4 Tactical ETFs to Consider for Corporate Bond Exposure

Higher-than-average yield is the number one reason most fixed income investors will add corporate bonds to their debt portfolio. Whether you’re looking for safer haven, investment-grade corporate bonds, or high-risk high-yield debt, VanEck offers plenty of options to consider: VanEck Vectors Fallen Angel High Yield Bond ETF (BATS: ANGL) : seeks to replicate as closely as possible the price and yield performance of the ICE BofAML US Fallen Angel High Yield Index, which is comprised of below investment grade corporate bonds denominated in U.S. dollars that were rated investment grade at the time of issuance.

Source: 4 Tactical ETFs to Consider for Corporate Bond Exposure

 

Plenty of thematic ETFs will enter 2021 with the potential to shine. Here’s a trio to consider.

WisdomTree Growth Leaders Fund (PLAT)

The premise behind the WisdomTree Growth Leaders Fund (NYSEARCA: PLAT) is simple. PLAT, which is higher by 59% year-to-date, is comprised of high octane companies with platform-based business models, such as Alphabet (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and PayPal(NASDAQ: PYPL).

Many PLAT companies can be seen as “modern monopolies” and nearly all of the ETF’s components fit the bill as a disruptive purveyors of seismic change in their respective industries. Both traits are positives for long-term investors.

“Our expectation is for platforms to disrupt competitive landscapes, and to gain market share at the expense of traditional, linear businesses — while doing so with better economies of scale and potential for long-term profitability,” according to WisdomTree. “PLAT can replace or complement both active and passive growth-oriented investment strategies.”

Roundhill Sports Betting & iGaming ETF (BETZ)

One of the true success stories among this year’s crop of new ETFs, the Roundhill Sports Betting & iGaming ETF (NYSEARCA: BETZ) is a prime example of a thematic ETF entering 2021 with an array of tailwinds.

BETZ debuted in early June and has already returned 62.39% while accumulating $200 million in assets under management.

Buoyed by Wall Street’s seemingly undaunted enthusiasm for sports wagering equities, BETZ enters 2021 with multiple catalysts, namely increased legalization of iGaming and sports betting by cash-strapped states. Near-term sparks could arrive via New York signing off on mobile betting and Massachusetts signaling sports betting will be addressed and passed in the 2021 legislative session.

Adding to the case for BETZ in 2021 is that the new year will be the first full year of sports wagering in new “live and legal” states, such as Colorado, Illinois, Michigan and Tennessee. 

The sports calendar should normalize in the back half of the year.

ARK Fintech Innovation ETF (ARKF)

The ARK Fintech Innovation ETF (NYSEARCA: ARKF) already more than doubled this year, meaning asking for a sequel in 2021 borders on the greedy, but that doesn’t mean investors should gloss over ARKF.

It’s a time when bitcoin is surging, cashless payments are taking more market share and digital wallets are deeply undervalued.

As companies such as Square (NYSE: SQ), ARKF’s top holding, further monetize digital wallets, the future is bright for this actively managed ETF.

“We believe that Square’s (SQ) Cash App could become a leading global consumer financial services provider,” according to ARK research. “If Cash App can monetize 20% of its US user base at the level of traditional banks today, then with modest growth in its seller business, SQ could return 19% at an annual rate during the next five years, rising from $150 today to $375 per share in 2025.

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