Investors have high expectations starting in 2021, after a 2020 pandemic. The launch of the coronavirus vaccine, the introduction of the long-awaited new stimulus round and the continued support of the Fed to keep interest rates low have raised hope for investors. investors from a faster economic recovery in the United States. In addition, there is speculation about a bigger stimulus package after President-elect Joe Biden takes over, according to the Guardian article.
Keeping the current scenario in mind, let’s discuss ETFs that could be good additions to the investor portfolio for promising returns in 2021:
iShares Global Clean Energy ETF (ICLN – Free report)
Alternative energy includes any energy source that acts as a substitute for conventional, non-renewable fossil fuel. This space has made headlines these days for a number of reasons. Increasingly, large corporations are making or promising investments to achieve the most coveted carbon neutral status. In addition, the green energy space has been a hot topic of discussion in the US election campaign. Notably, favorable government initiatives and federal policies, which include tax incentives to encourage installation, accelerated the growth of the global clean energy market in 2020. In addition, despite the turbulence resulting from the coronavirus pandemic, solar and wind power have dominated the global renewable space in recent times.
The fund offers exposure to companies that produce solar, wind and other renewable sources. With 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 Put these ETFs in focus).
Amplify Online Retail ETF (I BUY – Free report)
Online shopping is gaining preference among shoppers in an attempt to minimize human-to-human contact, as coronavirus cases continue to increase in the United States. A report by Mastercard SpendingPulse highlights the same. Following the digitalization trend, online sales increased by 49% compared to 2019 levels. Online sales also represented around 19.7% of general retail sales, compared to 13.4% in 2019. Notably, the pandemic was a blessing for the e-commerce sector, as people still prefer to stay home and shop online.
The fund offers an economical way for investors to acquire a basket of companies with significant revenues from online or virtual retail sales. With AUM of $ 1.45 billion, the fund has an expense rate of 65 bps (read: 5 ETF sector that beat the market in 2020).
Emerging markets ETF from SPDR portfolio (SPEM – Free report)
Along with the development of the coronavirus vaccine and the introduction of another round of stimuli, there are other factors that present a very strong case for emerging market ETFs. An impressive recovery in this ETF area has been observed due to the weak dollar against the currency basket that has been pulling more capital into emerging markets. The dollar should remain under pressure in the short term, given the trillions of cheap money flowing into the economy and the prospect of further easing. Continuing, it is expected that a Biden government will eliminate uncertainties in international trade policy and also reduce trade tensions with China.
The fund seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the S&P Emerging BMI Index. With AUM of $ 5.06 billion, the fund has an expense rate of 11 bps (read: 5 emerging market ETFs beating the S&P 500 amid fear of the virus).
Vanguard ESG US Stock ETF (ESGV – Free report)
The health crisis has also affected the world of investors, with market participants showing greater interest in conscious investments, stimulating demand for environmental, social and governance (ESG) funds. Not only the coronavirus pandemic, but other factors such as protests against racism, geopolitical tensions and changes in climatic conditions are responsible for the growing popularity of sustainable investment funds. Taking advantage of increased demand, ESG funds are witnessing record inflows this year. Notably, ESG investments have also shown some resilience and continue to gain investors’ attention in the midst of the pandemic.
The fund tracks the performance of the FTSE US All Cap Choice Index, which comprises large, medium and small capitalization stocks. It does not include companies that operate with adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling and nuclear power industries. Nor does it consider companies that do not meet the principles of the UN global pact and diversity criteria. With AUM of $ 2.94 billion, the fund has an expense rate of 12 bps (read: ESG ETFs stand firm in the midst of the pandemic: will they fail after the crisis?).
Schwab US Small-Cap ETF (SCHA – Free report)
Small cap stocks, as indicated by the Russell 2000 Index, have outperformed the broader market and are reaching new highs. This positive side is being largely led by small caps that are closely linked to the US economy and are therefore well positioned to outperform when the economy improves. The most recent developments, such as the launch of the coronavirus vaccine and the introduction of another round of fiscal stimulus, should result in an improving economy.
The fund’s objective is to monitor as closely as possible, before fees and expenses, the total return of the Dow Jones US Small-Cap Total Stock Market Index. With AUM of $ 12.99 billion, the fund has an expense rate of 4 bps (read: 5 Small-Cap ETFs set to explode in the COVID-19 vaccines).
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