As we move into 2021, investors are looking for new opportunities to grow their portfolios. With the market still uncertain due to the ongoing effects of the COVID-19 pandemic, many are considering turning to Exchange Traded Funds (ETFs) as a way to diversify and protect their assets. ETFs track the performance of a specific index or sector and are traded on major exchanges, making them a popular choice among both novice and experienced investors.
So, what are the top ETFs to watch in 2021? Here are a few that are generating buzz in the financial world:
1. ARK Innovation ETF (ARKK): Managed by Cathie Wood, ARK Invest’s founder and CEO, this ETF focuses on companies that are driving innovation in various industries such as technology, healthcare, and finance. With holdings in companies like Tesla, Square, and Teladoc Health, ARKK has seen impressive returns in recent years and is expected to continue its strong performance in 2021.
2. Vanguard Total Stock Market ETF (VTI): For investors looking for a broad exposure to the U.S. stock market, VTI is a solid choice. This ETF tracks the performance of the CRSP US Total Market Index, which includes large, mid, and small-cap stocks. With a low expense ratio and solid performance history, VTI is a reliable option for long-term investors.
3. iShares MSCI EAFE ETF (EFA): For those looking to diversify internationally, EFA provides exposure to developed markets outside of North America. With holdings in companies from Europe, Asia, and Australia, this ETF can help investors reduce their reliance on the U.S. market and take advantage of opportunities overseas.
4. SPDR Gold Shares (GLD): As a safe-haven asset, gold has always been a popular choice for investors during times of economic uncertainty. GLD tracks the performance of gold bullion and provides investors with a way to gain exposure to the precious metal without actually owning physical gold. With the potential for inflation and currency devaluation in 2021, GLD could be a smart addition to a well-diversified portfolio.
5. Invesco QQQ Trust (QQQ): This ETF tracks the performance of the Nasdaq-100 Index, which is composed of the largest non-financial companies listed on the Nasdaq Stock Market. With holdings in tech giants like Apple, Amazon, and Microsoft, QQQ has been a top-performing ETF in recent years and is expected to continue its strong performance in 2021.
Before investing in any ETF, it’s important to do your research and understand the risks involved. Consider factors such as expense ratios, performance history, and the underlying assets held by each ETF. With careful consideration and a diversified portfolio, ETFs can be a valuable tool for investors looking to navigate the markets in 2021.