Coronavirus vaccines are coming to market soon, setting the stage for bullish outlooks on equities and an economic rebound in 2021. Those scenarios are favorable for factor-based strategies such as the Entrepreneur 30 Fund (NYSEArca: ENTR).
The Entrepreneur 30 Fund tries to reflect the performance of the Entrepreneur 30 Index, which is comprised of 30 U.S. companies with the highest market capitalizations and composite scores based on six criteria referred to as entrepreneurial standards. ENTR primarily invests in US Large Cap companies that meet the thresholds embedded in their proprietary Entrepreneur Factor (EF).
“Specifically, Goldman said it expected the S&P 500 to surge 19% from Monday’s close, to 4,300, by the end of 2021, with gains tacking on an additional 7%, to 4,600, by the end of 2022,” reports Business Insider. “Driving those gains would be a surge in corporate profits in 2021, with the S&P 500 expected to notch an earnings-per-share record of $175, representing year-over-year growth of nearly 30%, Goldman estimated.”
The ENTR ETF Combines Growth and Value
What makes ENTR a potential winner is that it offers both growth and value coverage, important traits at a time when market observers expect value to rebound while not forecasting an overt slump for high-flying growth fare.
Growth stocks may be seen as exorbitant and overvalued, causing some investors to favor value stocks, which are considered undervalued by the market. Value stocks tend to trade at a lower price relative to their fundamentals (including dividends, earnings, and sales).
Value stocks tend to trade at a lower price relative to their fundamentals (including dividends, earnings, and sales). While they generally have solid fundamentals, value stocks may have lost popularity in the market and are considered bargain-priced when compared with their competitors.
When investing in these factors, investors may notice that specific variables may outperform over short-term periods since they will act differently in differing market conditions. Yet no single factor dominates or outperforms when looking at extended periods over the long-term.
ENTR factors screened include management, which requires set factors regarding a company’s management must be met for a company to be included, such as the turnover among the top five executives within a company as compared to other companies in the broader universe.
For more on entrepreneurial strategies, visit our Entrepreneur ETF Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.