Practical insights on ETFs, bonds and global markets for long-term investors – curated from fund managers, index providers and market analysts, with a link to every original source.
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By now, many investors can probably recite most investment strategists’ expectations for 2021 in their sleep. The common theme is an anticipated economic recovery. Although forecasts are inherently limited, after a tumultuous 2020, this sanguine consensus is certainly encouraging.
A shifting political environment and easy monetary policy are among the factors rewarding for cyclical stocks at the present. The industrial sector is one promising way for investors to home in on a cyclical recovery. Enter the Invesco DWA Industrials Momentum ETF ( PRN B ). PRN tracks the Dorsey Wright Industrials Technical Leaders Index, which is designed to identify companies that are showing relative strength (momentum), and is composed of at least 30 securities from the NASDAQ US Benchmark Index.
Economic growth is picking up as the vaccine rollout gains speed, commodity prices are heading higher, the government is proposing another large fiscal aid package, and the Federal Reserve is pledging to keep its very easy monetary policy intact for the foreseeable future.
Exchange traded fund investors seeking to diversify a traditional portfolio mix should consider the outlook for commodities and the fundamentals underlying the need for a longer-term, strategic allocation. In the recent webcast, Commodity Investing: Past, Present, and Future , Stan Kiang, Director of Strategic Accounts, Aberdeen Standard Investments, highlighted the benefits of commodities as an uncorrelated asset to traditional stock and bond exposures.
Look for growing gold strength in the iShares Core MSCI Emerging Markets ETF ( IEMG A ) and the iShares Gold Trust ( IAU A ). “Economic recovery in emerging markets will support consumer demand for gold in 2021, according to a report by the World Gold Council ( WGC ). Global gold production may also rise after a decline in 2020,” a TASS article said.
If you’ve been keeping up with my 2021 blog posts, you’ll know by now that my focus has been on the “ reflation trade .“ Certainly, not all market participants are convinced yet that inflation might make a comeback, but don’t tell that to the bond market.
Safe haven government debt yields have been on the rise. In order to extract maximum yield, fixed income investors can look at longer duration debt via ETFs like the Invesco BulletShares 2030 Corporate Bond ETF (BSCU) .
More investors are looking at riskier assets in order to obtain increasingly elusive yield. ETF provider VanEck is seeing strong inflows in three of its ETFs that focus on high yield debt. One fund that is highly sought after is the VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL) .
By Brandon Rakszawski, Senior ETF Product Manager, VanEck The Morningstar ® Wide Moat Focus Index SM (the “Index”) finished an up-and-down January slightly negative for the month but ahead of S&P 500 ® Index by more than 40 basis points (-0.58% vs. -1.01%, respectively).
The MSCI Emerging Markets Index is up nearly 9% to start 2021, and with that strong performance come questions from clients about revisiting developing economies. Advisors can meet that demand with model portfolios, including the Emerging Markets Multi-Factor Portfolio. “This model portfolio is designed for investors with a long-term horizon looking for exposure to a broad universe of Emerging Market equities primarily using factor focused ETFs.
Emerging market exchange traded fund investors should look to ongoing trends like recent China delisting headlines, the evolving situation with Alibaba and Jack Ma, and how Gen-Z will drive the digital transformation in the developing economies for decades.
As the innovation economy continues to drive performance in 2021, investors can look to exchange traded fund strategies to access new growth opportunities. In the recent webcast, Breaking the Mold: Approaching Innovation as a Fundamental Factor , Brian Levitt, Global Market Strategist, Invesco, outlined the nascent economic recovery and the potential for a drawn out rebound. “This new business cycle will likely play out every multiple years and that monetary policy will likely be accommodative for the foreseeable future,” Levitt said. “It appears that the economy is poised to accelerate, and that fiscal and monetary policy will be increasingly supportive,” he added.
Some investors in North America will finally be able to access a Bitcoin exchange traded fund. Just not in the United States. Late Thursday, Canadian regulators approved the Purpose Bitcoin ETF , which will trade on the Toronto Stock Exchange ( TSE ) under the ticker ‘ BTCC ’. “This ETF is an alternative mutual fund.