Investors have high expectations for 2021 after a pandemic affected by 2020. The launch of the coronavirus vaccine, the introduction of the long-awaited new round of stimulus and continued Fed support to keep interest rates low have added to investors’ hope for a faster economic recovery in the United States. . Moreover, there is speculation about a larger stimulus package after President-elect Joe Biden took over the administration, according to The Guardian.
Given the current scenario, let’s discuss ETFs that may 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 and non-renewable fossil fuel. This space has appeared nowadays for several reasons. Increasingly, large corporations are making or promising investments to achieve the most coveted carbon neutral status. Green space has also been a hot topic of discussion in the US election campaign. In particular, favorable government initiatives and federal policies, which include fiscal incentives to encourage installation, have accelerated the growth of the global clean energy market in 2020. Moreover, despite the turmoil caused by the coronavirus pandemic, both solar and wind farms dominated the global renewable space. in recent times.
The fund provides exposure to companies that produce energy from solar, wind and other renewable sources. With a total of $ 4.55 billion, the fund has an expense ratio of 46 basis points (bps) (read: S&P Global Talks to Buy IHS Markit puts these ETFs in the spotlight).
Amplify ETF online retail (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 grow in the United States. A report by Mastercard SpendingPulse highlights the same thing. Keeping pace with the digital trend, online sales increased by 49% compared to 2019 levels. Online sales also accounted for about 19.7% of total retail sales, up from about 13.4% in 2019 In particular, 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 investors with a cost-effective way to hold 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 sectoral ETFs that beat the market in 2020).
SPDR ETF portfolio for emerging markets (THE 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. An impressive rally in this area ETF was seen behind the weak dollar against the basket of currencies that brought more capital to emerging markets. It is estimated that the green dollar will remain under pressure in the short term, given the trillions of cheap money flowing into the economy and the prospect of further relaxation. Next, a Biden administration is expected to eliminate the uncertainty of international trade policy and reduce trade tensions with China.
The fund aims to provide investment results that, before commissions and expenses, generally correspond to the overall performance of the S&P Emerging BMI. With an AUM of $ 5.06 billion, the fund has an expense ratio of 11 bps (read: 5 ETFs for emerging markets that beat the S&P 500 behind the virus).
Vanguard ESG US Stock ETF (ESGV – Free report)
The health crisis has also had an impact on the investment world, with market participants showing a greater interest in conscious investment, stimulating the demand for environmental, social and governance (ESG) funds. Not only the coronavirus pandemic, but also other factors, such as protests against racism, geopolitical tensions and changing climate conditions, are responsible for the growing popularity of sustainable investment funds. Based on growing demand, ESG funds are witnessing record inflows in the current year. In particular, ESG investments have also shown some resilience and continue to gain the attention of investors amid the pandemic.
The fund tracks the performance of the US All Cap Choice FTSE index, which includes shares with high, medium and low capitalization. It does not include companies engaged in adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling and the nuclear energy industries. It also does not take into account companies that do not meet the UN’s compact global principles and diversity criteria. With an AUM of $ 2.94 billion, the fund has an expense ratio of 12 bps (read: ESGs rise in the middle of a pandemic: will they fail after the crisis?).
Schwab US Small-Cap ETF (Schaal – Free report)
Small-cap stocks, as indicated by the Russell 2000 index, outperformed the broader market and hit new all-time highs. This growth is largely driven by small-cap companies, which are closely tied to the US economy and are therefore well positioned to outperform as the economy improves. The latest developments, such as the launch of the coronavirus vaccine and the introduction of another round of fiscal incentives, are expected to lead to an improved economy.
The objective of the fund is to monitor as closely as possible, before commissions and expenses, the total profitability of the Dow Jones US Small-Cap Total Stock Market Index. With an AUM of $ 12.99 billion, the fund has an expense ratio of 4 bps (read: 5 low-capacity ETFs set to explode on COVID-19 vaccines).
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