Best etf for each sector

Best etf for each sector DEFAULT

16 Best Sector Funds to Invest in Now

Look at the stock fund performance rankings for almost any time frame—one year, 10 years or any calendar year—and a handful of sector funds, which concentrate on a single industry or slice of the economy, will pepper the top of the list. In , for instance, seven sector funds—including Fidelity Select Semiconductors, with a % return—ranked among the 10 best-performing stock mutual funds. Over the 12 months ending in mid September, sector-focused exchange-traded funds did even better, taking all top 10 spots.

These targeted bets can be good additions to your portfolio. Sector funds allow you to invest in a long-term growth trend—renewable energy, say, or genome-related health therapies—without having to shoulder as much stock-specific risk as you would by buying shares in individual companies.

Moreover, adding a certain sector fund can inject a bit of defense or offense into your portfolio, depending on the economic environment. In a recession, for instance, makers of consumer staples (shampoo, baby-care products and such), utilities and health care stocks tend to hold up nicely. Real estate and materials firms, as well as makers of nonessential consumer goods (luxury apparel or restaurants, say), do well during economic recoveries.

Pay mind, though, to certain sector-investing dos and don’ts. Stick to small bites: Put no more than 6% of your U.S. stock portfolio in sector funds, divided evenly between no more than three different sectors, say analysts at State Street Global Advisors. Sector investing requires some ongoing monitoring, too. Keep an eye on valuations: Buy on dips, es­pecially in those sectors that have performed well in recent months. And finally, be aware of stock concentration. Some sectors are heavily weighted in just a few companies.

We’ve highlighted the best funds and ETFs in almost every sector. In some cases, one fund stands in for two sectors. Energy in the traditional sense is not represented among our recommendations, for reasons we’ll discuss. (Returns and other data are as of September )

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Best Sector Funds: Communication Services

Communications graphic

In late , S&P Dow Jones Indices reconfigured its sectors to form a new one, communication services. The shuffle grouped old telecom firms AT&T (symbol T) and Verizon Communications (VZ) with prized tech stocks, including Facebook (FB), Alphabet (GOOGL) and Net­flix (NFLX, and media com­panies such as Walt Disney (DIS), among others. But only a handful of communication services funds are truly devoted to the sector (most funds fold in tech and consumer stocks). And the sector is top-heavy: Facebook and Alphabet combined make up 40% of the S&P Communication Services index.

Our favorite pure play, Fidelity Select Communication Services (FBMPX, expense ratio %), is actively managed by Matthew Drukker, who centers on U.S. company stocks with big revenue growth potential. In this sector, he says, “sales growth drives earnings and cash flow more sustainably than cutting costs or shifting the business mix.” Facebook and Alphabet make up 40% of the portfolio, but the fund does not own struggling AT&T, and that has been a boon to recent performance. Since Drukker took over nearly two years ago, the fund’s % annualized return has beaten the % gain in the S&P Communication Services index.

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Best Sector Funds: Consumer

Consumer sector graphic

Consumer stocks fall into one of two categories: staples or consumer dis­cretionary. Staples companies, which make goods people tend to use every day, include firms such as Nestlé (food and beverages) and Procter & Gamble (household and personal-care products). Consumer discretionary com­panies specialize in nonessential merchandise or services. Think Nike (NKE), McDonald’s (MCD) and luxury goods maker LVMH Moët Hennessy Louis Vuitton (LVMH).

But when it comes to picking good stocks in either category, you should keep your eye on what matters most: “Who’s taking market share, and where are the dollars going?” says Jason Nogueira, manager of T. Rowe Price Global Consumer (PGLOX, %). “It’s hard to make money in a consumer company that’s losing market share.”

Nogueira invests in both staples and discretionary companies. When the fund launched in , the portfolio was balanced between the two sectors. Growth in e-commerce has swelled the discretionary side of the portfolio to 60% of assets. Amazon.com accounts for 14% of the portfolio.

The fund holds U.S. and foreign stocks, but in some cases, domicile hardly matters. “Adidas and Nike are similar, but one is based in Germany. Both are bets on China,” Nogueira says. But he also invests in local firms dominating a consumer trend, such as Japanese online cosmetics company istyle and high-tech Chinese grocer JD.com (JD).

The fund has returned % annu­alized over the past three years, which beat the typical consumer staples fund but lagged the typical consumer discretionary fund by an average of percentage points per year. It outdid the MSCI ACWI index by an average of percentage points per year.

For a targeted shot at internet retailing, try Amplify Online Retail ETF (IBUY, $84, %). It tracks an index of U.S. and foreign companies that generate at least a majority of annual revenues from internet-based retail, travel or services. Our favorite staples ETF is Fidelity MSCI Consumer Staples ETF (FSTA, $39, %). Procter & Gamble (PG), Coca-Cola(KO) and Walmart (WMT) are top holdings.

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Best Sector Funds: Financials

Financials sector graphic

Financial firms typically do well during an economic recovery. But even before COVID slammed the global economy, chronically low interest rates were crimping earnings. That’s one reason stocks in this sector have slumped % so far in It’s also why our choices in this sector tilt toward financial services firms that are more fee-oriented.

Consider iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI, $62, %). The portfolio holds stocks in 25 firms, including capital-markets companies (Goldman Sachs), brokers (Charles Schwab) and exchanges (Nasdaq). The fund has held up better than the % decline in the S&P Financials index over the past 12 months, with a % decline. And over the past three years, it beat 94% of its peers with a % annualized return. The ETF yields %.

A good actively managed option is Fidelity Select Brokerage and Investment Management (FSLBX, %). The fund has done well over the past 12 months, with a % gain. Manager Charlie Ackerman is relatively new, but he’s off to a fantastic start with an % annualized return since he took over in Compare that with the % loss in the S&P Financials index over the same period.

4 of 8

Best Sector Funds: Health Care

Health care sector graphic

If the experts are right and we’re on the verge of a tidal wave of medical breakthroughs, long-term investors should consider allocating a little extra to the health care sector.

Fidelity Select Health Care (FSPHX, %), a member of the Kiplinger 25, the list of our favorite no-load funds, offers a one-stop way to invest in the broad sector. Manager Eddie Yoon has run the fund since with spectacular results. Compared with other health funds, Yoon ranks among the top 13% or better over the past one, three, five and 10 years. And he has outpaced the S&P Health Care index in eight of the past 11 calendar years. Baron Health Care (BHCFX, %) skews more of its portfolio toward small and midsize companies than the Fidelity fund. It has only a two-year history, but it has returned % annualized since its launch, which has beaten the S&P Health Care index by an average of percentage points per year. Managers Neal Kaufman and Josh Riegelhaupt look for fast-growing companies with “open-ended opportunities in large markets and competitive advantages over peers,” says Kaufman.

The pandemic has put a spotlight on biotech stocks. “It’s clear that biotech companies will be part of the solution,” says Rajiv Kaul, manager of Fidelity Select Biotechnology (FBIOX, %). But investing in biotech firms comes with unique challenges. For starters, firms tend to specialize in a particular malady. “Each disease is different, so the risks and opportunity sets vary for each company,” he says.

But Kaul revels in the research required to invest in biotech because when a new treatment works, it can be life changing. That’s one reason he favors companies with a therapy that addresses a major unmet medical need. AveXis (AVXS), for instance, has a therapy for spinal muscular atrophy, a rare and deadly genetic disease. Its one-time infusion is costly, says Kaul, but trials show it can provide profound benefits.

The fund had a rough go in and But over the long haul, its year annualized return ranks among the top 13% of all health funds.

Innovation is driving earnings at medical-device companies, too. IShares U.S. Medical Devices (IHI, $, %) has a three-year % annualized return, which beat 96% of its peers. Top holdings include Abbott Labs (ABT) and Thermo Fisher Scientific (TMO).

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Best Sector Funds: Industrials

industrials sector graphic

After a nearly two-year funk, industrial companies are poised to rebound as the world’s economies recover post-COVID, says Jason Adams, manager of T. Rowe Price Global Industrials (RPGIX, %). “Right now is an excellent time to look at the global industrial sector.”

Adams sifts through industrial companies of all sizes from all over the world, looking for what he calls “differentiated” high-quality industrial firms with durable growth prospects. To Adams, that means industrial companies that are plugged into technology. Swedish firm Hexagon, for instance, provides sensor, software and automation technologies to industrial manufac­turers. Japan-based Keyence is a global leader in machine vision, which is used in such tasks as inspecting industrial products, reading characters and codes, and positioning industrial robots. These companies are on the “right side of change,” says Adams, “and are leaders in driving the in­dustry forward on the Internet of Things and the fusion of hardware, software and connectivity.” 

Adams is new to the fund—something we’d normally be wary of—but he’s not new to the sector. He has been analyzing industrial companies for nearly two decades. Since he joined longtime manager Peter Bates in March, the fund has returned %, ahead of the % gain in the typical industrials fund. Bates left the fund in June.

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Best Sector Funds: Information Technology

information sector graphic

Chances are that you already have a lot of exposure to tech stocks. The sector—the biggest one—makes up % of the S&P It makes sense, then, to look beyond the usual if you want to have even more tech in your portfolio.

So instead of buying a tech fund that gives you more exposure to Apple (AAPL) and Microsoft (MSFT), for instance, consider ARK Innovation ETF (ARKK, $85, %), which doesn’t own either stock. Manager Catherine Wood heads the actively managed fund, aiming to find companies that will best benefit from disruptive innovation in five broad areas: genome sequencing, robotics, artificial intelligence, energy storage and block-chain tech­nology. Veracyte (VCYT), for example, is a genomic diagnostics company; Materialise (MTLS) makes 3-D printing software. Some funds “will own any company that mentions the word robotics,” says Ark spokesman Renato Leggi. “We take a rifle-shot approach by investing in a select group of stocks that we think will be the winners.”

Over the past three years, the ETF has returned % annualized, an average of nearly 19 percentage points per year ahead of the typical tech fund. A mutual fund version of this strategy is also available in American Beacon ARK Transformational Innovation (ADNPX, %).

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Best Sector Funds: Materials

materials sector graphic

Stocks in this sector find, develop and process raw materials to manufacture plastic, paper, concrete, metals and more. Sounds rudimentary, and it is—literally. But these stocks tend to beat the broad market during economic recoveries, including in and What’s more, some areas of the sector are in demand now from new technologies (batteries for electric vehicles, for instance, require lithium). But if you dip a toe in, be ready for volatility. Over the past 10 years, materials stocks were among the market’s most volatile, more so even than tech shares.

You can slice the sector finely with ETFs that focus on lithium, copper or timber (all of which have done particularly well over the past year). But we prefer to stay broad, with Materials Select Sector SPDR ETF (XLB, $, %) or iShares Global Materials ETF (MXI, $72, %). Both funds have delivered above-average returns with below-average volatility. Materials Select Sector holds the 28 stocks in the S&P that fall within the sector, including industrial gas companies Linde (LIN) and Air Products & Chemicals (APD), and paint company Sherwin-Williams (SHW). The ETF yields %. Global Materials holds 70% of its assets in foreign stocks. With international dividends more generous overall than U.S. payouts, its inter­national flavor means a fatter yield of %. The ETF holds stocks. Linde, Australia-based mining firm BHP Group and Air Liquide, a French industrial gas and service company, are top holdings.

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Best Sector Funds: Utilities/Real Estate

real estate sector graphic

Reaves Utilities and Energy Infrastructure (RSRFX, %) holds mostly utilities. About 40% of its assets are in utility firms with solid renewable-energy stakes, such as NextEra Energy (NEE). Demand for renewable energy is growing, and costs are declining, says comanager Timothy Porter. “That’s a powerful economic driver.” Another 24% of the fund is made up of cable companies that Porter characterizes as “unregulated monopolies.”

But the fund has a hefty slug—more than 20% of assets—in real estate investment trusts as well. That’s considerably more than the 3% of the S&P held in real estate stocks, so Reaves does double duty as our favorite real estate fund, too. The managers concentrate on what we think is the best area of the REIT business these days: data centers, which own and manage facilities for computer servers that store data.

What the fund no longer owns, despite its moniker, is energy stocks. The industry is in decline, Porter says. “Every day that goes by, the cost of building a  solar plant falls, and there’s more concern about climate change and regulatory efforts to address that,” he says. “It makes fossil fuel companies less and less attractive.” We agree, which is why we are not recommending an all-energy sector bet at this time.

