One of the secrets to Canadian entrepreneur Simon Kronenfeld’s success is his ability to know what funds to pay attention to. ETFs, or exchange-traded funds, play a major role in this strategy. For those who wish to learn from his success, here are the top five ETFs to buy into in 2021.
Vanguard S&P 500
The Vanguard ETF monitors the S&P 500, which measures the success of the 500 largest companies in America. This market has posted an average return between 10-11% for investors in the last 20 years and saw an increase over that amount in 2020, where the returns topped 18%. Simon Kronenfeld notes the low 0.03% management fee for investing in this market and expects it to keep growing. This will allow investors a low buy-in while achieving a steady rate of return.
Invesco QQQ Trust
The Invesco QQQ Trust focuses on technology stocks, adding Nasdaq stocks when they rise high enough. People who want to invest in big tech names like Tesla, Apple, Google, and more can find a home in this market. The fund has a 0.20% expense ratio, which is standard for its type, and is one of the largest ETFs. It has remained on an upward trend for years, and the increasing importance of big tech makes it likely that the trend will continue for some time.
Vanguard High Dividend Yield
For those who want an American focus to their investments, the Vanguard High Dividend Yield follows the FTSE High Dividend Yield Index. This index focuses on American companies, specifically the ones that provide high-dividend yields. This market saw only a small amount of growth in 2020, but Simon Kronenfeld feels that it remains an extremely profitable venture. The expense ratio is only 0.06%, but you can receive steady dividends between 2.50% and 3.50% on top of any capital appreciation.
Invesco Dynamic Leisure and Entertainment
Investing in the entertainment industry is akin to buying low right now. Because few people were able to go out and enjoy the hospitality and entertainment industries, those businesses struggled in 2020. However, the leisure and entertainment industry has adjusted since, finding ways to work within certain restrictions even as a return to normalcy seems inevitable. For this reason, the Invesco Dynamic Leisure and Entertainment industry offers a lot of room for your money to grow. The fund charges a higher management fee, with a 0.63% expense ratio, but getting in soon can result in a major financial boom as the industry returns to its normal rate of growth.
VanEck Vector Gold Miners
Gold never goes out of style. The VanEck Vector Gold Miners ETF charges a high management fee of 0.52%, but the performance makes that investment work it. The ETF saw a 20% increase in 2020 as people put more stock in the long-term value of gold. Note that this fund doesn’t focus on the movement of the gold itself, but rather the miners who dig it out of the earth. This provides an investment in the means of production, which is always a good long-term buy. With inflation rising at higher levels than expected in 2021, investing in an ETF that is connected to the gold market remains a wise financial move.
These five funds give you a fantastic group of starting points for your 2021 and 2022 investments. None of them guarantee results, but all of them are about as safe a bet as you can get in today’s marketplace. Notably, it helps to look at what successful entrepreneurs like Simon Kronenfeld are doing. These moguls don’t make a habit of throwing their money away, so following their lead is often a good move.