Investing

Top ETFs As Markets Enter Final Week Of 2020

Markets largely traded flat last week and continued the tug of war between optimism and pessimism. However, to kick off the final week of 2020, markets surged as President Donald Trump finally signed the $900 billion economic stimulus bill. Investors cheered the news and sent the major indices to record highs to kick off the closing week of 2020. We have reached an exciting, and potentially pivotal time in not only the markets, but also the pandemic as the year closes out. However, there is still much uncertainty and unpredictability. The outlook for 2021 is certainly positive (especially the second half of the year), but in the short-term, there could be a lot of volatility and uncertainty. The pandemic is still not over, and to date, only around over 1 million Americans have been vaccinated. A good way to manage this risk and add diversity to your portfolio is through investing in ETFs. Q.ai’s deep learning algorithms have identified several ETFs to look out for this week based on their fund flows over the last 90-days, 30-days, and 7-days. We have identified two Top Buys, two Attractives, two Neutrals, and one Unattractive this week. 

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Top Buy

ARK Innovation ETF (ARKK)

The first Top Buy ETF for this week is the ARK Innovation ETF
ARKK
. This ETF focuses on holding companies that are defined by ‘‘disruptive innovation’’ or the companies that provide a product or service that could potentially change the way the world works. With top holdings consisting of companies such as Tesla
TSLA
, Roku, Crispr Therapeutics, Square, and Invitae, Ark Invest seemingly has that covered. With $$18,845,085,347.19, the ETF is small-medium sized. Its fund flows have been consistently positive, with a 90-day fund flow of $5,368,731,000.00, 30-day fund flow of $3,466,457,800.00, and 1-week fund flow of $1,198,269,450.00. With a net expense ratio of 0.75%, it is very expensive- but that is what you get with an ETF as actively managed as an ARK ETF.

ARK Genomic Revolution Multi-Sector ETF (ARKG)

The ARK Genomic Revolution Multi-Sector ETF
ARKG
is our next Top Buy ETF this week. The second Top Buy ARK ETF, this ETF aims to hold companies that are focused on innovation and advancements in modern medicine, healthcare, bioinformatics, targeted therapeutics, and molecular diagnostics. The ETF is on the smaller side with $7,756,449,174.25AUM. It has seen consistently positive fund flows, with a 90-day fund flow of $3,489,720,700.00, 30-day fund flow of $2,587,841,300.00, and 1-week fund flow of $1,067,631,650.00. The ETF also has a very pricey net expense ratio of 0.75%.

Attractive

Invesco S&P 500 Equal Weight ETF (RSP)

The Invesco S&P 500 Equal Weight ETF
RSP
is our first Attractive ETF this week. This ETF aims to track stocks that trade on the S&P 500. However, rather than weigh the holdings by market cap, the ETF equally weights the stocks, and is rebalanced quarterly. The ETF is on the small-medium side with $17,830,136,250.78 AUM. It has seen consistently positive fund flows, with a 90-day fund flow of $1,945,332,974.50, 30-day fund flow of $1,705,148,724.10, and 1-week fund flow of $535,783,156.00. Its net expense ratio of 0.2% is also reasonable.

Invesco S&P 500 Quality ETF (SPHQ)

The Invesco S&P 500 Quality ETF
SPHQ
is our next Attractive ETF this week. This ETF aims to track high quality stocks that trade on the S&P based on three fundamental measures-return on equity, accruals ratio and financial leverage ratio. The ETF is smaller-sized with $2,368,692,844.30 AUM. It has seen consistently positive fund flows, with a 90-day fund flow of $462,506,602.80, 30-day fund flow of $413,282,662.60, and 1-week fund flow of $488,383,186.70. Its net expense ratio of 0.15% is also very reasonable.

Neutral

SPDR S&P 500 ETF Trust (SPY)

The first Neutral ETF for this week is the SPDR S&P 500 ETF Trust
SPY
. This ETF is a benchmark ETF for tracking the performance of the S&P 500 as closely as possible, and is one of the largest ETFs in the world in terms of AUM. With $324,801,648,614.95, it is by far the largest ETF on this week’s list. Its fund flows have been inconsistent and mixed with a 90-day fund flow of $2,280,647,106.40, 30-day fund flow of -$3,006,550,747.85, and 1-week fund flow of $6,945,264,437.60. With a net expense ratio of 0.094%, it is also very cheap.

Invesco QQQ Trust (QQQ)

The Invesco QQQ Trust
QQQ
is our next Neutral ETF for the week. This ETF is considered to be the staple ETF for tracking the Nasdaq
NDAQ
as closely as possible, with holdings weighted by market cap. The ETF is also rebalanced quarterly. It is a very large ETF with $150,344,293,245.45 AUM. It has seen consistently positive fund flows, as the Nasdaq continues hitting record highs. The ETF has a 90-day fund flow of $9,316,886,831.50, 30-day fund flow of $1,334,095,546.50, and 1-week fund flow of $1,045,561,009.00. Its net expense ratio of 0.2% is also very cheap and attractive.

Unattractive

Invesco S&P 500 Pure Growth ETF (RPG)

The Invesco S&P 500 Pure Growth ETF
RPG
is our only Unattractive ETF this week. This ETF aims to hold “deep growth” S&P 500 stocks largely based on three-year sales per share growth, the three-year ratio of earnings per share change to price per share, and momentum (the 12-month percentage change in price). With $2,727,575,793.66 AUM, it is one of the smallest ETFs on this week’s list. Its fund flows have also been consistent with a 90-day fund flow of $743,094,528.50, 30-day fund flow of $821,152,834.40, and 1-week fund flow of $836,735,138.30. With a net expense ratio of 0.35%, it is not as cheap as others.

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