There are plenty of ETFs out there and ones to watch regarding the continual situations everyone faces regarding the ongoing pandemic and the state of talks concerning eventual stimulus.
ETF Trends CEO Tom Lydon joined Yahoo Finance host Alexis Christoforous on the “ETF Report” to go over some of his picks for the best ETFs to look out for at this time and what inflows have been seen as 2020 comes closer and closer to an end.
“It’s been a blockbuster year for ETF flows,” Lydon explains. With over $450 billion in new flows, it’s certainly a record year in that regard, led by fixed income for the first time, no less.
With that in mind, many investors have been moving away from treasury related allocations to corporates and high yields, as everyone has been trying to chase yield. Meanwhile, on the equity side, with technology being in a big position it has been in, many of the Nasdaq allocations have also been huge.
One ETF to keep in mind is the Vanguard Information Technology ETF (VGT), which has done very well this year. VGT is currently up over 37%.
As far as the push and pull between value and growth over the last few months and the sectors that are succeeding the most, Lydon notes how just in the last month, Value came back strong after getting hit for much of the year. In terms of funds to keep in mind, there’s the Vanguard Value ETF (VTV), which has done very well in November.
Watch Tom Lydon Go Over Growth and Value Plays On Yahoo Finance
“If you want to be diversified between growth and value, the S&P 500 probably isn’t your best bet right now,” @ETFtrends CEO @TomLydon says. “In 2021, look for more value-oriented opportunities, not just from an index standpoint but also from an active management standpoint.” pic.twitter.com/zJVtjqUuCk
— Yahoo Finance (@YahooFinance) December 2, 2020
Meanwhile, the FAANG stocks actually did quite poorly by comparison, which adds to a continual debate in regards to whether growth or value stocks will be coming out on top.
“We are going to see value finally come back because the divergence in valuations between growth stocks and value stocks have been the biggest since 1999,” Lydon points out.
Lydon also notes the optimism for growth to continue, as more companies have managed to adapt to the Covid environment, embracing technology and playing into how to best manage through earnings seasons.
As far as investors interested in both growth and value, Lydon explains how the S&P 500 is not the place to look for this, as it’s very growth and technology-oriented, with little room for value stocks. For more diversification, Lydon recommends keeping an eye on the smaller companies offering value opportunities to go along with whatever growth options have already been channeled.
Lydon states, “In 2021, look for more value-oriented opportunities, not just from an index standpoint, but also from an active management standpoint.”
For more market trends, visit ETF Trends.