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Investors have high expectations from 2021 after a pandemic-stricken 2020. The coronavirus vaccine rollout, introduction of the much-awaited fresh round of stimulus and the Fed’s continuous support to keep interest rates low have added to investors’ hope for a faster economic recovery in the United States. Moreover, there are speculations about a bigger stimulus package after President-elect Joe Biden takes over the administration, per The Guardian article.
Keeping the current scenario in mind, let’s discuss ETFs that can be good additions to investors’ portfolio for promising returns in 2021:
Alternative energy includes any energy source that acts as a replacement to conventional and non-renewable fossil fuel. This space has been making headlines these days for a number of reasons. Increasingly, big corporations are making or promising investments to achieve the most coveted carbon neutral status. Also, the green energy space has been a hot discussion topic in the U.S. election campaign. Notably, favorable government initiatives and federal policies, which include tax incentives to encourage installation, have accelerated global market growth for clean energy in 2020. Moreover, despite turbulences arising from the coronavirus pandemic, both solar and wind energies have been dominating the global renewable space in the recent times.
The fund provides exposure to companies that produce energy from 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).
Online shopping is gaining favor among shoppers in an attempt to minimize human-to-human contact as coronavirus cases continue to surge in the United States. A report by Mastercard SpendingPulse highlights the same. Keeping up with the digitization trend, online sales have surged 49% from 2019 levels. Online sales also accounted for roughly 19.7% of overall retail sales, up from about 13.4% in 2019. Notably, the pandemic has been a boon for the e-commerce industry as people continue to prefer staying indoors and shop online.
The fund provides a cost-efficient way for investors to own a basket of companies with significant revenues from online or virtual retail sales. With AUM of $1.45 billion, the fund has an expense ratio of 65 bps (read: 5 Sector ETFs That Beat the Market in 2020).
Along with coronavirus vaccine development and introduction of another round of stimulus there are other factors that are presenting a very strong case for the emerging markets ETFs. An impressive rally in this ETF area was observed on the back of the weak dollar against the basket of currencies that has been pulling in more capital into the emerging markets. The greenback is expected to remain under pressure in the short term given the trillions of cheap money flowing into the economy and the prospect of further easing. Going on, a Biden administration is expected to cut off uncertainty in international trade policy as well as reduce trade tensions with China.
The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Emerging BMI Index. With AUM of $5.06 billion, the fund has an expense ratio of 11 bps (read: 5 Emerging Market ETFs Beating S&P 500 Amid Virus Scare).
The health crisis has also impacted the investing world, with market participants showing greater interest toward conscious investing, spurring demand for environmental, social and governance (ESG) funds. Not only the coronavirus pandemic but other factors like protests against racism, geo-political tensions and changing climatic conditions are responsible for the growing popularity of sustainable investing funds. Riding on the surging demand, ESG funds are witnessing record inflows in the ongoing year. Notably, ESG investing has also shown some resilience and continues to gain investor attention amid the pandemic.
The fund tracks the performance of the FTSE US All Cap Choice Index comprising large-, mid-, and small-capitalization stocks. It does not include companies operating in adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling and nuclear power industries. It also doesn’t consider companies which do not meet the U.N. global compact principles and diversity criteria. With AUM of $2.94 billion, the fund has an expense ratio of 12 bps (read: ESG ETFs Stand Tall Amid Pandemic: Will They Fail Post Crisis?).
Small-caps stocks, as indicated by the Russell 2000 Index, has been outperforming the broader-market and is hitting new all-time highs. This upside is being largely led by the small-cap companies that are closely tied to the U.S. economy and thus are well positioned to outperform when the economy improves. The latest developments like the coronavirus vaccine rollout and introduction of another round of fiscal stimulus are expected to result in an improving economy.
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Small-Cap Total Stock Market Index. With AUM of $12.99 billion, the fund has an expense ratio of 4 bps (read: 5 Small-Cap ETFs Set to Explode on COVID-19 Vaccines).
