Investors have high expectations from 2021 after a 2020 hit by a pandemic. The introduction of the coronavirus vaccine, the introduction of the long-awaited new round of stimulus, and the Fed’s continued support for keeping interest rates low have added to investors’ hopes for a more economic recovery. fast in the United States. In addition, there is speculation about a larger stimulus package after President-elect Joe Biden takes over the administration, according to The Guardian article.
With the current scenario in mind, let’s discuss ETFs that can be good additions to the investor portfolio for promising returns in 2021:
IShares Global Energy Clean ETF (ICLN – Free report)
Alternative energy includes any energy source that acts as a substitute for conventional, non-renewable fossil fuel. This space has been in the news these days for several reasons. Increasingly, large companies are making or promising investments to achieve the most desired carbon neutral status. In addition, the green energy space has been a hot topic of debate in the U.S. election campaign. It should be noted that favorable government initiatives and federal policies, which include fiscal incentives to encourage installation, have accelerated the growth of the global clean energy market by 2020. In addition, despite the turmoil resulting from the coronavirus pandemic, both solar and wind energy have been dominating the global renewable space. in recent times.
The fund provides exposure to companies that produce energy from solar, wind and other renewable sources. With an AUM of $ 4.55 billion, the fund has an expense ratio of 46 basis points (bps) (read: S&P Global Talks to Buy IHS Markit focuses on these ETFs).
Amplify online retail ETFs (I BUY – Free report)
Online shopping is gaining favor among shoppers in an attempt to minimize human-to-human contact, as coronavirus cases continue to rise in the United States. A Mastercard SpendingPulse report highlights the same. Following the trend of digitization, online sales have increased by 49% compared to 2019 levels. Online sales also accounted for approximately 19.7% of total retail sales, compared to 13.4% in 2019 It should be noted that the pandemic has been an advantage for the e-commerce industry as people continue to prefer to stay indoors and shop online.
The fund provides a profitable way for investors to own a basket of companies with significant revenue from online or virtual retail sales. With an AUM of $ 1.45 billion, the fund has an expense ratio of 65 bps (read: 5 industry ETFs winning the market by 2020).
SPDR Emerging Markets Portfolio ETF (HOPE – Free report)
Along with the development of the coronavirus vaccine and the introduction of another round of stimulus, there are other factors that present a very strong case for ETFs in emerging markets. There was an impressive rise in this area of ETFs at the base of the weak dollar against the basket of currencies that has been dragging more capital into emerging markets. The greenback is expected to be under pressure in the short term, given the trillions of cheap money flowing into the economy and the prospect of further relaxation. Continuing, a Biden administration is expected to curb uncertainty in international trade policy and reduce trade tensions with China.
The fund seeks to provide investment results that, before commissions and expenses, generally correspond to the total return on the S&P emerging BMI index. With an AUM of $ 5.06 million, the fund has an expense ratio of 11 bps (read: 5 emerging market ETFs surpassing S&P 500 amid the scare of the virus).
Vanguard ESG US Stock ETF (ESGV – Free report)
The health crisis has also affected the investment world, as market participants have shown a greater interest in consciously investing, driving demand for environmental, social and governance (ESG) funds. Not only the coronavirus pandemic, but other factors such as protests against racism, geopolitical tensions and changing weather conditions are responsible for the growing popularity of sustainable investment funds. With growing demand, ESG funds are witnessing historic entry during the current year. It should be noted that investment in ESG has also shown some resilience and continues to gain the attention of investors amid the pandemic.
The fund tracks the performance of the US All Cap Choice FTSE index, which includes large, medium and small capitalization shares. It does not include companies operating in adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling and nuclear industries. Nor does it take into account companies that do not meet the United Nations global compact principles and diversity criteria. With 2 billion Australian dollars, the fund has a spending ratio of 12 bps (read: ESG ETFs remain in the midst of the pandemic: will they fail after the crisis?).
US Small Cap ETF Schwab (SCHA – Free report)
Small-cap stocks, as indicated by the Russell 2000 index, have outperformed the overall market and are reaching new all-time highs. This rise is largely driven by small-cap companies that are closely tied to the U.S. economy and are therefore well positioned to outperform as the economy improves. Recent developments, such as the launch of the coronavirus vaccine and the introduction of another round of fiscal stimulus, are expected to result in an improvement in the economy.
The purpose of the fund is to monitor as closely as possible, prior to commissions and expenses, the total profitability of the small-cap US Dow Jones stock market index. With an AUM of $ 12,999 million, the fund has an expense ratio of 4 bps (read: 5 small-cap ETFs operating on COVID-19 vaccines).
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