in October 2021:
VDE holds several powerhouse stocks. One example is ConocoPhillips (COP), which is up 35% this year and has a profit margin of 17.5%. Here are Big Money signals for COP:
Schwab U.S. Large-Cap Growth ETF (SCHG) Analysis
True, the near-term chart on SCHG doesn’t look great. But the broad view shows its huge upward trend, and it holds a basket of stocks with excellent fundamentals, many of which are household names.
One great stock SCHG holds is Tesla Inc. (TSLA). It’s a long-time Big Money favorite with fantastic fundamentals, including a 10.3% profit margin, 3-year EPS growth of 336.2%, and 3-year sales growth of 37.8%. As the multi-year chart below shows, it’s been a growing giant for a while:
Schwab U.S. REIT ETF (SCHH) Analysis
Remember the huge spike in real estate stock buying? Well, that’s reflected in SCHH too. While there have been a couple dips in the past year, the trend on this one overall is undeniably upward:
SCHH is a REIT ETF, but it contains some stocks you wouldn’t expect. A good example is Mastercard Incorporated (MA). It’s fallen recently, but it’s an outlier stock with a profit margin of 46%. It’s also been a Top 20 Big Money buy for years:
iShares Core High Dividend ETF (HDV) Analysis
When markets get uncertain, many investors flock to defensive positions, especially great dividend stocks. As various headwinds like inflation and geopolitical tensions picked up late last year, fundamentally strong stocks with dividends captured investors’ attention. For instance, HDV was chopping along until December 2021, when Big Money began its ramping up:
One longstanding dividend stock within this ETF is Johnson & Johnson (JNJ), a giant, profitable healthcare company (22.3% profit margin) that’s been a recent Big Money magnet. The multi-year chart below shows lots of Big Money buying, and its current 2.39% dividend is part of the reason:
iShares S&P Mid-Cap 400 Value ETF (IJJ) Analysis
This is a “bargain bin” pick, but that’s because this ETF is getting battered around recently (unfairly in my opinion). IJJ holds smaller companies and has seen some Big Money buying in the past. It’s been choppy over the last year, but the longer-term performance proves it can hold a valuable place in a diversified portfolio:
One great stock in IJJ is Knight-Swift Transportation Holdings Inc. (KNX). It’s fundamentally strong – it has 3-year EPS growth of 31.9% and a 12.4% profit margin. But it’s down 25% this year so far. However, it wouldn’t surprise to see this one rise high again (it’s had 23 Top 20 Big Money buy signals since 2005):
Here’s a Big Money recap:
When Big Money buying pours in, stocks tend to go up
Red selling on great quality can be a great opportunity
Repeated buying usually means outsized gains
Bottom Line and Explanatory Video
VDE, SCHG, SCHH, HDV, and IJJ are my top ETFs for April 2022. VDE, SCHG, SCHH, and HDV rank high, while IJJ ranks lower due to weaker technicals. These picks can rise higher, in my opinion, largely because they each hold great stocks. One of them is discounted right now because of selling pressures. But as we know, deep red days often prove to be big opportunities over time.
Jason is a seasoned equity investor and quantitative analyst. He is currently co-founder of research and analytics firm, MAPsignals.com, focusing on identifying outlier stocks by following the Big Money.