Over the past five years, the Reaves fund has outpaced the typical utility fund, with less volatility, too. One catch: The fund isn’t widely available in brokerage no-fee networks. TD Ameritrade is one exception. You can invest directly through Reaves by calling

Sours: https://www.kiplinger.com/investing/mutual-funds//best-sector-funds-to-invest-in-now

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Trying to choose winning stocks in the market can be one of the most stressful parts of investing. What if you could start investing without having to pick the right stock?

That’s what exchange-traded funds (ETFs) are all about. When you invest in ETFs, you get access to a wide array of the stock market all at once, providing you with an instant safety net as your investments are all spread out. It gives you a chance to take advantage of the overall performance of the market.

If you’re looking to start investing — or if you’re already experienced and you want an expert-recommended path to growing your wealth over time — here’s what you need to know about the best ETFs of

What Are ETFs?

Exchange-traded funds, or ETFs, represent a basket of investments. Many of the most popular ETFs focus on stocks and bonds, but there are also ETFs that include commodities and foreign currencies.

“Think of ETFs as a bag of Skittles,” says Jully-Alma Taveras, a bilingual financial expert and founder of Investing Latina. One package of Skittles is filled with a number of different flavors, and it’s easy to trade different packages. 

Pro Tip

Some of the best ETFs are those that offer exposure to a large swath of the market, providing instant diversity with one investment.

“ETFs are useful because you can get a mix of stocks without having to do too much research or individual stock analysis,” Taveras says. “Adding them to your portfolio allows you to acquire more shares of the companies within that ETF. They also can help protect your portfolio, because ETFs can be created to be broadly diverse.”

Diversifying your portfolio is a healthy part of financial wellness since it spreads out your investments among numerous companies, instead of just one. 

You can hold ETFs in taxable brokerage accounts, through brokerages such as Fidelity or Charles Schwab, as well as in tax-advantaged retirement accounts like a Roth IRA or (k). 

How Do ETFs work?

An ETF is a basket of investments that trades on the stock market, just as you would trade any other stock. 

ETFs aren’t mutual funds. Though they’re very similar, mutual fund transactions have to be settled at the end of each day, and so shares of mutual funds can only be bought and sold once a day. ETFs, on the other hand, can be traded throughout the day and are treated like stocks on the exchange.

Best ETFs for

The best ETFs, according to investing experts, are index funds. Index funds are low-cost and give you exposure to an entire market. 

“Start with index ETFs because they come with low expenses and provide instant diversity,” says Alissa Krasner Maizes, a financial planner and founder of the financial education website Amplify My Wealth. Some of the ETFs she suggests might be a good fit for a wide variety of people include:

  • Vanguard Total Stock Market ETF (VTI)
  • Vanguard Total International Stock ETF (VXUS)
  • Vanguard Total Bond Market ETF (BND)
  • Vanguard Total International Bond ETF (BNDX)

Taveras also likes ETFs that take advantage of the S&P , which tracks the largest companies in the United States, including:

  • Vanguard Index ETF (VOO)
  • SPDR S&P ETF Trust (SPY)

It’s also possible to look for ETFs that follow a specific sector, if you’re interested in areas like technology and healthcare, according to Taveras. She suggests considering such sector index ETFs as:

  • Vanguard Information Technology Index Fund ETF (VGT)
  • First Trust Dow Jones Internet Index ETF (FDN)
  • Health Care Select SPDR Fund (XLV)
  • Vanguard Health Care Index Fund (VHT)

In general, ETFs that follow specific sectors will carry higher fees and are subject to more volatility than ETFs that track entire markets. 

Top Equity ETFs

As of , there were more than 2, ETFs available in the United States, and more than 7, available worldwide. Determining the top equity ETFs can be difficult, but Maizes recommends comparing the performances and fees of index ETFs to their actively managed counterparts. Experts suggest passively managed funds to keep expenses low and avoid higher taxes.

“Investors should always consider that actively managed funds usually have more significant taxable implications at the end of the year,” she says. “Also, those sectors are likely already represented in a diversified investment portfolio.”

How to Invest in ETFs

Investing in ETFs can be done on  your own. both Taveras and Maizes suggest looking for a brokerage account with low fees. Fidelity, eTrade, Charles Schwab and others offer access to free trades on ETFs. Many robo-advisors like Betterment, Acorns and Wealthfront don’t allow you to choose your own investments, but they construct your portfolio using ETFs.

Maizes recommends comparing different ETFs and their fees. All ETFs have expense ratios, which are administrative fees charged by the fund. Index ETFs generally have smaller expense ratios than actively-managed ETFs. Keep an eye out for low expense ratios, somewhere near %%. If you see an expense ratio in the 1% range, try to pick another fund that’s lower. A high expense ratio will eat into your profits.

ETF FAQs

Are ETFs risky?

As with any investment, some ETFs are riskier than others. In general, index ETFs and all-market are considered less volatile because they offer exposure to a wide swath of the market. As with any investment, though, there is the risk of loss, especially if you sell when prices are low. When you invest in ETFs or any other types of investments, long-term holding is the name of the game. Try to keep your money in as long as you can so that compound interest can work its magic and you can ride out ups and downs in the market.

How much money do you need to invest in an ETF?

In many cases, it’s possible to purchase shares of an ETF with a few dollars. Some brokers offer fractional shares of ETFs, allowing you to purchase a portion of an ETF share and take advantage of potential growth even if you don’t have enough money to buy a full share.

How do you trade ETFs?

You can place a market order for an ETF through your brokerage account, just as you would when buying any other stock. Look for the ticker symbol of the ETF you’re interested in and place your order.

Sours: https://time.com/nextadvisor/investing/best-etfs-to-buy/
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Best ETFs to buy in

Exchange-traded funds (ETFs) allow investors to buy a collection of stocks or other assets in just one fund with (usually) low expenses, and they trade on an exchange like stocks. ETFs have become tremendously popular in the last decade and now hold trillions of dollars in assets. With literally thousands of ETFs to choose from, where does an investor start? And with the stock market rising furiously after an initial plunge as part of the coronavirus crisis, what are the best ETFs to buy? Below are some of the top ETFs by category, including some highly specialized funds.

Best ETFs for

How to choose the right type of ETF for you

Equity ETFs

Bond ETFs

Balanced ETFs

Commodity ETFs

Currency ETFs

Real estate ETFs

Volatility ETFs

Leveraged ETFs

Inverse ETFs

Top Equity ETFs

Equity ETFs provide exposure to a portfolio of publicly traded stocks, and may be divided into several categories by where the stock is listed, the size of the company, whether it pays a dividend or what sector it&#x;s in. So investors can find the kind of stock funds they want exposure to and buy only stocks that meet certain criteria.

Stock ETFs tend to be more volatile than other kinds of investments such as CDs or bonds, but they&#x;re suitable for long-term investors looking to build wealth. Some of the most popular equity ETF sectors and their returns (as of July 26) include:

Top U.S. market-cap index ETFs

Vanguard S&P ETF(VOO)

This kind of ETF gives investors broad exposure to publicly traded companies listed on American exchanges using a passive investment approach that tracks a major index such as the S&P or Nasdaq

Vanguard S&P ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years):  percent
  • Expense ratio: percent

Some of the most widely held ETFs in this group also include SPDR S&P ETF Trust (SPY), iShares Core S&P ETF (IVV) and Invesco QQQ Trust (QQQ).

Top International ETFs

Vanguard FTSE Developed Markets ETF (VEA)

This kind of ETF can provide targeted exposure to international publicly traded companies broadly or by more specific geographic area, such as Asia, Europe or emerging markets. Investing in foreign companies introduces concerns such as currency risk and governance risks, since foreign countries may not offer the same protections for investors as the U.S. does.

Vanguard FTSE Developed Markets ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held ETFs also include iShares Core MSCI EAFE ETF (IEFA), Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard Total International Stock ETF (VXUS).

Top Sector ETFs

Vanguard Information Technology ETF (VGT)

This kind of ETF gives investors a way to buy stock in specific industries, such as consumer staples, energy, financials, healthcare, technology and more. These ETFs are typically passive, meaning they track a specific preset index of stocks and simply mechanically follow the index.

Vanguard Information Technology ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held ETFs also include Financial Select Sector SPDR Fund (XLF), Energy Select Sector SPDR Fund (XLE) and Industrial Select Sector SPDR Fund (XLI).

Dividend ETFs

Vanguard Dividend Appreciation ETF (VIG)

This kind of ETF gives investors a way to buy only stocks that pay a dividend. A dividend ETF is usually passively managed, meaning it mechanically tracks an index of dividend-paying firms. This kind of ETF is usually more stable than a total market ETF, and it may be attractive to those looking for investments that produce income, such as retirees.

The best dividend ETFs tends to offer higher returns and low cost.

Vanguard Dividend Appreciation ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held ETFs here also include) Vanguard High Dividend Yield Index ETF (VYM) and Schwab U.S. Dividend Equity ETF (SCHD).

Top bond ETFs

A bond ETF provides exposure to a portfolio of bonds, which are often divided into sub-sectors depending on bond type, their issuer, maturity and other factors, allowing investors to buy exactly the kind of bonds they want. Bonds pay out interest on a schedule, and the ETF passes this income on to holders.

Bond ETFs can be an attractive holding for those needing the safety of regular income, such as retirees. Some of the most popular bond ETF sectors and their returns (as of July 26) include:

Long-term bond ETFs

iShares MBS ETF (MBB)

This kind of bond ETF gives exposure to bonds with a long maturity, perhaps as long as 30 years out. Long-term bond ETFs are most exposed to changes in interest rates, so if rates move higher or lower, these ETFs will move inversely to the direction of rates. While these ETFs may pay a higher yield than shorter-term bond ETFs, many don&#x;t see the reward as worthy of the risk.

iShares MBS ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held ETFs also include iShares 20+ Year Treasury Bond ETF (TLT) and Vanguard Mortgage-Backed Securities ETF (VMBS).

Short-term bond ETFs

Vanguard Short-Term Bond ETF (BSV)

This kind of bond ETF gives exposure to bonds with a short maturity, typically no more than a few years. These bond ETFs won&#x;t move much in response to changes to interest rates, meaning they&#x;re relatively low risk. These ETFs can be a more attractive option than owning the bonds directly because the fund is highly liquid and more diversified than any individual bond.

Vanguard Short-Term Bond ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held ETFs in this category also include iShares Year Treasury Bond ETF (SHY) and Vanguard Short-Term Treasury ETF (VGSH).

Total bond market ETFs

Vanguard Total Bond Market ETF (BND)

This kind of bond ETF gives investors exposure to a wide selection of bonds, diversified by type, issuer, maturity and region. A total bond market ETF provides a way to gain broad bond exposure without going too heavy in one direction, making it a way to diversify a stock-heavy portfolio.

Vanguard Total Bond Market ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held ETFs also include iShares Core U.S. Aggregate Bond ETF (AGG) and Vanguard Total International Bond ETF (BNDX).

Municipal bond ETFs

iShares National Muni Bond ETF (MUB)

This kind of bond ETF gives exposure to bonds issued by states and cities, and interest on these bonds is typically tax-free, though it&#x;s lower than that paid by other issuers. Muni bonds have traditionally been one of the safest areas of the bond market, though if you own out-of-state munis in a fund, you will lose the tax benefits in your home state, though not at the federal level. Given the tax advantages, it is advantageous to consider a municipal bond ETF that invests in your state of residence.

iShares National Muni Bond ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held ETFs also include Vanguard Tax-Exempt Bond ETF (VTEB) and iShares Short-Term National Muni Bond ETF (SUB).

Top balanced ETFs

iShares Core Aggressive Allocation ETF (AOA)

A balanced ETF owns both stock and bonds, and it targets a certain exposure to stock, which is often reflected in its name. These funds allow investors to have the long-term returns of stocks while reducing some of the risk with bonds, which tend to be more stable. A balanced ETF may be more suitable for long-term investors  who may be a bit more conservative but need growth in their portfolio.

iShares Core Aggressive Allocation ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held balanced ETFs also include iShares Core Growth Allocation ETF (AOR) and iShares Core Moderate Allocation ETF (AOM).

