Spain’s Bankinter has revealed its top ETFs selection for 2017, which favours a cyclical and a stock market approach.
In its selection, the bank includes stock ETFs from its preferred geographic areas — US and Europe, along with India for the more aggressive investment profiles, selecting the PowerShares India Portfolio tracker fund.
It also favours ETFs linked with the industrial and financial sector, which have the “greatest potential”, the bank said in a note to investors. To cover these sectors, Bankinter chooses the Financial Select Sector SPDR F and the iShares US Industrials ETF.
Within Europe, Bankinter bets on Italian stocks and the financial sector with the Lyxor Ucits ETF FTSE MIB – EUR as it expects a “non-dramatic outcome” for Italian banks after the bailout plan recently approved by the government.
European stocks are favoured on the back of two key data indicators: in December, IHS Markit’s 2016 manufacturing purchasing managers’ index for the eurozone registered 54.9, its highest since April 2011. In addition, corporate profits in 2017 are projected to recover, with expectations for EuroStoxx 600 to be boosted by 17%, Bankinter analysts said, selecting the Lyxor EURO STOXX 50 DR Ucits E for European stocks and the iShares Core DAX Ucits ETF DE to cover German stocks.
Despite the US experiencing historical highs, Bankinter analysts believe the American stock market presents positive prospects due to expectations of a hike in corporate profits and fiscal incentives. The US ETFs selected are SPDR S&P500 ETF Trust and iShares Russell 2000 ETF for US small caps.