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Five ETFs have been included in Bloomberg Intelligence’s new “100 Investment Ideas to Watch for 2021” (BI100) report. The list identifies 100 global public companies, credits, market strategies and ETFs that BI analysts believe will benefit from significant fundamental catalysts and developments in 2021.
The five ETFs are the ARK Innovation ETF (ARKK), Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC), Invesco Nasdaq Next Gen 100 ETF (QQQJ), Vanguard Total Stock Market ETF (VTI), and Xtrackers S&P 500 ESG ETF (SNPE).
As international markets and institutions are navigating the ongoing pandemic, as well as major political transitions across the globe, the BI100 aims to provide a globally inclusive portfolio and outlook for 2021 to both the business and investor community alike.
Bloomberg Intelligence’s Eric Balchunas said: “For ETFs we chose funds that have captured investors' cash and attention and that also tap into many of the different trends and themes we are watching for 2021.”
With regards to the ARK Innovation ETF, the BI100 report notes that its transparent, highly concentrated portfolio of world-changing companies from a variety of sectors has defied all laws of exchange-traded fund flows, growing to $13 billion thanks to a return of 500% since inception on big bets such as Tesla, Zillow, and Swiss gene therapy company Crispr Therapeutics. But, it warns, the same things that make ARKK successful could mean tough sledding if there’s a market downturn or preferences shift away from more volatile stocks in favor of ones that trade at lower prices relative to dividend, sales, or earnings potential.
Invesco launched the Nasdaq Next Generation 100 ETF in October to track the nonfinancial securities ranked 101-200 on the Nasdaq exchange. This ETF, which has impressively gathered more than $500 million in its brief existence, could be thought of as an on-deck circle for companies with reasonable chances of making it into the big leagues of the Nasdaq-100. The fund’s notable crossover with popular thematic investing categories can be encapsulated in its top three holdings: Trade Desk, Roku and CrowdStrike.
This year’s new BI100 report represents an expansion from BI’s traditional 50 ‘companies to watch’ annual list. The BI100 specifically analyzes how critical themes such as green recovery, smart healthcare, and digital transformation will be impacted by public health and policy changes. Bloomberg Intelligence’s team of over 350 analysts spent months evaluating and assessing over 2,000 public companies across 135 industries to devise the BI100.
Bloomberg Intelligence Global Director of Research David Dwyer said: “At a chaotic time when the Covid-19 pandemic is upending entire industries and causing extreme market volatility around the world, the BI100 provides investors with analysis of where key industries and financial products may be headed throughout the year. Using detailed yet accessible language, our analysts help investors at any level understand the current landscape of business. The list is supported by much more detailed analysis and data on the Bloomberg Terminal.”
Bloomberg Intelligence’s Chief Equity Strategist Gina Martin Adams adds: “As markets look to the fits and starts of the emerging economic recovery and additional stimulus from U.S. policymakers to drive the overall trend, the BI100 offers analysis focused on data and deep industry expertise to identify enduring opportunities for the year ahead. This report serves as a guide to actionable insights in a pivotal year that will change how and where people work, how individuals and companies will be taxed, and which industries will thrive in the post-pandemic economy.”