Top commodity ETFs

SPDR Gold Shares (GLD)

A commodity ETF gives investors a way to own specific commodities, including agricultural goods, oil, precious metals and others without having to transact in the futures markets. The ETF may own the commodity directly or via futures contracts. Commodities tend to be quite volatile, so they may not be well-suited for all investors. However, these ETFs may allow more advanced investors to diversify their holdings, hedge out exposure to a given commodity in their other investments or make a directional bet on the price of a given commodity. The best-performing gold ETFs tend to offer highly effective portfolio diversification with added defensive stores of value.

SPDR Gold Shares ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held commodities ETFs also include iShares Silver Trust (SLV), United States Oil Fund LP (USO) and Invesco DB Agriculture Fund (DBA).

Top currency ETFs

Invesco DB US Dollar Index Bullish Fund (UUP)

A currency ETF gives investors exposure to a specific currency by simply buying an ETF rather than accessing the foreign exchange (forex) markets. Investors can gain access to some of the world&#x;s most widely traded currencies, including the U.S. Dollar, the Euro, the British Pound, the Swiss Franc, the Japanese Yen and more. These ETFs are more suitable for advanced investors who may be seeking a way to hedge out exposure to a specific currency in their other investments or to simply make a directional bet on the value of a currency.

Invesco DB US Dollar Index Bullish Fund Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held currency ETFs also include Invesco CurrencyShares Euro Trust (FXE) and Invesco CurrencyShares Swiss Franc Trust (FXF).

Top real estate ETFs (REIT ETFs)

Vanguard Real Estate ETF (VNQ)

Real estate ETFs usually focus on holding stocks classified as REITs, or real estate investment trusts. REITs are a convenient way to own an interest in companies that own and manage real estate, and REITs operate in many sectors of the market, including residential, commercial, industrial, lodging, cell towers, medical buildings and more. REITs typically pay out substantial dividends, which are then passed on to the holders of the ETF. These payouts make REITs and REIT ETFs particularly popular among those who need income, especially retirees. The best ETF REITs maximize dividend yields, as dividends are the main reason for investing in them.

Vanguard Real Estate ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held real estate ETFs also include iShare U.S. Real Estate ETF (IYR) and Schwab U.S. REIT ETF (SCHH).

Top volatility ETFs

iPath Series B S&P VIX Short-Term Futures (VXX)

ETFs even allow investors to bet on the volatility of the stock market through what are called volatility ETFs. Volatility is measured by the CBOE Volatility Index, commonly known as the VIX. Volatility usually rises when the market is falling and investors become uneasy, so a volatility ETF can be a way to hedge your investment in the market, helping to protect it. Because of how they&#x;re structured, they&#x;re best-suited for traders looking for short-term moves in the market, not long-term investors looking to profit from a rise in volatility.

iPath Series B S&P VIX Short-Term Futures Performance:

  • performance: percent
  • Historical performance (annual over 3 years): percent
  • Expense ratio: percent

Some of the most widely held volatility ETFs also include the ProShares VIX Mid-Term Futures ETF (VIXM) and the ProShares Short VIX Short-Term Futures ETF (SVXY).

Top leveraged ETFs

ProShares UltraPro QQQ (TQQQ)

A leveraged ETF goes up in value more rapidly than the index it&#x;s tracking, and a leveraged ETF may target a gain that&#x;s two or even three times higher than the daily return on its index. For example, a triple leveraged ETF based on the S&P should rise 3 percent on a day the index rises 1 percent. A double leveraged ETF would target a double return. Because of how leveraged ETFs are structured, they&#x;re best-suited for traders looking for short-term returns on the target index over a few days, rather than long-term investors.

ProShares UltraPro QQQ ETF Performance:

  • performance: percent
  • Historical performance (annual over 5 years): percent
  • Expense ratio: percent

Some of the most widely held leveraged ETFs also include ProShares Ultra QQQ (QLD), Direxion Daily Semiconductor Bull 3x Shares (SOXL) and ProShares Ultra S&P (SSO).

Top inverse ETFs

ProShares Short S&P ETF (SH)

Inverse ETFs go up in value when the market declines, and they allow investors to buy one fund that inversely tracks a specific index such as the S&P or Nasdaq These ETFs may target the exact inverse performance of the index, or they may try to offer two or three times the performance, like a leveraged ETF. For example, if the S&P fell 2 percent in a day, a triple inverse should rise about 6 percent that day. Because of how they&#x;re structured, inverse ETFs are best-suited for traders looking to capitalize on short-term declines in an index.

ProShares Short S&P ETF Performance:

Sours: https://www.bankrate.com/investing/best-etfs/
Top 5 Vanguard ETFs to Buy and Hold (2021)

The 21 Best ETFs to Buy for a Prosperous

It would seem a fool's errand to predict the best exchange-traded funds (ETFs) for After all, reminded us just how unpredictable the market can be.

Fortunately, that's not what this annual feature has ever been about.

The best ETFs for , just like in previous years, do include optimistic funds designed to take advantage of various trends Wall Street's brightest minds expect to lead in the year ahead.

However, the market doesn't care about our arbitrary calendar dates. And as proved, things don't always go according to plan anyway. Thus, our annual list also includes a few go-anywhere ETFs to hold through the entire year, and even a couple defensive funds you might only tap when it looks like trouble is en route.

We're proud of our list. The full 20 funds delivered a total return (price plus dividends) of %, more than a percentage point better than the S&P 's %. The equity portion did far better, averaging % gains to trounce the broader market.

So what does have in store? Goldman Sachs, which assumes the S&P will close at 3,, thinks there's another 16% upside next year thanks in part to a massive 29% rebound in earnings. Under the same assumption, Piper Sandler's year-end price objective of 4, would represent a 14% gain for the S&P And in Kiplinger's investing outlook, Executive Editor Anne Kates Smith says returns will be "more along the lines of high-single-digit to low-double-digit percentages."

No one expects the market to climb in a straight line. The beginning of could see volatility because of large-scale COVID outbreaks. Broadly speaking, though, most analysts believe widespread vaccinations will gradually boost both the economy and stocks. Cyclical and value-oriented sectors are expected to be the greatest beneficiaries.

Here are the 21 best ETFs to buy for This is an intentionally wide selection of ETFs that meet a number of different objectives. We don't suggest investors go out and stash each and every one of these funds in their portfolios. Instead, read on and discover which well-built funds best match what you're trying to accomplish, from buy-and-hold plays to defensive stop-gaps to high-risk, high-reward shots.

Data is as of Dec. Yields represent the trailing month yield, which is a standard measure for equity funds.

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Vanguard S&P ETF

Blue poker chips
  • Type: Large-cap blend
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %, or $3 annually for every $10, invested

We start our list of 's best ETFs with a familiar face: The boring ol' Vanguard S&P ETF (VOO, $), which simply tracks the S&P Index of primarily U.S. blue-chip stocks. And we'll likely lead with it for years to come.

Here's why.

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In April , S&P Dow Jones Indices released its annual report on actively managed funds and their performance against their benchmarks. And yet again, it wasn't pretty:

"Large-cap funds made it a clean sweep for the decade – for the 10th consecutive one-year period, the majority (71%) underperformed the S&P Their consistency in failing to outperform when the Fed was on hold (), raising interest rates (), and cutting rates () deserves special note, with 89% of large-cap funds underperforming the S&P over the past decade."

As Niles Crane might say: "It's not a fight; it's an execution!"

This is the performance of seasoned professionals who are paid, and paid well, to select stocks for their customers. So what can one reasonably expect from mom-'n'-pop investors who only have an hour or two each month to spend reviewing their investments? All things considered, merely matching the market is respectable.

The Vanguard S&P ETF does precisely that, giving you exposure to the companies within the mostly U.S.-headquartered companies trading on the major American stock exchanges. It's what many people have come to think of when they think of "the market," given its large and diverse array of components.

It is not, however, perfectly balanced. At writing, the SPY was more than a quarter invested in tech stocks such as Apple (AAPL) and Microsoft (MSFT), but had only a 2% "weight" (the percentage of assets invested in a stock) in energy firms such as Exxon Mobil (XOM) and Chevron (CVX).

Also, the S&P is market-cap weighted. That means the larger the stock, the more assets the VOO invests in that stock, and thus the more influence the stock has over performance. This could be a risk if investors "rotate" out of heavily weighted standouts such as Apple, Microsoft, Amazon.com (AMZN) and, as of Dec. 21, Tesla (TSLA), and into stocks with less influence on (or outside of) the S&P

But, like every year, what lies ahead is unknown. What is known is that investors typically are well-served by having cheap, efficient exposure to the broader U.S. stock market. And that's why VOO belongs among our best ETFs to buy for

Learn more about VOO at the Vanguard provider site.

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iShares ESG Aware MSCI USA ETF

A large windmill against the backdrop of a farm
  • Type: Large-cap blend (ESG criteria)
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

One of the most prominent trends of the past few years has been a shift toward prioritizing environmental, social and corporate governance, or ESG, criteria. Investors who are concerned about everything from sustainable practices to minority representation in company boardrooms are demanding changes.

And corporate America is increasingly finding that it pays to listen.

"The reasons for the robust performance of ESG funds can vary and need to be evaluated on a case-by-case basis," says SSGA Carlo M. Funk, EMEA Head of ESG Investment Strategy for State Street Global Advisors. "In aggregate, however, the extraordinary year of supports our main view: Companies with superior corporate governance and better environmental and social practices than their peers display greater resilience and preserve long-term value more effectively during times of market stress."

Investors are speaking with their assets, too, and loudly. Todd Rosenbluth, Head of ETF & Mutual Fund Research for CFRA, says that "net inflows to broad ESG ETFs, which focus on environmental, social and governance metrics, more than tripled in the first 11 months of relative to "

Leading the way has been the iShares ESG Aware MSCI USA ETF (ESGU, $), which saw $ billion in inflows during that time.

ESGU tracks the MSCI USA Extended ESG Focus Index, which is comprised of large- and mid-cap stocks that MSCI has determined possess positive ESG characteristics. The index also excludes firms such as weapons manufacturers and tobacco companies, as well as those "involved in very severe business controversies."

This diversified group of more than companies can act as a core large-cap holding. It has been a fruitful one, too – ESGU has outperformed the aforementioned VOO, % to %, on a total return basis (price plus dividends) through the lion's share of And it should be one of the best ETFs for if you're looking for bedrock ESG exposure.

Just note that like VOO, ESGU isn't perfectly balanced, either – nearly 30% of the fund's holdings are invested in technology, and it has less than 3% exposure each in four different sectors. Also, the idea of what's ethically palatable varies from person to person, so you might not agree with ESGU's criteria. So if ESGU isn't for you, consider these other ESG funds instead.

Learn more about ESGU at the iShares provider site.

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Vanguard Value ETF

Sale banner
  • Type: Large-cap value
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

Starting in the late s, value investing spent a good eight decades beating the pants off of growth investing. That feels like forever ago, however. Because ever since the Great Recession, growth – led largely by technology and tech-related names – has left value in its dust.

Most years, you'll hear a few predictions that "value is due," but those cries have grown louder and wider as the economy tries to pick itself up out of recession. In fact, value is en vogue as analysts look ahead to

"We believe that value stocks may be poised to benefit from an accelerating economy before returning to the 'old normal' of structurally impaired economic growth," write Invesco strategists Brian Levitt and Talley Léger. Vanguard agrees, noting that "parts of the U.S. equity market, including value-oriented sectors, are projected to have somewhat higher returns after an extended period of significant underperformance."

Dipping into individual stocks could be perilous however, as BlackRock analysts say that while value could indeed run ahead in , "we believe any of the companies … face structural challenges that have been exacerbated by the pandemic.

One way to prevent having a single value pick blow up in your face is by investing across the style via funds such as Vanguard Value ETF (VTV, $). This inexpensive index fund holds roughly U.S. large- and mid-cap stocks that look attractive based on value metrics including price-to-earnings (P/E), forward P/E, price-to-book, price-to-sales and price-to-dividend.

VTV ranks among the best ETFs for given its fees, simplicity and exposure to a potential hotbed for returns in the year to come. This Morningstar Gold-rated fund "is one of the cheapest large-value funds available, an excellent, low-turnover strategy that accurately represents the opportunity set available to its peers," according to Morningstar Director Alex Bryan.

