Wall Street had a tough run last week.The Nasdaq Composite and the S&P 500 declined 1.5%, while the Dow Jones Industrial Average lost 0.9%, respectively. Going by a CNBC article, the three major indexes witnessed their worst week since October.
The ongoing political turmoil in Washington following violence at Capitol Hill has kept investors on edge. This week, all eyes will be on President-elect Joe Biden’s inauguration day.
In the meantime, Biden has announced details of his $1.9-trillion stimulus plan, which has been named the American Rescue Plan. The relief package will extend the additional federal unemployment payment through September and will raise it to $400 per week. The new plan also includes $1,400 of direct payments to many Americans and extends the federal moratoriums on evictions and foreclosures through September, per
a CNBC article.
The stimulus proposal also allocates $350 billion in state and local governments support, sets aside around $70 billion for coronavirus testing and vaccination programs and increases the federal minimum wage to $15 per hour, according to the same CNBC article. It is worth noting here that there is ambiguity regarding whether Biden’s proposal will be approved in Congress.
Commenting on the market sentiment, Brian Price, head of investment management at the Commonwealth Financial Network, had said that “normally, we would expect risk assets to pull back during an event like this, but the market seems more focused on the next administration at this point,” per a CNBC article.
Thus, considering the present market conditions, let’s take a look at some top-ranked ETFs that can be great additions to your portfolios:
Vanguard Small-Cap Growth ETF ( VBK Quick Quote VBK - Free Report)
Small-cap companies are closely tied to the U.S. economy and are thus well-positioned to outperform when the economy improves. The Fed’s intention to keep supporting economic recovery also indicated that it will not hike rates until 2023. It is worth noting here that low rates are particularly beneficial for micro-cap stocks as it helps ramp up economic activities and boost domestically-focused companies. Moving on, the Fed’s stand on the inflation-related policies is expected to fuel bullish sentiments. The beginning of the inoculation process among people is buoying optimism.
The fund seeks to track the performance of the CRSP US Small Cap Growth Index. It has an AUM of $15.35 billion and charges 7 bps in expense ratio. The fund currently carries a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook (read:
5 Best ETF Investing Ideas for 2021). The Industrial Select Sector SPDR Fund ( XLI Quick Quote XLI - Free Report)
The industrial sector, which faced disruption in global supply chains and closedown of factories, is expected to rebound as the economy recovers from the coronavirus-led slump. The introduction of a coronavirus vaccine and addition of stimulus are expected to drive demand and economic activities in the sector.
The fund tracks the Industrial Select Sector Index. It has an AUM of $16.64 billion and charges 13 bps in expense ratio. The fund currently carries a Zacks ETF Rank #1, with a Medium-risk outlook (read:
4 Sector ETFs & Stocks Top Despite Soft December Jobs Data). iShares U.S. Technology ETF ( IYW Quick Quote IYW - Free Report)
Some major technology players have shown resilience to the coronavirus outbreak-led economic slowdown. These also highlight the important role that technology is playing with respect to helping people maintain social-distancing norms. The aggravating coronavirus outbreak resulted in Americans spending more time indoors and opting for in-house entertainment modes. Moreover, surging work-from-home and online shopping trends, increasing digital payments, growing video streaming and soaring video game sales have been observed during the pandemic. Keeping up with these new trends, a few major technology stocks have been gaining traction from the buoyancy in demand for their products and services.
The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones U.S. Technology Capped Index. It has an AUM of $6.69 billion. It charges investors 43 bps in annual fees as stated in the prospectus. The fund sports a Zacks ETF Rank #1 currently, with a Medium-risk outlook (read:
Bet on These Top-Ranked Technology ETFs Amid Soaring Covid-19 Cases). SPDR Portfolio S&P 500 Growth ETF ( SPYG Quick Quote SPYG - Free Report)
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 of faster economic recovery in the United States. Given the bullishness, investors seeking to capitalize on the strong trends should consider growth ETFs.
SPYG seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P 500 Growth Index. The index contains stocks that exhibit the strongest growth characteristics based on: sales growth, earnings change to price ratio, and momentum. It has an AUM of $9.51 billion. It charges investors 4 bps in annual fees as stated in the prospectus. The fund sports a Zacks ETF Rank #1, with a Medium-risk outlook (read:
5 ETFs to Grab for a Really Good Deal on Black Friday). VanEck Vectors Semiconductor ETF ( SMH Quick Quote SMH - Free Report)
The semiconductor market held its ground strongly amid the coronavirus mayhem. This space has been gaining from expanding digitization and growing dependency on the Internet owing to some new normal trends like online shopping, work from home, digital payments, digitization of healthcare, growing favor for video gaming and many more. In fact, growing adoption of cloud computing and the ongoing infusion of AI, machine learning and IoT are expected to keep the sector booming in 2021.
According to the latest
World Semiconductor Trade Statistics (WSTS) data, the global semiconductor market is now projected to rise 8.4% in 2021, based on double-digit growth of memory and optoelectronics. The forecast for 2021 is more than the previously-projected growth of 6.2%, made by the WSTS in July.
This fund tracks the MVIS US Listed Semiconductor 25 Index. The product has managed assets worth $4.23 billion, and charges 35 bps in annual fees and expenses. The fund carries a Zacks ETF Rank #2 (Buy), with a High-risk outlook (read:
U.S. Manufacturing Rebounds: Sector ETFs That Deserve Thanks). Want key ETF info delivered straight to your inbox?
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