Harry Domash's Winning Investing



Five ETFs For Now & Next Year Too

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

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