The VTV is filled with old-guard blue chips such as Johnson & Johnson (JNJ) and Procter & Gamble (PG), not to mention Berkshire Hathaway (BRK.B), helmed by Warren Buffett, who knows a thing or two about value himself. It also yields well more than the market at the moment, making it appropriate for income-minded investors who feel like hanging on to it long after comes to a close.

Learn more about VTV at the Vanguard provider site.

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Distillate U.S. Fundamental Stability & Value ETF

15% off sale sign
  • Type: Large-cap value
  • Assets under management: $ million
  • Dividend yield: %
  • Expenses: %

Value is in the eye of the beholder. What one investor might view as a value, another might merely see as cheap.

Enter the Distillate U.S. Fundamental Stability & Value ETF (DSTL, $), which remains among our best ETFs for the third consecutive year.

DSTL doesn't rely on P/E, P/S, nor a number of other more traditional value metrics. Instead, the ETF focuses on free cash flow (the cash profits left over after a company does any capital spending necessary to maintain the business) divided by its enterprise value (another way to measure a company's size that starts with market capitalization, then factors in debt owed and cash on hand).

This "free cash flow yield" is much more reliable than valuations based on earnings, says Thomas Cole, CEO and co-founder of Distillate Capital. That's because companies report different types of financial results – ones that comply with generally accepted accounting principles (GAAP), sure, but increasingly, ones that don't, too.

Distillate U.S. Fundamental Stability & Value ETF starts out with of the largest U.S. companies, then weeds out ones that are expensive based on its definition of value, as well as those with high debt and/or volatile cash flows.

The result, at the moment, is a portfolio that's heavy on tech stocks (25%), though leaner than the 32% it sported at this time last year. Industrials (19%) and health care (19%) also account for large chunks of assets. Cole, in a quarterly update to investors, writes that after its most recent rebalancing, the strategy "has significantly more stable long-term fundamentals and less financial leverage than the S&P Index, which we believe will continue to be important attributes amid ongoing near-term economic pressures."

The proof is in the pudding, so they say, and investors in DSTL have enjoyed every spoonful. This young fund, launched on Oct. 23, , has returned % since then – not just outperforming the three largest value-style ETFs by an average of 30 percentage points, but beating the S&P by a solid 10 points. 

"We think value works," Cole says. "We don't think it ever really stopped working."

Learn more about DSTL at the Distillate Capital provider site.

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Schwab US Small-Cap ETF

An ant lifting barbell weights
  • Type: Small-cap blend
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

Sam Stovall, Chief Investment Strategist at CFRA, points out that since , when the small-cap benchmark Russell was created, it has put up % returns on average during the first year of the four-year presidential cycle.

That's more of a fun fact than anything prescriptive, but there are plenty more tangible reasons to believe small caps will extend their recovery well into

"Small caps generally outperform large caps when the economy is recovering and a new credit cycle is emerging," say Invesco analysts. "High-yield corporate bond spread tightening is helped by abundant central bank liquidity, a gradual economic recovery, rebounding corporate profits, improving credit conditions and ebbing volatility.

"That should sound familiar because those are the tailwinds currently behind small-cap stocks."

The Schwab US Small-Cap ETF (SCHA, $) is a simple, effective and extremely diversified way to invest across small caps. The portfolio of more than 1, stocks isn't a pure small-cap fund – less than half are in the mid-cap space. But importantly, these stocks are all much more heavily tethered to the domestic economy, so if the U.S. is in for a rebound, SCHA should be one of the best ETFs to leverage it.

Top holdings such as Novocure (NVCR), Caesars Entertainment (CZR) and Cloudflare (NET) each make up only about % of the fund's weight, so it's clear that no single stock is going to tank this portfolio. But SCHA does lean more heavily toward some sectors than others – healthcare (%), industrials (%) and financials (%) are tops at the moment. So investors will enjoy significant exposure to some of the upcoming year's best rotation plays.

Best of all, Schwab's small-cap fund is as cheap as it gets. Morningstar data shows SCHA as the lowest-cost small-cap stock fund on the market at just four basis points, which comes out to all of $4 annually for every $10, invested.

Learn more about SCHA at the Schwab provider site.

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Industrial Select Sector SPDR Fund

A man working in a manufacturing plant
  • Type: Sector (Industrials)
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

Industrial stocks' sensitivity to both the U.S. and global economies made them one of the hardest hit S&P sectors during the bear market, off 40% through the March 23 bottom versus 31% for the wider index.

It has come roaring back since then, however, and it's currently en vogue as one of analysts' favorite turnaround picks for

"We are upgrading Industrials from a Neutral to Overweight rating," says Piper Sandler Technical Market Strategist Craig Johnson. "The sector continues to report impressive (relative strength) and offers leverage to the reopening theme." Goldman Sachs notes that industrial stocks have the highest consensus earnings growth-rate estimates for any sector, with the pros modeling a 79% snap-back in

There aren't a ton of broad-sector options. But the Industrial Select Sector SPDR Fund (XLI, $), the largest among industrial ETFs, does the trick nicely.

The XLI holds the 73 industrial-sector stocks in the S&P Naturally, that skews toward large caps in the first place, and since the fund is market cap-weighted, the biggest stocks command the biggest weights. But top holding Honeywell (HON), the diversified industrial recently elevated to the Dow Jones Industrial Average, accounts for just % of assets – a meaningful weight, but not a worrisome one. Railroad operator Union Pacific (UNP, %) and aircraft manufacturer Boeing (BA, %) are next largest after that.

Zooming out a little bit, you're getting heavy exposure to aerospace and defense (%), machinery (%) and industrial conglomerates (%) – all likely beneficiaries as the global economy gets back into gear. You're also getting decent-sized chunks in road and rail (%), air freight (%) and electrical equipment (%).

Learn more about XLI at the SPDR provider site.

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Invesco WilderHill Clean Energy ETF

Solar panels
  • Type: Thematic (Clean energy)
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

The Invesco WilderHill Clean Energy ETF (PBW, $) is a Kip ETF 20 fund that did extremely well for itself in This fund, which invests in 46 green energy stocks – things such as solar-energy firms, lithium miners and electric-vehicle makers – has returned % through mid-December , making it one of the top five equity ETFs on the market.

Depending on how the political dominoes fall, PBW should at least be productive again in , if not finish as one of the year's best ETFs yet again.

"Green energy and electric vehicles were one of the centerpieces of presumptive President-Elect Biden's campaign platform, as he has proposed new tax incentives, government purchases, and other measures to benefit EVs," says CFRA analyst Garrett Nelson.

Just how green-friendly the administration is pivots somewhat on just how accommodative Congress is, so the Georgia runoffs will be an important part of that. But even with a split Congress, green energy could still be in store for a big year.

"There is some expectation a Biden administration will be supportive of renewable energy within the federal scope," says Mary Jane McQuillen, Head of Environment, Social and Governance Investment at ClearBridge Investments. "This appears likely although it is not an essential part of our investment case there, which rests mainly on much larger state and corporate commitments."

Invesco WilderHill Clean Energy ETF provides investors with exposure to this burgeoning trend through mostly mid- and small-cap stocks with oodles of growth potential. Top holdings at the moment include FuelCell Energy (FCEL), Blink Charging (BLNK) and Nio (NIO).

Learn more about PBW at the Invesco provider site.

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John Hancock Multifactor Consumer Discretionary ETF

A shopper holding numerous shopping bags
  • Type: Sector (Consumer cyclical)
  • Assets under management: $ million
  • Dividend yield: %
  • Expenses: %

Vaccination is the key to unlocking many consumer discretionary stocks.

As Americans get vaccinated, they'll be increasingly able to go out and spend on things they haven't been able to over the past year: dining out, going to movies, traveling. That in turn should help employment in those battered industries, and those new workers will be able to ramp up their spending once again, too.

Goldman Sachs sees consumer discretionary earnings rebounding by a sharp 63% in "Improving fundamentals continue to support our favorable view on the Consumer Discretionary and Communications Services sectors," add Wells Fargo Investment Institute analysts Ken Johnson and Krishna Gandikota.

But how you select a consumer discretionary ETF largely has to do with how good of a year you think Amazon.com will have in the year ahead. That's because many sector funds, including the two largest – the Consumer Discretionary Select Sector SPDR Fund (XLY) and the Vanguard Consumer Discretionary ETF (VCR) – have more than 20% of their assets invested in the online retail stock because they're weighted by market cap and Amazon is a behemoth.

Those ETFs have benefited from Amazon's nearly 70% gain through most of spurred by COVID boosts to multiple parts of its business. But similarly, they could suffer if the e-tail giant cools off.

If you're looking for something with a little more balance, consider the John Hancock Multifactor Consumer Discretionary ETF (JHMC, $). The fund tracks a multifactor index that emphasizes "factors (smaller cap, lower relative price, and higher profitability) that academic research has linked to higher expected returns."

You'll still own Amazon – you'll just own less of it. Amazon.com, at % in assets, isn't even the biggest position in the stock portfolio. Tesla is, at %. You'll also hold the likes of Home Depot (HD), McDonald's (MCD) and Booking Holdings (BKNG). The largest industry positions in this are in specialty retail (%) and hotels, restaurants and leisure (%).

That latter industry is a popular bet among investors looking for big deep-value rebounds; sadly, there are no pure-play funds investing in the space. Your best available bet is the Invesco Dynamic Leisure and Entertainment ETF (PEJ), with about 45% of assets dedicated to hotels, restaurants and leisure. Another "honorable mention" travel-recovery play? The ETFMG Travel Tech ETF (AWAY), which invests in travel bookings, reservation, price comparison and advice stocks, as well as ride sharing and hailing companies.

Learn more about JHMC at the John Hancock provider site.

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Roundhill Sports Betting & iGaming ETF

Betting tickets and cash
  • Type: Thematic (Gambling)
  • Assets under management: $ million
  • Dividend yield: N/A
  • Expenses: %

Sports weren't immune to the COVID threat. MLB stumbled through a significantly shortened season. The NBA and NHL finished out their seasons in "bubbles." The NFL has had to shuffle its schedule because of coronavirus outbreaks. Major League Soccer's Columbus Crew just won the MLS Cup with two star players out due to COVID.

Not to mention, the NCAA lost the basketball championships, college football has been littered with cancelations, and numerous other collegiate sports were impacted.

Despite this pockmarked landscape, sports betting revenues are on pace to finish above $ billion – a %-plus explosion from roughly $ million in And things look even better for the industry heading into , making the Roundhill Sports Betting & iGaming ETF (BETZ, $), up 52% in , a likely contender to be among next year's best ETFs as well.

"If all goes to plan in regards to vaccine rollout, it won't be normal in the sense that the calendars are funky, with the NBA kicking off preseason right now, but it should be a full year of sports if all goes to plan," says Will Hershey, co-founder and CEO of RoundHill Investments.

That will allow the industry to keep building upon a growing base of states that are legalizing sports betting. New Jersey, which OK'd sports gambling in June , recently achieved yet another monthly record of nearly a billion dollars wagered in November.

"States are looking at the kind of tax revenues New Jersey has been able to bring in both through online sports betting and online casinos," he says, adding that COVID seems to be accelerating states' consideration of this benefit. Three more states (Louisiana, South Dakota and Maryland) approved sports-betting measures in this latest election cycle.

Several large states remain. Hershey believes one of them, New York, might try to allow online sports betting in a revenue bill in Q1 There's also potential in Canada, whose parliament recently introduced a bill to legalize single-match sports betting.

BETZ's roughly holding portfolio is more than just a play on the U.S., however. Almost half of assets are dedicated to U.K. and the rest of Europe, 40% is allocated to North American firms, and the rest is spread across Australasia and Japan.

Most investors will be familiar with popular U.S. names DraftKings (DKNG, %) and Penn National Gaming (PENN, %), which bought Barstool Sports in January But there are plenty of interesting international names as well.

BETZ holds Flutter Entertainment (PDYPY), an online betting conglomerate whose assets include Betfair, Paddy Power and PokerStars. It recently spent $ billion to increase its stake in online sportsbook market-leader FanDuel to 95%. There's also Sweden's Kambi Group, which Hershey refers to as a "picks-and-shovels" play on the industry; it provides technology and data to the likes of Penn National and Rush Street Interactive.

Learn more about BETZ at the RoundHill Investments provider site.

