ETF Investment Strategies for Second Half of 2021

In this episode of ETF Spotlight, I speak with Gargi Pal Chaudhuri, Head of iShares Investment Strategy Americas at BlackRock (NYSE:BLK), the world’s largest money manager with $9.5 trillion in assets under management. We discuss the market outlook and investing strategies for the second half of 2021.

The S&P 500 ETF (IVV) gained 14.4%, its best first-half performance since 1998, the Dow Jones ETF (DIA) rose 12.7% and the Nasdaq 100 ETF (QQQ) returned 12.5% during the first two quarters. The small-cap Russell 2000 was the best performer with a gain of about 17.0%.

Continued economic recovery and record earnings growth could support the market rally in the second half but investors remain concerned about rising inflation and new Covid-19 variants.

Earlier this year, investors piled into value and cyclical areas that benefit from the economic reopening. The iShares Russell 1000 Value ETF (IWD) outperformed the iShares Russell 1000 Growth ETF (IWF) by the widest margin in a decade until May, but growth stocks, particularly mega cap tech stocks have rebounded strongly over the past few weeks.

BlackRock remains bullish on cyclically oriented value and small-cap ETFs like the iShares Core S&P SmallCap ETF (IJR) and the iShares U.S. Financials ETF (IYF), which generally do well during periods of higher economic growth. They also expect the iShares Core MSCI Europe ETF (IEUR) to benefit from increasing pace of vaccinations and continued fiscal and monetary policy support in Europe.

Inflows into sustainable ETFs continue to surge with the transition to a “net zero” global economy. ETFs like the iShares Global Clean Energy ETF (NYSE:XLE) (ICLN) and iShares ESG Aware MSCI USA ETF (ESGU) allow investors to customize portfolios around climate needs.

President Biden’s infrastructure plan, aimed at improving the country’s transportation, water and broadband infrastructure, could benefit ETFs like the iShares U.S. Infrastructure ETF (IFRA) and iShares Semiconductor ETF (SOXX). Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.

(In full disclosure, Neena owns shares of SOXX in the ETF Investor Portfolio.)

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Invesco QQQ (QQQ): ETF Research Reports

SPDR S&P 500 ETF (SPY): ETF Research Reports

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iShares Semiconductor ETF (SOXX): ETF Research Reports

iShares Global Clean Energy ETF (ICLN): ETF Research Reports

iShares Russell 1000 Growth ETF (IWF): ETF Research Reports

iShares Core S&P 500 ETF (IVV): ETF Research Reports

iShares Core S&P SmallCap ETF (IJR): ETF Research Reports

iShares Russell 1000 Value ETF (IWD): ETF Research Reports

iShares Core MSCI Europe ETF (IEUR): ETF Research Reports

iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports

iShares U.S. Infrastructure ETF (IFRA): ETF Research Reports

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