Where should you
think about investing when the pandemic subsides and our lives
return to more or less to normal?
My answer might
surprise you.
Many
of today’s hot market sectors, especially technology-driven
products, will still be strong after the pandemic becomes history.
Based on that premise, here are five
already hot ETFs that I expect to continue their winning ways for
some time.
That said, since they've already
recorded 60%+ returns over the past 12
months, and double-digit average annual
returns over the past three years, you may
want to wait for a market downturn before taking positions.
In any case, here's the list.
Invesco Solar Portfolio (TAN)
Rather than holding a broad renewable energy
portfolio, Invesco plays it smart by focusing on the strongest part
of that sector; pure-play solar energy stocks. Even better, Invesco
overweights smaller players, which have the best growth prospects.
Invesco Solar has returned 141% (not a typo) over the past 12-months
and has averaged 46% annually over the past three years.
Amplify ETF Trust (IBUY)
Sure, the pandemic has already spurred surprising
growth in online retail, but the pandemic has permanently changed
the way people shop and that growth should continue for some time.
Amplify holds 48 mostly U.S.-based firms generating at least 70% of
revenues from online sales. Holdings include heavyweights like
Amazon (AMZN) and eBay (EBAY), but those giants each constitute less
than 3% of the total portfolio. Amplify returned 88% over the past
12-months and averaged 37% annually over three years.
ARK Autonomous Technology & Robotics (ARKQ)
Holds 38 stocks mostly based in the U.S. involved in
the development of new technologies such as autonomous
transportation (e.g. self-driving autos), robotics and automation,
3D printing, energy storage (e.g. batteries) and space exploration.
Obviously, those will be hot sectors for some time. ARK Industrial
has returned 79% over the past 12-months and averaged 24% annual
returns over three years.
Global X China Consumer (CHIQ)
China is arguably the world’s fastest growing economy
and Chinese consumers are driving much of that growth. Global X
gives you an entre into the fastest growing consumer sectors.
Internet and online retail account for 40% of holdings. Next come
automobiles and diversified consumer services, each at 15%. The fund
returned 68% over the past 12-months and averaged 20% annually over
the past three years.
VanEck Vectors Video gaming and eSports (ESPO)
Even before the pandemic, online gaming one of the
fastest growing industries, worldwide. While the pandemic lockdown
obviously spurred growth, in my view, gaming popularity growth will
continue after the pandemic. VanEck holds mostly non-U.S.-based
stocks that generate at least 50% of revenues from video gaming or
from Esports (electronic sports games played by teams) events. An
October 2018 IPO, the fund has returned 79% over the past 12 months
and 42% in 2019.
While they probably won’t repeat recent growth
numbers, and there will be bumps along the way, I expect these five
ETFs to outperform the overall market for some time.
published 10/27/20