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Invesco KBW Bank ETF

A teller handing a customer several bills in numerous denominations
  • Type: Industry (Banks)
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

Jonathan Golub, Chief U.S. Equity Strategist at Credit Suisse, points out that the roadmap for banks in looks like previous recession recoveries: "improving credit conditions, increasing transaction volumes, and a steepening yield curve."

They look even better when you consider financials are one of the market's cheapest sectors, and that their earnings estimates are largely conservative, he adds.

Keefe, Bruyette & Woods analysts Frederick Cannon and Brian Kleinhanzl add a word of caution, noting that "regulatory constraints will increase." But they add that "we believe the early indications from President-elect Biden are for only moderately stricter regulations on the financial sector," and that "financial stocks are well poised for outperformance."

The Invesco KBW Bank ETF (KBWB, $) is one of the best ETFs you can buy for a rebound specifically in the banking industry. Unlike broader financial-sector funds that hold not just banks, but investment firms, insurers and other companies, KBWB is a straightforward ETF that's almost entirely invested in banking firms.

Why just banks? Because you can play the rebound at cheaper prices and at higher yields to boot.

KBWB not a particularly diverse banking ETF, concentrated in just two dozen companies. That includes major money-center banks such as U.S. Bancorp (USB) and JPMorgan (JPM), as well as super-regionals such as SVB Financial Corp (SIVB) and Fifth Third Bancorp (FITB).

Meanwhile, Invesco KBW Bank ETF is cheaper in several metrics than financial-sector funds such as the Financial Select Sector SPDR Fund (XLF), and it currently offers more than a percentage point in additional yield.

Learn more about KBWB at the Invesco provider site.

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Global X FinTech ETF

A person using contactless pay at a store
  • Type: Thematic (Financial technology)
  • Assets under management: $ million
  • Dividend yield: %
  • Expenses: %

If investors are rotating into certain sectors, naturally they have to get the assets from somewhere. already showed signs of investors taking profits in many of the year's highfliers, and that's expected to continue in

That would sound like trouble for the Global X FinTech ETF (FINX, $) – a collection of financial-technology companies whose digital solutions were highly sought after during the pandemic, helping FINX climb 46% through mid-December

But several analysts think that, unlike other growing industries that enjoyed a COVID boost, financial technology might not take a breather before continuing higher.

William Blair analysts say "digital banking technology adoption has accelerated and we expect growth of adoption of digital banking technology to remain strong or even accelerate in " They add that they expect accelerated investment in business-to-business electronic payments in (and for the next several years), and they also expect initial public offering (IPO) and mergers-and-acquisitions (M&A) activity "to be robust in "

KBW's Cannon and Kleinhanzl agree. "We expect an acceleration of IPOs of FinTech firms, increases in bank and insurance company purchases of FinTech technologies, and consumers' continued shift to virtual financial service delivery," they write in their outlook

Global X's FINX, then, could be one of the best ETFs to buy for after shining in

This fintech ETF has a tight company portfolio that boasts a few names you know, such as Square (SQ), PayPal (PYPL) and TurboTax maker Intuit (INTU). But it's also geographically diversified, with international companies making up more than 40% of assets. That gives you access to the likes of Dutch payment firm Adyen (ADYEY) and Brazil's StoneCo (STNE), a Warren Buffett stock that took off by 88% in

Learn more about FINX at the Global X provider site.

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ARK Innovation ETF

Concept technology art
  • Type: Thematic (Innovative technologies)
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

It's fair to say that was the year of Cathie Wood.

Wood, the founder, Chief Executive Officer and Chief Investment Officer of ARK Invest, manages the portfolios of five separate innovation-themed funds that sit atop the 25 best-performing equity ETFs of , based on Morningstar data through Dec.

  • ARK Genomic Revolution ETF (ARKG, No. 1)
  • ARK Next Generation Internet ETF (ARKW, No. 4)
  • ARK Fintech Innovation ETF (ARKF, No. 16)
  • ARK Autonomous Technology & Robotics ETF (ARKQ, No. 22)
  • And then there's the ARK Innovation ETF (ARKK, $), a blending of those four strategies, which comes in at No. 6.

That performance helped ARKK become "the most popular active ETF in ," according to CFRA's Rosenbluth, who points out that the fund "pulled in $ billion year-to-date through November, making it the 18th most popular U.S. listed ETF." It also was named the ETF of the Year by ETF.com in April

While COVID certainly played to her investments' strengths, make no mistake: The ARK funds have outperformed just about every comparable rival, showing why it sometimes pays to shell out a few more basis points in expenses for active management.

All of Wood's ETFs are based on "disruptive innovation … the introduction of a technologically enabled new product or service that potentially changes the way the world works." Consider ARKK something of a "best ideas" list from the disruptive innovators across ARK's four main themes: genomics, industrial innovation, next-gen internet and financial technology.

ARKK typically holds 35 to 55 stocks. Top holdings at the moment include a nearly 10% stake in Tesla, which Wood famously predicted in would hit $4, before upping that target to $6, earlier this year. That's followed by streaming device-maker Roku (ROKU, %) and genetic-testing expert Invitae (NVTA, %).

Those holdings could change in a hurry. The actively managed ARKK has a reported turnover rate of 80%, meaning the entire portfolio is cycled out once every 14 to 15 months on average.

Learn more about ARKK at the ARK Invest provider site.

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Renaissance IPO ETF

A chalkboard with IPO written on it
  • Type: Thematic (Initial public offerings)
  • Assets under management: $ million
  • Dividend yield: %
  • Expenses: %

Another area of the market that was battered during the market was initial public offerings (IPOs). Naturally, if investors were pulling their money out of well-established stocks, they certainly weren't going to bite on brand-new offerings of primarily newer, less-tested firms.

But IPOs have roared back. More than offerings have priced in through mid-December, up % versus last year, according to Renaissance Capital. Proceeds raised have hit $ billion, up %.

Those include recent deals for the likes of Airbnb (ABNB) and DoorDash (DASH), which blew away expectations and showed a ravishing hunger for new deals. Good news there: Plenty more IPOs are on the horizon for

The success of initial public offerings in helped the Renaissance IPO ETF (IPO, $) more than double through mid-December, and continued investor eagerness to hop onto "the next big thing" could make it one of the best ETFs for

The Renaissance IPO ETF tracks the Renaissance IPO Index, which adds large new companies quickly after launch, then adds other recent offerings every quarter as their reviews permit. Once a company has been public for more than two years, it's removed during the next quarterly review.

Top holdings are a who's who of successful companies in , including Zoom Video (ZM) at % of holdings, Moderna (MRNA, %) and Slack Technologies (WORK, %), which recently announced it would be bought out by Salesforce.com (CRM).

Initial public offerings can be difficult investments for investors with a quick trigger finger because of their often erratic trading shortly after they've gone public. Kiplinger contributor Tom Taulli, author of High-Profit IPO Strategies, even suggests waiting 30 days for hype to subside before buying individual IPOs. Investing in the IPO ETF can help you resist that urge while also making sure you're exposed to a diversified bundle of these exciting new stocks.

Learn more about IPO at the Renaissance Capital provider site.

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iShares Evolved U.S. Healthcare Staples ETF

Medicine is poured into vials
  • Type: Sector (Healthcare)
  • Assets under management: $ million
  • Dividend yield: %
  • Expenses: %

The phrase "you can have your cake and eat it too" certainly wasn't coined with the healthcare sector in mind, but it's certainly applicable. Healthcare funds effectively provide the best of both worlds, able to deliver growth during economic expansion, but also able to act defensively when the economy isn't running full steam ahead.

Counterintuitively, the current recession has been rough on the sector.

While healthcare was certainly in the spotlight given that our economic woes were health-related, much of the sector was actually harmed by the outbreak, not helped. A few Big Pharma, biotech and diagnostics companies were able to leverage the COVID outbreak, but for many, restricted hospitals, canceled surgeries, lost health insurance coverage and a general avoidance of non-essential healthcare hit much of the sector hard. In fact, the sector still lags the broader market through this late hour in

But it's getting plenty of looks heading into Credit Suisse says "Health Care should outperform given a more robust earnings trend." Policy uncertainty has also helped healthcare stocks trade at a "relative valuation discount" to the S&P , says Goldman Sachs.

"A divided U.S. government may benefit large-cap tech and healthcare as it likely takes corporate tax increases and big legislative changes off the table," adds BlackRock.

One of the best ETFs for , then, is the iShares Evolved U.S. Healthcare Staples ETF (IEHS, $). You can learn more about how the Evolved sector ETFs work here, but in short, big data analysis is used to look at how companies actually describe themselves, and companies are placed in sectors based on that data. Evolved sectors sometimes look similar to traditional sectors … and they sometimes have significant differences.

What makes IEHS stand apart is a roughly 75% weight in health care equipment (such as medical devices) and services (such as insurance). Compare that to about 45% in the Health Care Select Sector SPDR Fund (XLV).

The top holding is UnitedHealth (UNH), which you'll find atop many healthcare-sector ETFs given its size. Large weights are also given to the likes of Abbott Laboratories (ABT, %), which just increased its dividend by a whopping 25%; medical device maker Medtronic (MDT, %) and consumer-facing healthcare firm Johnson & Johnson (%).

IEHS outperformed the healthcare sector in Given its positioning in healthcare industries poised for better things in , it maintains a place among our best ETFs for another year.

Learn more about IEHS at the iShares provider site.

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AdvisorShares Pure US Cannabis ETF

A shot from below of cannabis plants against a sunny blue sky
  • Type: Industry (Cannabis)
  • Assets under management: $ million
  • Dividend yield: N/A
  • Expenses: %

Marijuana stocks not only recovered along with the rest of the market this summer – they then enjoyed a rousing rally as the presidential elections came into focus. That's because a win for Joe Biden, whose administration has pledged to decriminalize marijuana and is generally seen as friendlier toward cannabis than another Republican administration, was viewed as a big win for weed.

Shortly thereafter, the House of Representatives passed the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act – legislation that would remove cannabis from the Controlled Substances Act (CSA) and expunge prior cannabis convictions for non-violent offenses, among other things. While it's unlikely to pass the Senate, it's still considered a material step forward.

"Although we don't expect full legalization of cannabis at the federal level any time soon, we believe Friday's vote in Congress represents yet another positive indicator that the overall sentiment towards cannabis acceptance continues to trend in the right direction," says Canaccord Genuity cannabis analyst Bobby Burleson.

"Independent of the Congress and the Senate, cannabis reforms continue to accelerate at the state level – most recently with Arizona and New Jersey voting in favor of legalizing adult-use programs – while many anticipate states such as New York, Pennsylvania and Connecticut to approve recreational cannabis as early as next year."

The AdvisorShares Pure US Cannabis ETF (MSOS, $) is a brand-spanking-new way to play the space, and it might be the best one for the moment. Unlike many other funds that focus heavily on international marijuana firms (specifically Canada), MSOS is the first pure-play U.S. cannabis ETF.

While index funds are a great idea for many industries and sectors, active management seems a wise choice given the still-Wild West nature of the industry and the constant regulatory changes these firms need to navigate. Providing that guidance is portfolio manager Dan Ahrens, Chief Operating Officer of AdvisorShares Investments. He also manages MSOS's sister fund, AdvisorShares Pure Cannabis ETF (YOLO).

The Pure US Cannabis ETF, which came to life on Sept. 1, , and has already collected more than $ million in assets, is a tight grouping of just 25 components. More than half the fund is dedicated to multi-state operators (MSOs, hence the ticker) that frequently sport cultivation, processing and retail facilities. It also deals in cannabidiol (CBD) companies, real estate investment trusts (REITs), suppliers, biotech firms and other connected industries.

Expenses of % are hardly cheap, but they're certainly reasonable considering you're getting management expertise in a budding industry.

Learn more about MSOS at the AdvisorShares provider site.

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WisdomTree Emerging Markets ex-State-Owned Enterprises Fund

Taipei, Taiwan
  • Type: Emerging markets
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

This year's list of the best ETFs for is notably light on full-blown international exposure. That's in part because there are so many segments of the U.S. stock market that are showing promise, and in part because there's not a strong analyst consensus around many other areas of the world.

But emerging markets (EMs) do stand out as a potential source of growth.

"We expect emerging market economies to lead the global economic rebound in ," says LPL Financial Chief Market Strategist Ryan Detrick, whose firm adds that "a potentially weaker U.S. dollar and less contentious global trade environment may support emerging markets, notably China."

