A Variety Of Industries Could Rebound In 2021; 3 ETFs Could Benefit

 | Dec 28, 2020 06:07

As COVID-19 vaccines become more widely available, Wall Street is hopeful that 2021 will bring more normalcy and in turn revive industries stymied by the impact of COVID-19.

Last week's articles reviewed the 11 S&P 500 sectors and ETFs for exposure to each—here,}} here and here. In this post we'll focus on industries that should be on investors' radar in the year ahead and note 3 ETFs that could benefit from these shifting trends.  

h2 2021 Investment Trends /h2

Many sectors pressured by the pandemic in 2020 could gain in 2021, including travel, leisure, commercial real estate as well as the automotive and finance industries.

If the vaccine rollout goes smoothly, we will likely see an upswing in travel, which would benefit airlines and cruise operators as well as the leisure segment which includes hotels, restaurants and entertainment venues. Commercial real estate may gain as retail malls reopen fully and companies look for office space again.

Automotive and auto parts could see higher demand as people spend less time at home; and financial institutions, such as banks where earnings have come under pressure from low-interest rates, are also in a position to benefit.

Debates leading up to the U.S. Presidential election in November illustrated that increased infrastructure spending is one issue that has bipartisan support. Given record-low interest rates, significant sums could be allocated to capital-investment activities stateside. As a result, companies focusing on urban and national infrastructure development including construction, materials, minerals, digital networks, energy systems, sanitation, and the environment are attractive. 

Secular trends that stand to benefit from positive earnings growth and evolving consumer behavior patterns over time are also of interest. We'd highlight digitalization, such as artificial intelligence, Internet of Things, cloud computing, cybersecurity, fintech, blockchain (a trend that goes beyond the increase in the prices of cryptocurrencies), health care (for example, due to a global aging population or developments in genomics) and decarbonization (including clean energy and electric vehicles).

h2 1. ETFMG Travel Tech ETF/h2

Travel stocks were among the worst-performing shares in the S&P 500 in 2020. Those who anticipate the travel industry to make a recovery could consider researching the ETFMG Travel Tech ETF (NYSE:AWAY). With its 28 holdings, the fund offers access to tourism and travel firms dependant on technology.