Another reason the current environment is conducive to quality stocks is the evolution of the economic cycle, With most economists forecasting slower GDP growth next year, it’s becoming clear that the recovery phase of the coronavirus recession is ending.
Multiple investment factors are off to solid starts in 2021, providing ballast for assets like the FlexShares Quality Dividend Dynamic Index Fund (NYSEArca: QDYN) . However, advisors and investors considering factor-based strategies should remember that factors, just like individual stocks, go through ups and downs.
Whether it’s momentum, volatility, size, quality, or value, there is no one-size-fits-all solution when it comes to factor investing. This is where multi-factor funds can assist, and one place to start is the strongest 2021 performers
With an energy rally underway thanks to strong oil prices and a keen interest in renewable sources, ETF investors can get a factor-based strategy in the sector using the John Hancock Multifactor Energy ETF ( JHME ), which is up 20% year-to-date.
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.
Interest rates are low and there’s not much to write home about regarding municipal bonds and Treasuries. Fortunately, dividend stocks are coming back into style. Advisors can leverage that trend with the WisdomTree Global Dividend Model Portfolio