BlackRock strategists "like EM equities, especially Asia ex-Japan." And SSGA Chief Portfolio Strategist Guarav Mallik says that "we expect earnings growth in China to be especially resilient … digitization and consumption trends will warrant a reconsideration of EM equity exposures in general."

The WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (XSOE, $) provides the right kind of coverage for this scenario. While this is a broad emerging-markets fund that has some exposure to the likes of Mexico, Chile and Poland, it's primarily tilted toward Asian EMs, especially China.

China makes up more than a third of the fund's weight, including top-two holdings Alibaba Group (BABA, %) and Tencent Holdings (TCEHY, %). But it also has large positions in South Korean (%), Taiwan (%) and India (%), as well as smaller holdings across other Asian nations, including Malaysia, Indonesia and the Philippines.

But what makes XSOE really stand out is its exclusion of companies that have 20% or more government ownership.

"State-owned enterprises (SOEs) typically have an inherent conflict of interest as they often look to (or are forced to) promote the government's objectives at the expense of creating value for other shareholders," writes Alejandro Saltiel, Associate Director of Modern Alpha at WisdomTree. "This is often referred to as a 'national service' requirement of SOEs."

Learn more about XSOE at the WisdomTree provider site.

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VanEck Vectors J.P. Morgan EM Local Currency Bond ETF

Sao Paulo, Brazil
  • Type: Emerging markets local-currency bond
  • Assets under management: $ billion
  • SEC yield: %*
  • Expenses: %

It's not just equity strategists that are high on emerging markets in Bond investors also see opportunity in the debt of developing countries, too.

"In light of a potential bear market in the U.S. dollar, emerging market (EM) currencies are poised to outperform; local-currency EM debt presents a particularly appealing opportunity," writes Thomas Coleman, Global Head of Fixed Income Investment at State Street Global Advisors. "EM local-currency real yields are above long-term averages and remain attractive, particularly when compared with U.S. real yields, which have recently turned quite negative."

The VanEck Vectors J.P. Morgan EM Local Currency Bond ETF (EMLC, $) is one of a handful of bond funds that provides this particular type of exposure: that is, not just emerging-market debt, but EM debt priced in local currencies, which would benefit from a declining U.S. dollar.

EMLC holds more than sovereign-debt issues from roughly two dozen emerging markets including Brazil, Indonesia, Mexico and Thailand. The effective duration (a measure of risk) is years, which effectively means that for every one-percentage-point hike in interest rates, EMLC would be expected to lose %. Credit risk is something of a mixed bag. Encouragingly, more than 40% of the portfolio is investment-grade, and 17% is considered "junk." The wild card is the roughly 40% in "unrated" bonds – unrated debt is often assumed to be junk, but that doesn't necessarily mean it is.

It's a risk you have to take when in investing EMLC, but it's a risk you're well-compensated for. In a market where yields from stocks and bonds alike are laughable, this emerging-market bond fund yields more than 4%, making it the best ETF on this list for those looking for high income in  

* SEC yield reflects the interest earned after deducting fund expenses for the most recent day period and is a standard measure for bond and preferred-stock funds.

Learn more about EMLC at the VanEck provider site.

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Vanguard Tax-Exempt Bond ETF

Steamrollers helping to smooth out a new road
  • Type: Municipal bond
  • Assets under management: $ billion
  • SEC yield: %
  • Expenses: %

Municipal bonds are a potential opportunity in , but they're hardly a sure thing.

"The valuation at the upper-end of the credit spectrum heavily favors tax-exempt municipal bonds over corporates," says BCA Research. "Investors that can take advantage of the tax exemption should prefer munis over investment-grade corporates."

But given the damage to municipal governments' coffers during COVID, it seems very likely that their fate doesn't just rest on economic rejuvenation, but economic stimulus.

"If a plan includes funding for state and local governments, we would expect municipal bonds to benefit," write analysts at the Wells Fargo Investment Institute. "Municipal bonds saw a rotation out of favor as the COVID crisis worsened, so stimulus supporting local governments may represent an attractive opportunity to rotate back into them."

The Vanguard Tax-Exempt Bond ETF (VTEB, $), then, could be one of the best bond ETFs for – but that could be heavily impacted by whether local governments receive any sort of bailout.

Vanguard Tax-Exempt Bond ETF is a low-cost way to pile into a boatload of muni bonds – 4,, to be exact. This wide portfolio is almost entirely investment-grade, with more than three-quarters spread across the two highest grades (AAA and AA). Average duration is similar to EMLC at years.

The yield, at %, isn't much to look at, but it's at least a little more than it seems. Remember: That income is at the very least exempt from federal taxes, and depending on what state you live in, some of it might be exempt from state and local taxes, too. But even based on the federal break, that % comes out to a "tax-equivalent yield" of %, meaning that a regularly taxable fund would have to yield at least % to deliver % after taxes for you.

Learn more about VTEB at the Vanguard provider site.

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BlackRock Ultra Short-Term Bond ETF

Construction helmets
  • Type: Ultrashort bond
  • Assets under management: $ billion
  • SEC yield: %
  • Expenses: %

The BlackRock Ultra Short-Term Bond ETF (ICSH, $) isn't really about income – it's about protection.

When interest rates rise, investors will often sell their existing bonds with lower yields to buy the newer bonds with higher yield. The longer the maturity of the lower-yielding bond – and thus the longer an investor would be collecting interest on that bond – the more enticing the newer bonds look, and thus the higher the interest-rate risk to the old bonds.

But extremely short-term bonds don't have this issue, as even large changes in interest rates won't really change returns much. Add in a scenario like , where the Federal Reserve is expected to stay put, and it's very likely that short-term bonds will barely move – again.

Case in point? The BlackRock Ultra Short-Term Bond ETF. This fund holds various investment-grade fixed- and floating-rate bonds, as well as money-market instruments, with average maturities of less than a year. That results in a duration of just years, which means a whole percentage-point change in rates would only knock ICSH down by less than half a percent.

At its absolute worst in , ICSH lost about % of its value – a blip compared to what most stocks did. It recovered fast, too, and has even managed to eke out a 1%-plus gain through mid-December.

BlackRock Ultra Short-Term ETF won't make you rich – that's not the point. But in the event of an emergency, it could keep you from going broke. And its overall returns typically beat out the average money market fund, making it a strong option for parking your cash if you suspect a downturn is imminent.

Learn more about ICSH at the iShares provider site.

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GraniteShares Gold Trust

Gold bars
  • Type: Gold
  • Assets under management: $ billion
  • Dividend yield: N/A
  • Expenses: %

Another popular source of both portfolio diversification and safety is gold. Though most investors are going to have an easier and cheaper time buying it via exchange-traded funds rather than deal in the physical metal itself.

Gold, which is priced in U.S. dollars, usually is utilized as a hedge against inflation and against calamity in general. That latter point doesn't bode well for gold, given that experts broadly expect the global economic situation to improve in But analysts are nonetheless pointing to a productive for the commodity.

"The direction of the U.S. dollar typically determines whether commodities may be stronger, stable or weaker," say Invesco's Levitt and Léger. "History suggests that a softer currency is generally associated with firmer commodity prices, and we expect this time to be no exception. We expect ongoing Fed dovishness and continued efforts to maintain easy financial conditions to weaken the U.S. dollar and provide support to commodities."

"The dollar's precipitous decline, forecast to continue into , provides ample opportunity for gold to catch up as the world contends with the aftermath of the Fed's printed economy, falling real yields and rising inflation expectations," adds Will Rhind, CEO of fund provider GraniteShares.

Many gold ETFs are designed to do what Rhind's GraniteShares Gold Trust (BAR, $) does: provide exposure to gold prices via shares backed by real physical gold stored in its vaults.

But it doesn't get much cheaper than BAR. The ETF, whose shares each represent a tenth of an ounce of gold, costs less than established rivals such as the SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) – BAR is 56% and 30% cheaper, respectively. In fact, GraniteShares is largely to thank for helping to lower expenses in a category that long went unaffected by fund-provider fee wars.

That low cost allows investors to enjoy even more of gold's potential upside.

Learn more about BAR at the GraniteShares provider site.

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ProShares Short S&P ETF

The woman from the "distracted boyfriend" meme in a business suit giving a thumbs-down to the camera
  • Type: Inverse stock
  • Assets under management: $ billion
  • Dividend yield: %
  • Expenses: %

The ProShares Short S&P ETF (SH, $) is one of the few funds that have made our Best ETFs list for a third straight year. But how did it merit inclusion after its 23% losses in through mid-December?

Easy: It gained 35% through March

The point of this list is to make sure you're prepared for whatever the market sends your way. Long-term, it makes sense for most investors to stick with a buy-and-hold plan through thick and thin, collecting dividends along the way. If you hold high-quality stocks, they'll likely bounce back after any market downturn. But we're only human, and in market environments like what we saw in spring , you might feel pressured to cut bait.

If you're wrong, you're potentially sacrificing great cost bases, not to mention attractive "yields on cost" (the actual dividend yield you receive from your initial cost basis), on the stocks you've jettisoned.

One alternative is ProShares' SH – a tactical ETF for investors looking to hedge against stock-market downside. The fund provides the inverse daily return of the S&P In short, that means if the S&P declines by 1% on Monday, the SH will gain 1% (minus expenses, of course).

You don't buy and hold this fund forever. You simply invest a small percentage of your portfolio in it when your market outlook is grim, and by doing so, you offset some of the losses that your long holdings incur during a down market. The risk is that if you're wrong, and stocks go up, your portfolio gains won't be as robust.

Some investors who looked around in January and February and realized COVID could do to the U.S. what it was doing to China jumped into ProShares Short S&P ETF and were well-rewarded for their pessimism. From the market high in February through the March nadir, SH gained a little more than 42%. Even investors who only rode SH part of the way down secured some much-needed protection.

Many buy-and-hold investors will do just fine simply staying the course. But if you like to be a little more involved and want to fade potential downside in the future, SH is a simple, effective hedge.

Learn more about SH at the ProShares provider site.

Sours: https://www.kiplinger.com/investing/etfs//thebest-etfs-to-buy-for

Etf sector best for each

Best ETFs to buy in 2021

Exchange-traded funds (ETFs) allow investors to buy a collection of stocks or other assets in just one fund with (usually) low expenses, and they trade on an exchange like stocks. ETFs have become tremendously popular in the last decade and now hold trillions of dollars in assets. With literally thousands of ETFs to choose from, where does an investor start? And with the stock market rising furiously after an initial plunge as part of the coronavirus crisis, what are the best ETFs to buy? Below are some of the top ETFs by category, including some highly specialized funds.

Best ETFs for 2021

How to choose the right type of ETF for you

Equity ETFs

Bond ETFs

Balanced ETFs

Commodity ETFs

Currency ETFs

Real estate ETFs

Volatility ETFs

Leveraged ETFs

Inverse ETFs

Top Equity ETFs

Equity ETFs provide exposure to a portfolio of publicly traded stocks, and may be divided into several categories by where the stock is listed, the size of the company, whether it pays a dividend or what sector it’s in. So investors can find the kind of stock funds they want exposure to and buy only stocks that meet certain criteria.

Stock ETFs tend to be more volatile than other kinds of investments such as CDs or bonds, but they’re suitable for long-term investors looking to build wealth. Some of the most popular equity ETF sectors and their returns (as of July 26) include:

Top U.S. market-cap index ETFs

Vanguard S&P 500 ETF(VOO)

This kind of ETF gives investors broad exposure to publicly traded companies listed on American exchanges using a passive investment approach that tracks a major index such as the S&P 500 or Nasdaq 100.

Vanguard S&P 500 ETF Performance:

  • 2020 performance: 18.3 percent
  • Historical performance (annual over 5 years): 17.6 percent
  • Expense ratio: 0.03 percent

Some of the most widely held ETFs in this group also include SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV) and Invesco QQQ Trust (QQQ).

Top International ETFs

Vanguard FTSE Developed Markets ETF (VEA)

This kind of ETF can provide targeted exposure to international publicly traded companies broadly or by more specific geographic area, such as Asia, Europe or emerging markets. Investing in foreign companies introduces concerns such as currency risk and governance risks, since foreign countries may not offer the same protections for investors as the U.S. does.

