As we enter 2021, many investors are looking for opportunities to maximize their returns through Exchange-Traded Funds (ETFs). ETFs have become increasingly popular in recent years as a way to diversify portfolios and access different sectors of the market with ease. With so many options available, it can be overwhelming to decide which ETFs to watch in the coming year. To help guide your investment decisions, we reached out to experts in the field to get their insights on the top ETFs to watch in 2021.
### 1. Technology Sector ETFs
The technology sector has been a standout performer in recent years, and many experts believe this trend will continue into 2021. With the increasing reliance on technology due to the shift to remote work and the rise of e-commerce, investing in technology sector ETFs could be a smart move. Some top picks in this category include the Invesco QQQ Trust (QQQ) and the Technology Select Sector SPDR Fund (XLK).
### 2. ESG ETFs
Environmental, Social, and Governance (ESG) investing has gained traction in recent years as investors look to align their values with their investment strategies. ESG ETFs focus on companies that meet certain sustainability criteria, making them a popular choice among socially-conscious investors. Some top ESG ETFs to watch in 2021 include the iShares ESG MSCI USA Leaders ETF (SUSL) and the Xtrackers MSCI USA ESG Leaders Equity ETF (USSG).
### 3. Healthcare Sector ETFs
The healthcare sector has been in the spotlight this year due to the COVID-19 pandemic, and experts believe it will continue to be a key area of focus in 2021. Healthcare sector ETFs provide exposure to companies involved in areas such as pharmaceuticals, biotechnology, and medical devices. Some top healthcare sector ETFs to watch include the Health Care Select Sector SPDR Fund (XLV) and the iShares U.S. Healthcare ETF (IYH).
### 4. Emerging Markets ETFs
While developed markets have been the focus of many investors in recent years, experts believe that emerging markets could offer attractive opportunities in 2021. Emerging markets ETFs provide exposure to economies that are experiencing rapid growth and industrialization, making them a potentially lucrative investment. Some top picks in this category include the iShares MSCI Emerging Markets ETF (EEM) and the Vanguard FTSE Emerging Markets ETF (VWO).
### 5. Growth vs. Value ETFs
The debate between growth and value investing has been ongoing for years, and it’s likely to continue in 2021. Growth ETFs focus on companies that are expected to experience above-average earnings growth, while value ETFs focus on companies that are undervalued relative to their fundamentals. Depending on your investment goals and risk tolerance, you may want to consider allocating to both growth and value ETFs to achieve a balanced portfolio.
In conclusion, the top ETFs to watch in 2021 cover a range of sectors and investment strategies, giving investors plenty of options to choose from. Whether you’re looking to capitalize on the growth of the technology sector, invest in socially responsible companies, or diversify your portfolio with exposure to emerging markets, there are ETFs available to meet your needs. By staying informed and monitoring market trends, you can make informed decisions about which ETFs to watch and potentially profit from in the coming year.
