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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.


Top ETF CFDs to Trade in 2021

January 20, 2021 13:26 UTC
Reading time: 5 minutes

The issue of top ETF CFDs (Exchange Traded Funds Contracts for Differences) requires analysis of the ETF sectors to pass judgement. There is no clear answer as to what the best ETF CFDs for trading are. Some higher risk investments may appeal to the risk profile of younger investors, as they have the time to build wealth through their income stream, but it's probably not appropriate for retirees who rely predominantly on their income stream from their asset base.

Best ETFs Of The Year

Hence, it is key to determine a person's risk profile before selecting an appropriate asset. As the ETF markets are large and expanding, the leading funds could have their perks as a long-term investment. Below are some ETFs that are considered to be among the best funds available across numerous asset classes.

Top Commodity ETFs For 2021

Gold and Silver ETFs

Access to defensive assets includes tracking the Gold and Silver assets, which is a good investment for high-inflation environments. Some ETFs are backed by physical gold holdings, of which many are listed globally.

The best choice for professional traders is the SPDR Gold Shares (GLD), due to its strong liquidity and lower transactions costs associated with bid/ask spreads. As for the long-term investors, the iShares Gold Trust (IAU) is good because its annual expense ratio is 15 basis points below GLD.

Real Estate ETFs

Real estate investors can get diversification benefits from real estate investment trusts (REITs) of various types. A REIT is an entity that develops or manages real estate properties to produce income. There are many types of REITs, including residential, commercial (e.g., factory outlets, health care facilities, hotels, office and shopping centres), industrial, and mortgage REITs.

As required by law, REITs must disburse at least 90 percent of their taxable income each year to shareholders by paying them dividends. REITs are regulated in the USA by the U.S. Securities and Exchange Commission. Furthermore, investors can purchase shares in mutual funds or exchange-traded funds that hold one or many REITs in their portfolios.

Some portfolios in this category also invest in real estate operating companies. If you're considering which REIT index funds to invest in, here are some of the top-ranked real estate mutual funds:

  • Vanguard Large-Cap ETF CFD (VM)
  • SPDR Dow Jones International Real Estate ETF CFD (RWX)
  • iShares U.S. Real Estate ETF CFD (IYR)
  • Schwab U.S. REIT ETF CFD (SCHH)

Best Vanguard ETF For 2021

As the second-largest U.S. ETF sponsor by assets, Vanguard had $869.60 billion in assets under management as of April 11, 2018, only lagging behind iShares. Despite this, Vanguard's total ETF stable is relatively limited, but large enough to make it difficult to determine the best Vanguard ETF.

The Vanguard FTSE Developed Markets ETF (VEA) Fund was one to watch, as the VEA added $17.46 billion in new assets during 2017, and being the third highest total among U.S. listed ETFs. As developed market stocks were trading at large discounts relative to the S&P 500, investors could be interested in the VEA again for 2021. According to Investopedia, VEA provides exposure to nearly 3,900 stocks from 24 countries.

Best Growth ETFs

Growth ETFs are considered to possess growth characteristics, rapidly growing sales, and relatively high price-to-earnings ratios.

  • Vanguard Growth ETF CFD (VUG)
  • Technology Select Sector SPDR Fund ETF CFD (XLK)
  • Consumer Discretionary Select Sector SPDR Fund ETF CFD (XLY)
  • iShares Nasdaq Biotechnology ETF CFD (IBB)

Best Dividend ETFs

Investors seeking dividend yields have plenty of ETFs to choose from. Nevertheless, while a company's dividend track record can be informative, it cannot be looked at solely for forecast dividend yields. The earnings/company dividend payout ratio in the past few years does not necessarily provide a solid indication of what will occur in the upcoming year.

Investors should pay attention to:

  • iShares U.S. Real Estate ETF CFD (IYR)
  • PowerShares Preferred Portfolio ETF CFD (PGX)
  • Schwab US Dividend Equity ETF CFD (SCHD)
  • SPDR S&P Dividend ETF CFD (SDYUS)

Top Artificial Intelligence ETFs

Artificial Intelligence is a field of computer science that focuses on creating intelligent machines that can work and make decisions like humans. Such ETFs can benefit from the increased use of artificial intelligence, particularly in various aspects of industrial or non-industrial robotics, automation, social media, autonomous vehicles, and natural language processing.

Amazon, Tesla Motors, Apple, and Alphabet are funds that have at least 25% of portfolio exposure to companies that spend a lot on artificial intelligence (AI) research. Those funds specifically invest in companies that develop AI, technological improvement, as well as development of new services and products. AI is used for selecting individual securities for inclusion into the fund. Some examples include:

  • PowerShares QQQ ETF CFD (QQQ)
  • Technology Select Sector SPDR Fund ETF CFD (XLK)

Other ETFs With Big Growth Potential

This is the list of other ETFs from different sectors such as financial, health, energy, aerospace and defense. These ETFs also have big growth potential.

  • iShares US Aerospace & Defense ETF CFD (ITA)
  • iShares U.S. Home Construction ETF CFD (ITB)
  • iShares Global Energy ETF CFD (IXC)
  • VanEck Vectors Oil Services ETF CFD (OIH)
  • SPDR S&P Biotech ETF CFD (XBI)
  • Vanguard FTSE Emerging Markets ETF CFD (VWO)
  • Financial Select Sector SPDR Fund ETF CFD (XLF)
  • Schwab U.S. Large-Cap Value ETF CFD (SCHV)

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

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