Vanguard FTSE Developed Markets ETF Performance:

  • 2020 performance: 9.7 percent
  • Historical performance (annual over 5 years): 10.9 percent
  • Expense ratio: 0.05 percent

Some of the most widely held ETFs also include iShares Core MSCI EAFE ETF (IEFA), Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard Total International Stock ETF (VXUS).

Top Sector ETFs

Vanguard Information Technology ETF (VGT)

This kind of ETF gives investors a way to buy stock in specific industries, such as consumer staples, energy, financials, healthcare, technology and more. These ETFs are typically passive, meaning they track a specific preset index of stocks and simply mechanically follow the index.

Vanguard Information Technology ETF Performance:

  • 2020 performance: 46.0 percent
  • Historical performance (annual over 5 years): 31.5 percent
  • Expense ratio: 0.10 percent

Some of the most widely held ETFs also include Financial Select Sector SPDR Fund (XLF), Energy Select Sector SPDR Fund (XLE) and Industrial Select Sector SPDR Fund (XLI).

Dividend ETFs

Vanguard Dividend Appreciation ETF (VIG)

This kind of ETF gives investors a way to buy only stocks that pay a dividend. A dividend ETF is usually passively managed, meaning it mechanically tracks an index of dividend-paying firms. This kind of ETF is usually more stable than a total market ETF, and it may be attractive to those looking for investments that produce income, such as retirees.

The best dividend ETFs tends to offer higher returns and low cost.

Vanguard Dividend Appreciation ETF Performance:

  • 2020 performance: 15.4 percent
  • Historical performance (annual over 5 years): 15.4 percent
  • Expense ratio: 0.06 percent

Some of the most widely held ETFs here also include) Vanguard High Dividend Yield Index ETF (VYM) and Schwab U.S. Dividend Equity ETF (SCHD).

Top bond ETFs

A bond ETF provides exposure to a portfolio of bonds, which are often divided into sub-sectors depending on bond type, their issuer, maturity and other factors, allowing investors to buy exactly the kind of bonds they want. Bonds pay out interest on a schedule, and the ETF passes this income on to holders.

Bond ETFs can be an attractive holding for those needing the safety of regular income, such as retirees. Some of the most popular bond ETF sectors and their returns (as of July 26) include:

Long-term bond ETFs

iShares MBS ETF (MBB)

This kind of bond ETF gives exposure to bonds with a long maturity, perhaps as long as 30 years out. Long-term bond ETFs are most exposed to changes in interest rates, so if rates move higher or lower, these ETFs will move inversely to the direction of rates. While these ETFs may pay a higher yield than shorter-term bond ETFs, many don’t see the reward as worthy of the risk.

iShares MBS ETF Performance:

  • 2020 performance: 4.1 percent
  • Historical performance (annual over 5 years): 2.2 percent
  • Expense ratio: 0.06 percent

Some of the most widely held ETFs also include iShares 20+ Year Treasury Bond ETF (TLT) and Vanguard Mortgage-Backed Securities ETF (VMBS).

Short-term bond ETFs

Vanguard Short-Term Bond ETF (BSV)

This kind of bond ETF gives exposure to bonds with a short maturity, typically no more than a few years. These bond ETFs won’t move much in response to changes to interest rates, meaning they’re relatively low risk. These ETFs can be a more attractive option than owning the bonds directly because the fund is highly liquid and more diversified than any individual bond.

Vanguard Short-Term Bond ETF Performance:

  • 2020 performance: 4.7 percent
  • Historical performance (annual over 5 years): 2.1 percent
  • Expense ratio: 0.05 percent

Some of the most widely held ETFs in this category also include iShares 1-3 Year Treasury Bond ETF (SHY) and Vanguard Short-Term Treasury ETF (VGSH).

Total bond market ETFs

Vanguard Total Bond Market ETF (BND)

This kind of bond ETF gives investors exposure to a wide selection of bonds, diversified by type, issuer, maturity and region. A total bond market ETF provides a way to gain broad bond exposure without going too heavy in one direction, making it a way to diversify a stock-heavy portfolio.

Vanguard Total Bond Market ETF Performance:

  • 2020 performance: 7.7 percent
  • Historical performance (annual over 5 years): 3.0 percent
  • Expense ratio: 0.035 percent

Some of the most widely held ETFs also include iShares Core U.S. Aggregate Bond ETF (AGG) and Vanguard Total International Bond ETF (BNDX).

Municipal bond ETFs

iShares National Muni Bond ETF (MUB)

This kind of bond ETF gives exposure to bonds issued by states and cities, and interest on these bonds is typically tax-free, though it’s lower than that paid by other issuers. Muni bonds have traditionally been one of the safest areas of the bond market, though if you own out-of-state munis in a fund, you will lose the tax benefits in your home state, though not at the federal level. Given the tax advantages, it is advantageous to consider a municipal bond ETF that invests in your state of residence.

iShares National Muni Bond ETF Performance:

  • 2020 performance: 5.1 percent
  • Historical performance (annual over 5 years): 2.9 percent
  • Expense ratio: 0.07 percent

Some of the most widely held ETFs also include Vanguard Tax-Exempt Bond ETF (VTEB) and iShares Short-Term National Muni Bond ETF (SUB).

Top balanced ETFs

iShares Core Aggressive Allocation ETF (AOA)

A balanced ETF owns both stock and bonds, and it targets a certain exposure to stock, which is often reflected in its name. These funds allow investors to have the long-term returns of stocks while reducing some of the risk with bonds, which tend to be more stable. A balanced ETF may be more suitable for long-term investors  who may be a bit more conservative but need growth in their portfolio.

iShares Core Aggressive Allocation ETF Performance:

  • 2020 performance: 12.8 percent
  • Historical performance (annual over 5 years): 12.1 percent
  • Expense ratio: 0.25 percent

Some of the most widely held balanced ETFs also include iShares Core Growth Allocation ETF (AOR) and iShares Core Moderate Allocation ETF (AOM).

Top commodity ETFs

SPDR Gold Shares (GLD)

A commodity ETF gives investors a way to own specific commodities, including agricultural goods, oil, precious metals and others without having to transact in the futures markets. The ETF may own the commodity directly or via futures contracts. Commodities tend to be quite volatile, so they may not be well-suited for all investors. However, these ETFs may allow more advanced investors to diversify their holdings, hedge out exposure to a given commodity in their other investments or make a directional bet on the price of a given commodity. The best-performing gold ETFs tend to offer highly effective portfolio diversification with added defensive stores of value.

SPDR Gold Shares ETF Performance:

  • 2020 performance: 24.8 percent
  • Historical performance (annual over 5 years): 5.5 percent
  • Expense ratio: 0.40 percent

Some of the most widely held commodities ETFs also include iShares Silver Trust (SLV), United States Oil Fund LP (USO) and Invesco DB Agriculture Fund (DBA).

Top currency ETFs

Invesco DB US Dollar Index Bullish Fund (UUP)

A currency ETF gives investors exposure to a specific currency by simply buying an ETF rather than accessing the foreign exchange (forex) markets. Investors can gain access to some of the world’s most widely traded currencies, including the U.S. Dollar, the Euro, the British Pound, the Swiss Franc, the Japanese Yen and more. These ETFs are more suitable for advanced investors who may be seeking a way to hedge out exposure to a specific currency in their other investments or to simply make a directional bet on the value of a currency.

Invesco DB US Dollar Index Bullish Fund Performance:

  • 2020 performance: -6.6 percent
  • Historical performance (annual over 5 years): 0.6 percent
  • Expense ratio: 0.76 percent

Some of the most widely held currency ETFs also include Invesco CurrencyShares Euro Trust (FXE) and Invesco CurrencyShares Swiss Franc Trust (FXF).

Top real estate ETFs (REIT ETFs)

Vanguard Real Estate ETF (VNQ)

Real estate ETFs usually focus on holding stocks classified as REITs, or real estate investment trusts. REITs are a convenient way to own an interest in companies that own and manage real estate, and REITs operate in many sectors of the market, including residential, commercial, industrial, lodging, cell towers, medical buildings and more. REITs typically pay out substantial dividends, which are then passed on to the holders of the ETF. These payouts make REITs and REIT ETFs particularly popular among those who need income, especially retirees. The best ETF REITs maximize dividend yields, as dividends are the main reason for investing in them.

Vanguard Real Estate ETF Performance:

  • 2020 performance: -4.6 percent
  • Historical performance (annual over 5 years): 7.1 percent
  • Expense ratio: 0.12 percent

Some of the most widely held real estate ETFs also include iShare U.S. Real Estate ETF (IYR) and Schwab U.S. REIT ETF (SCHH).

Top volatility ETFs

iPath Series B S&P 500 VIX Short-Term Futures (VXX)

ETFs even allow investors to bet on the volatility of the stock market through what are called volatility ETFs. Volatility is measured by the CBOE Volatility Index, commonly known as the VIX. Volatility usually rises when the market is falling and investors become uneasy, so a volatility ETF can be a way to hedge your investment in the market, helping to protect it. Because of how they’re structured, they’re best-suited for traders looking for short-term moves in the market, not long-term investors looking to profit from a rise in volatility.

iPath Series B S&P 500 VIX Short-Term Futures Performance:

  • 2020 performance: 11.0 percent
  • Historical performance (annual over 3 years): -41.0 percent
  • Expense ratio: 0.89 percent

Some of the most widely held volatility ETFs also include the ProShares VIX Mid-Term Futures ETF (VIXM) and the ProShares Short VIX Short-Term Futures ETF (SVXY).

Top leveraged ETFs

ProShares UltraPro QQQ (TQQQ)

A leveraged ETF goes up in value more rapidly than the index it’s tracking, and a leveraged ETF may target a gain that’s two or even three times higher than the daily return on its index. For example, a triple leveraged ETF based on the S&P 500 should rise 3 percent on a day the index rises 1 percent. A double leveraged ETF would target a double return. Because of how leveraged ETFs are structured, they’re best-suited for traders looking for short-term returns on the target index over a few days, rather than long-term investors.

ProShares UltraPro QQQ ETF Performance:

  • 2020 performance: 110 percent
  • Historical performance (annual over 5 years): 72.5 percent
  • Expense ratio: 0.95 percent

Some of the most widely held leveraged ETFs also include ProShares Ultra QQQ (QLD), Direxion Daily Semiconductor Bull 3x Shares (SOXL) and ProShares Ultra S&P 500 (SSO).

Top inverse ETFs

ProShares Short S&P 500 ETF (SH)

Inverse ETFs go up in value when the market declines, and they allow investors to buy one fund that inversely tracks a specific index such as the S&P 500 or Nasdaq 100. These ETFs may target the exact inverse performance of the index, or they may try to offer two or three times the performance, like a leveraged ETF. For example, if the S&P 500 fell 2 percent in a day, a triple inverse should rise about 6 percent that day. Because of how they’re structured, inverse ETFs are best-suited for traders looking to capitalize on short-term declines in an index.

ProShares Short S&P 500 ETF Performance:

Sours: https://www.bankrate.com/investing/best-etfs/
How to Pick an ETF and 3 Best ETFs Every Investor Should Buy

16 Best Sector Funds to Invest in Now

Look at the stock fund performance rankings for almost any time frame—one year, 10 years or any calendar year—and a handful of sector funds, which concentrate on a single industry or slice of the economy, will pepper the top of the list. In 2019, for instance, seven sector funds—including Fidelity Select Semiconductors, with a 64.5% return—ranked among the 10 best-performing stock mutual funds. Over the 12 months ending in mid September, sector-focused exchange-traded funds did even better, taking all top 10 spots.

These targeted bets can be good additions to your portfolio. Sector funds allow you to invest in a long-term growth trend—renewable energy, say, or genome-related health therapies—without having to shoulder as much stock-specific risk as you would by buying shares in individual companies.

Moreover, adding a certain sector fund can inject a bit of defense or offense into your portfolio, depending on the economic environment. In a recession, for instance, makers of consumer staples (shampoo, baby-care products and such), utilities and health care stocks tend to hold up nicely. Real estate and materials firms, as well as makers of nonessential consumer goods (luxury apparel or restaurants, say), do well during economic recoveries.

