ETF investment strategies for the second half of 2021
- (1:00) – Analysis of market performance in 2021: what to expect in the future
- (7:50) – What are the biggest risks for the current market?
- (12:50) – Growth stocks are soaring again: where should investors look?
- (19:45) – How can ESG investing benefit investors?
- (23:40) – What investments could benefit from the new infrastructure plan?
In this episode of ETF Spotlight, I speak with Gargi Pal Chaudhuri, Head of iShares Investment Strategy for the Americas at BlackRock, the world’s largest fund manager with $ 9.5 trillion in assets under management. We discuss the market outlook and investment strategies for the second half of 2021.
The S&P 500 ETF IVV gained 14.4%, its best first half performance since 1998, the Dow Jones ETF DIA rose 12.7% and the Nasdaq 100 ETF QQQ returned 12.5% in the first two quarters. The Russell 2000 small cap was the best performer with a gain of around 17.0%.
The continued economic recovery and record earnings growth could support the market recovery in the second half of the year, but investors remain concerned about rising inflation and new variants of Covid-19.
Earlier this year, investors crowded into the value and cyclical areas that are benefiting from the economic reopening. The iShares Russell 1000 Value ETF IWD outperformed the iShares Russell 1000 Growth ETF IWF by the widest margin in a decade through May, but growth stocks, especially mega-cap tech stocks, rebounded strongly over the past few weeks.
BlackRock remains bullish on value and small cap cyclically oriented ETFs like the iShares Core S&P SmallCap IJR ETF and the iShares US Financials IYF ETF, which generally perform well during periods of higher economic growth. They also expect the IEUR iShares Core MSCI Europe ETF to benefit from an increasing pace of vaccination and continued support for fiscal and monetary policies in Europe.
Entries into sustainable ETFs continue to increase with the transition to a “net zero” global economy. ETFs like iShares Global Clean Energy ETF ICLN and iShares ESG Aware MSCI USA ETF ESGU allow investors to customize their portfolios according to climatic needs.
President Biden’s infrastructure plan to improve the country’s transport, water and broadband infrastructure could benefit ETFs like the iShares US Infrastructure IFRA ETF and the iShares Semiconductor SOXX ETF. Tune in to the podcast to learn more.
Be on the lookout for the next edition of the ETF Spotlight and don’t forget to register! If you have any comments or questions, please email email@example.com.
(By all disclosure, Neena owns shares of SOXX in the ETF investor portfolio.)
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