The Top 5 ETFs to Watch in 2021
Exchange-traded funds, or ETFs, continue to grow in popularity among investors due to their diversification, low costs, and ease of trading. With the ever-changing landscape of the financial markets, it can be challenging to keep up with the best-performing ETFs. To help you navigate through the vast array of options, here are the top 5 ETFs to watch in 2021.
1. SPDR S&P 500 ETF (SPY)
The SPDR S&P 500 ETF, commonly known as SPY, is one of the most popular ETFs that tracks the performance of the S&P 500 index. With a low expense ratio and high liquidity, SPY provides investors with exposure to some of the largest and most established companies in the United States. In 2020, the ETF performed well despite the economic challenges brought on by the global pandemic. As we move into 2021, SPY remains a top pick for investors looking to gain broad market exposure.
2. ARK Innovation ETF (ARKK)
For investors seeking exposure to innovative and disruptive technologies, the ARK Innovation ETF is a top choice. Managed by Cathie Wood and her team at ARK Invest, ARKK invests in companies that are leading the way in areas such as genomics, robotics, and artificial intelligence. In 2020, the ETF delivered impressive returns, outperforming many traditional index funds. With the rapid pace of technological advancements, ARKK is poised to continue its strong performance in 2021.
3. Vanguard Total Stock Market ETF (VTI)
The Vanguard Total Stock Market ETF, or VTI, provides investors with exposure to the entire U.S. stock market, including large, mid, and small-cap stocks. With a rock-bottom expense ratio and a diverse portfolio of over 3,500 holdings, VTI is a cost-effective way to achieve broad market exposure. As we enter 2021, VTI remains a solid choice for investors seeking long-term growth and stability in their portfolios.
4. iShares MSCI Emerging Markets ETF (EEM)
For investors looking to diversify their portfolios and gain exposure to emerging market economies, the iShares MSCI Emerging Markets ETF is a top contender. EEM tracks the performance of companies in developing countries such as China, India, Brazil, and South Africa. With the potential for higher growth compared to developed markets, EEM offers investors an opportunity to capitalize on the economic expansion of emerging market nations. As global markets continue to recover from the impact of the pandemic, EEM is a compelling choice for investors seeking international diversification.
5. Invesco QQQ Trust (QQQ)
The Invesco QQQ Trust, also known as QQQ, tracks the performance of the Nasdaq-100 index, which includes 100 of the largest non-financial companies listed on the Nasdaq stock exchange. With a focus on technology, consumer discretionary, and healthcare sectors, QQQ offers investors exposure to some of the most innovative and growth-oriented companies in the U.S. In 2020, QQQ outperformed many other ETFs, driven by the strong performance of tech stocks. As we look ahead to 2021, QQQ is expected to continue its growth trajectory, making it a top ETF to watch.
In conclusion, ETFs continue to be a popular investment choice for investors looking to achieve diversified exposure to the financial markets. The top 5 ETFs to watch in 2021 offer investors a range of options, from broad market exposure to innovative technologies and emerging market opportunities. By incorporating these ETFs into your investment strategy, you can position yourself for potential growth and success in the year ahead.