Pay mind, though, to certain sector-investing dos and don’ts. Stick to small bites: Put no more than 6% of your U.S. stock portfolio in sector funds, divided evenly between no more than three different sectors, say analysts at State Street Global Advisors. Sector investing requires some ongoing monitoring, too. Keep an eye on valuations: Buy on dips, es­pecially in those sectors that have performed well in recent months. And finally, be aware of stock concentration. Some sectors are heavily weighted in just a few companies.

We’ve highlighted the best funds and ETFs in almost every sector. In some cases, one fund stands in for two sectors. Energy in the traditional sense is not represented among our recommendations, for reasons we’ll discuss. (Returns and other data are as of September 11.)

1 of 8

Best Sector Funds: Communication Services

Communications graphic

In late 2018, S&P Dow Jones Indices reconfigured its sectors to form a new one, communication services. The shuffle grouped old telecom firms AT&T (symbol T) and Verizon Communications (VZ) with prized tech stocks, including Facebook (FB), Alphabet (GOOGL) and Net­flix (NFLX, and media com­panies such as Walt Disney (DIS), among others. But only a handful of communication services funds are truly devoted to the sector (most funds fold in tech and consumer stocks). And the sector is top-heavy: Facebook and Alphabet combined make up 40% of the S&P 500 Communication Services index.

Our favorite pure play, Fidelity Select Communication Services (FBMPX, expense ratio 0.78%), is actively managed by Matthew Drukker, who centers on U.S. company stocks with big revenue growth potential. In this sector, he says, “sales growth drives earnings and cash flow more sustainably than cutting costs or shifting the business mix.” Facebook and Alphabet make up 40% of the portfolio, but the fund does not own struggling AT&T, and that has been a boon to recent performance. Since Drukker took over nearly two years ago, the fund’s 21.5% annualized return has beaten the 13.9% gain in the S&P 500 Communication Services index.

2 of 8

Best Sector Funds: Consumer

Consumer sector graphic

Consumer stocks fall into one of two categories: staples or consumer dis­cretionary. Staples companies, which make goods people tend to use every day, include firms such as Nestlé (food and beverages) and Procter & Gamble (household and personal-care products). Consumer discretionary com­panies specialize in nonessential merchandise or services. Think Nike (NKE), McDonald’s (MCD) and luxury goods maker LVMH Moët Hennessy Louis Vuitton (LVMH).

But when it comes to picking good stocks in either category, you should keep your eye on what matters most: “Who’s taking market share, and where are the dollars going?” says Jason Nogueira, manager of T. Rowe Price Global Consumer (PGLOX, 1.07%). “It’s hard to make money in a consumer company that’s losing market share.”

Nogueira invests in both staples and discretionary companies. When the fund launched in 2016, the portfolio was balanced between the two sectors. Growth in e-commerce has swelled the discretionary side of the portfolio to 60% of assets. Amazon.com accounts for 14% of the portfolio.

The fund holds U.S. and foreign stocks, but in some cases, domicile hardly matters. “Adidas and Nike are similar, but one is based in Germany. Both are bets on China,” Nogueira says. But he also invests in local firms dominating a consumer trend, such as Japanese online cosmetics company istyle and high-tech Chinese grocer JD.com (JD).

The fund has returned 12.6% annu­alized over the past three years, which beat the typical consumer staples fund but lagged the typical consumer discretionary fund by an average of 0.6 percentage points per year. It outdid the MSCI ACWI index by an average of 5.2 percentage points per year.

For a targeted shot at internet retailing, try Amplify Online Retail ETF (IBUY, $84, 0.65%). It tracks an index of U.S. and foreign companies that generate at least a majority of annual revenues from internet-based retail, travel or services. Our favorite staples ETF is Fidelity MSCI Consumer Staples ETF (FSTA, $39, 0.08%). Procter & Gamble (PG), Coca-Cola(KO) and Walmart (WMT) are top holdings.

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Best Sector Funds: Financials

Financials sector graphic

Financial firms typically do well during an economic recovery. But even before COVID slammed the global economy, chronically low interest rates were crimping earnings. That’s one reason stocks in this sector have slumped 18.5% so far in 2020. It’s also why our choices in this sector tilt toward financial services firms that are more fee-oriented.

Consider iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI, $62, 0.42%). The portfolio holds stocks in 25 firms, including capital-markets companies (Goldman Sachs), brokers (Charles Schwab) and exchanges (Nasdaq). The fund has held up better than the 9.9% decline in the S&P 500 Financials index over the past 12 months, with a 3.2% decline. And over the past three years, it beat 94% of its peers with a 7.1% annualized return. The ETF yields 1.59%.

A good actively managed option is Fidelity Select Brokerage and Investment Management (FSLBX, 0.77%). The fund has done well over the past 12 months, with a 9.4% gain. Manager Charlie Ackerman is relatively new, but he’s off to a fantastic start with an 11.7% annualized return since he took over in 2018. Compare that with the 1.2% loss in the S&P 500 Financials index over the same period.

4 of 8

Best Sector Funds: Health Care

Health care sector graphic

If the experts are right and we’re on the verge of a tidal wave of medical breakthroughs, long-term investors should consider allocating a little extra to the health care sector.

Fidelity Select Health Care (FSPHX, 0.70%), a member of the Kiplinger 25, the list of our favorite no-load funds, offers a one-stop way to invest in the broad sector. Manager Eddie Yoon has run the fund since 2008 with spectacular results. Compared with other health funds, Yoon ranks among the top 13% or better over the past one, three, five and 10 years. And he has outpaced the S&P 500 Health Care index in eight of the past 11 calendar years. Baron Health Care (BHCFX, 1.10%) skews more of its portfolio toward small and midsize companies than the Fidelity fund. It has only a two-year history, but it has returned 19.4% annualized since its launch, which has beaten the S&P 500 Health Care index by an average of 6.5 percentage points per year. Managers Neal Kaufman and Josh Riegelhaupt look for fast-growing companies with “open-ended opportunities in large markets and competitive advantages over peers,” says Kaufman.

The pandemic has put a spotlight on biotech stocks. “It’s clear that biotech companies will be part of the solution,” says Rajiv Kaul, manager of Fidelity Select Biotechnology (FBIOX, 0.72%). But investing in biotech firms comes with unique challenges. For starters, firms tend to specialize in a particular malady. “Each disease is different, so the risks and opportunity sets vary for each company,” he says.

But Kaul revels in the research required to invest in biotech because when a new treatment works, it can be life changing. That’s one reason he favors companies with a therapy that addresses a major unmet medical need. AveXis (AVXS), for instance, has a therapy for spinal muscular atrophy, a rare and deadly genetic disease. Its one-time infusion is costly, says Kaul, but trials show it can provide profound benefits.

The fund had a rough go in 2016 and 2018. But over the long haul, its 10-year annualized return ranks among the top 13% of all health funds.

Innovation is driving earnings at medical-device companies, too. IShares U.S. Medical Devices (IHI, $295, 0.42%) has a three-year 20.5% annualized return, which beat 96% of its peers. Top holdings include Abbott Labs (ABT) and Thermo Fisher Scientific (TMO).

5 of 8

Best Sector Funds: Industrials

industrials sector graphic

After a nearly two-year funk, industrial companies are poised to rebound as the world’s economies recover post-COVID, says Jason Adams, manager of T. Rowe Price Global Industrials (RPGIX, 1.05%). “Right now is an excellent time to look at the global industrial sector.”

Adams sifts through industrial companies of all sizes from all over the world, looking for what he calls “differentiated” high-quality industrial firms with durable growth prospects. To Adams, that means industrial companies that are plugged into technology. Swedish firm Hexagon, for instance, provides sensor, software and automation technologies to industrial manufac­turers. Japan-based Keyence is a global leader in machine vision, which is used in such tasks as inspecting industrial products, reading characters and codes, and positioning industrial robots. These companies are on the “right side of change,” says Adams, “and are leaders in driving the in­dustry forward on the Internet of Things and the fusion of hardware, software and connectivity.” 

Adams is new to the fund—something we’d normally be wary of—but he’s not new to the sector. He has been analyzing industrial companies for nearly two decades. Since he joined longtime manager Peter Bates in March, the fund has returned 15.2%, ahead of the 6.7% gain in the typical industrials fund. Bates left the fund in June.

6 of 8

Best Sector Funds: Information Technology

information sector graphic

Chances are that you already have a lot of exposure to tech stocks. The sector—the biggest one—makes up 27.5% of the S&P 500. It makes sense, then, to look beyond the usual if you want to have even more tech in your portfolio.

So instead of buying a tech fund that gives you more exposure to Apple (AAPL) and Microsoft (MSFT), for instance, consider ARK Innovation ETF (ARKK, $85, 0.75%), which doesn’t own either stock. Manager Catherine Wood heads the actively managed fund, aiming to find companies that will best benefit from disruptive innovation in five broad areas: genome sequencing, robotics, artificial intelligence, energy storage and block-chain tech­nology. Veracyte (VCYT), for example, is a genomic diagnostics company; Materialise (MTLS) makes 3-D printing software. Some funds “will own any company that mentions the word robotics,” says Ark spokesman Renato Leggi. “We take a rifle-shot approach by investing in a select group of stocks that we think will be the winners.”

Over the past three years, the ETF has returned 38.7% annualized, an average of nearly 19 percentage points per year ahead of the typical tech fund. A mutual fund version of this strategy is also available in American Beacon ARK Transformational Innovation (ADNPX, 1.39%).

7 of 8

Best Sector Funds: Materials

materials sector graphic

Stocks in this sector find, develop and process raw materials to manufacture plastic, paper, concrete, metals and more. Sounds rudimentary, and it is—literally. But these stocks tend to beat the broad market during economic recoveries, including in 2009 and 2010. What’s more, some areas of the sector are in demand now from new technologies (batteries for electric vehicles, for instance, require lithium). But if you dip a toe in, be ready for volatility. Over the past 10 years, materials stocks were among the market’s most volatile, more so even than tech shares.

You can slice the sector finely with ETFs that focus on lithium, copper or timber (all of which have done particularly well over the past year). But we prefer to stay broad, with Materials Select Sector SPDR ETF (XLB, $113, 0.13%) or iShares Global Materials ETF (MXI, $72, 0.45%). Both funds have delivered above-average returns with below-average volatility. Materials Select Sector holds the 28 stocks in the S&P 500 that fall within the sector, including industrial gas companies Linde (LIN) and Air Products & Chemicals (APD), and paint company Sherwin-Williams (SHW). The ETF yields 1.88%. Global Materials holds 70% of its assets in foreign stocks. With international dividends more generous overall than U.S. payouts, its inter­national flavor means a fatter yield of 2.02%. The ETF holds 104 stocks. Linde, Australia-based mining firm BHP Group and Air Liquide, a French industrial gas and service company, are top holdings.

8 of 8

Best Sector Funds: Utilities/Real Estate

real estate sector graphic

Reaves Utilities and Energy Infrastructure (RSRFX, 1.49%) holds mostly utilities. About 40% of its assets are in utility firms with solid renewable-energy stakes, such as NextEra Energy (NEE). Demand for renewable energy is growing, and costs are declining, says comanager Timothy Porter. “That’s a powerful economic driver.” Another 24% of the fund is made up of cable companies that Porter characterizes as “unregulated monopolies.”

But the fund has a hefty slug—more than 20% of assets—in real estate investment trusts as well. That’s considerably more than the 3% of the S&P 500 held in real estate stocks, so Reaves does double duty as our favorite real estate fund, too. The managers concentrate on what we think is the best area of the REIT business these days: data centers, which own and manage facilities for computer servers that store data.

What the fund no longer owns, despite its moniker, is energy stocks. The industry is in decline, Porter says. “Every day that goes by, the cost of building a  solar plant falls, and there’s more concern about climate change and regulatory efforts to address that,” he says. “It makes fossil fuel companies less and less attractive.” We agree, which is why we are not recommending an all-energy sector bet at this time.

Over the past five years, the Reaves fund has outpaced the typical utility fund, with less volatility, too. One catch: The fund isn’t widely available in brokerage no-fee networks. TD Ameritrade is one exception. You can invest directly through Reaves by calling 866-342-7058.

Sours: https://www.kiplinger.com/investing/mutual-funds/601491/16-best-sector-funds-to-invest-in-now

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You are already an adult girl and you must decide for yourself, Tanya objected. You are now the most relevant age, and in five years nobody will need us. And in vain you smile. Parents will not tell you this, for them you will be forever young. And I added, always drunk.



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