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5 ETFs to Add to Your Portfolio in 2021
Investors have high expectations from 2021 after a pandemic-stricken 2020. The coronavirus vaccine rollout, introduction of the much-awaited fresh round of stimulus and the Fed’s continuous support to keep interest rates low have added to investors’ hope for a faster economic recovery in the United States. Moreover, there are speculations about a bigger stimulus package after President-elect Joe Biden takes over the administration, per The Guardian article.
Keeping the current scenario in mind, let’s discuss ETFs that can be good additions to investors’ portfolio for promising returns in 2021:
iShares Global Clean Energy ETF (ICLN - Free Report)
Alternative energy includes any energy source that acts as a replacement to conventional and non-renewable fossil fuel. This space has been making headlines these days for a number of reasons. Increasingly, big corporations are making or promising investments to achieve the most coveted carbon neutral status. Also, the green energy space has been a hot discussion topic in the U.S. election campaign. Notably, favorable government initiatives and federal policies, which include tax incentives to encourage installation, have accelerated global market growth for clean energy in 2020. Moreover, despite turbulences arising from the coronavirus pandemic, both solar and wind energies have been dominating the global renewable space in the recent times.
The fund provides exposure to companies that produce energy from 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 (IBUY - Free Report)
Online shopping is gaining favor among shoppers in an attempt to minimize human-to-human contact as coronavirus cases continue to surge in the United States. A report by Mastercard SpendingPulse highlights the same. Keeping up with the digitization trend, online sales have surged 49% from 2019 levels. Online sales also accounted for roughly 19.7% of overall retail sales, up from about 13.4% in 2019. Notably, the pandemic has been a boon for the e-commerce industry as people continue to prefer staying indoors and shop online.
The fund provides a cost-efficient way for investors to own a basket of companies with significant revenues from online or virtual retail sales. With AUM of $1.45 billion, the fund has an expense ratio of 65 bps (read: 5 Sector ETFs That Beat the Market in 2020).
SPDR Portfolio Emerging Markets ETF (SPEM - Free Report)
Along with coronavirus vaccine development and introduction of another round of stimulus there are other factors that are presenting a very strong case for the emerging markets ETFs. An impressive rally in this ETF area was observed on the back of the weak dollar against the basket of currencies that has been pulling in more capital into the emerging markets. The greenback is expected to remain under pressure in the short term given the trillions of cheap money flowing into the economy and the prospect of further easing. Going on, a Biden administration is expected to cut off uncertainty in international trade policy as well as reduce trade tensions with China.
The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Emerging BMI Index. With AUM of $5.06 billion, the fund has an expense ratio of 11 bps (read: 5 Emerging Market ETFs Beating S&P 500 Amid Virus Scare).
Vanguard ESG U.S. Stock ETF (ESGV - Free Report)
The health crisis has also impacted the investing world, with market participants showing greater interest toward conscious investing, spurring demand for environmental, social and governance (ESG) funds. Not only the coronavirus pandemic but other factors like protests against racism, geo-political tensions and changing climatic conditions are responsible for the growing popularity of sustainable investing funds. Riding on the surging demand, ESG funds are witnessing record inflows in the ongoing year. Notably, ESG investing has also shown some resilience and continues to gain investor attention amid the pandemic.
The fund tracks the performance of the FTSE US All Cap Choice Index comprising large-, mid-, and small-capitalization stocks. It does not include companies operating in adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling and nuclear power industries. It also doesn’t consider companies which do not meet the U.N. global compact principles and diversity criteria. With AUM of $2.94 billion, the fund has an expense ratio of 12 bps (read: ESG ETFs Stand Tall Amid Pandemic: Will They Fail Post Crisis?).
Schwab U.S. Small-Cap ETF (SCHA - Free Report)
Small-caps stocks, as indicated by the Russell 2000 Index, has been outperforming the broader-market and is hitting new all-time highs. This upside is being largely led by the small-cap companies that are closely tied to the U.S. economy and thus are well positioned to outperform when the economy improves. The latest developments like the coronavirus vaccine rollout and introduction of another round of fiscal stimulus are expected to result in an improving economy.
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Small-Cap Total Stock Market Index. With AUM of $12.99 billion, the fund has an expense ratio of 4 bps (read: 5 Small-Cap ETFs Set to Explode on COVID-19 Vaccines).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>