As unpredictable as the financial markets have been in the year 2020, there are certain areas of the markets that have continued to perform relatively well. Exchange Traded Funds (ETFs) seem to have been one of the areas outperforming many others this year. In fact, ETF inflows have jumped by a whopping 40% so far in 2020. The uncertainty in the markets has caused various new trends to come about, as well as shifts in the current trends. The shift towards more affordable index tracking vehicles has worked out well for ETFs, causing many investors to turn to ETFs as a way of consolidating and tracking their investments. Within this sector of the market, certain ETFs are rising to the top, so let’s take a look at who’s who in the ETF space.
Clean energy’s time to shine
One thing stands out amidst the murky waters of the financial markets this year, and that’s clean energy ETFs. Many of the popular ETFs hold shares in Tesla and other companies with a large focus on sustainability, as alternative energy sources gain more attention in the markets. Amongst the top of the most popular alternative energy ETFs are iShares Global Clean Energy ETF, Invesco Solar ETF and Invesco WilderHill Clean Energy ETF.
The iShares Global Clean Energy ETF comprises stocks from 30 companies within the clean energy realm. These companies are involved in solar technology, biofuels, ethanol, geothermal, hydroelectric and wind. Some of the companies listed in the iShares Global Clean Energy ETF are SunRun Inc, Plug Power Inc, First Solar Inc, and Vestas Wind Systems. This ETF is trading at $21 at the time of writing.
Invesco Solar ETF is based on the MAC Global Solar Energy Index, and, as the name implies, focuses on companies in the solar energy sector. This ETF comprises stocks from companies like SolarEdge Technologies Inc, Enphase Energy Inc and Scatec Solar ASA. This ETF is currently trading at $74.27.
The Invesco WilderHill Clean Energy ETF includes companies within the clean energy realm, and also extends to companies which are not in the clean energy industry but still relate or are tied to it, including companies like Vivint Solar Inc and Tesla. This ETF is currently trading at $69.61.
Top of the charts
When it comes to ETF Gold options, SPDR Gold Trust (GLD) remains a popular option for investors who don’t want to purchase the actual precious metal itself, and rather trade on its price movements as part of an ETF bundle. Investing in ETF gold can also be used as a hedge for declines in the stock markets, as some investors are currently looking to gold as a ‘safe haven’ investment option in the volatile markets.
The VanGuard S&P 500 ETF (VOO) is another ETF that is in the spotlight and is based on the S&P 500, allowing traders to invest in the market performance of 500 of the top performing companies in the US. This also enables investors to diversify their portfolio into many different companies and industries. This ETF is largely used by those investing with a longer-term strategy.
When it comes to companies with a large market capitalization, Invesco QQQ (QQQ) is a popular ETF. This ETF follows the NASDAQ 100 index, comprising the largest domestic and international non-financial companies listed on the NASDAQ exchange. Those who invest in such ETF options often pay attention to news in the technology sector as this could influence the stock of many of the companies in the NASDAQ 100.
Looking to Invest in ETFs?
For those investors who choose to invest in ETF options as CFDs, such as those mentioned above, it’s a good idea to first conduct a review of online broker platforms, which includes making sure that they are regulated. A regulated broker is more secure and reliable and will be registered with an official body within the region. After doing a review of online broker options, investors should also research various ETFs and their performance over several months or years, when deciding on which ETF CFDs to invest in. Nowadays, the most reputable trading platforms come equipped with educational tools that allow you to further your trading knowledge and enhance your skills, a definite plus before you invest in ETF instruments.