5 Best ETF Stocks to Invest in July 2021
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ETF investing has become very popular and last year the total assets of US ETFs surpassed $5 trillion. 2021 is turning out to be another record year for US ETFs and inflows in the first quarter were a record high.
Investors have poured almost $400 billion in US ETFs in the first five months of 2021 and looking at the strong momentum, the full-year figures look set to surpass last year’s high of $507 billion. What are the best ETFs to invest in July 2021?
1. iShares Silver Trust (NYSE: SLV)
The iShares Silver Trust is an ETF that gives you exposure to physical silver. Silver prices have been weak in the first half of 2021 and are currently down almost 3% for the year. Notably, silver hit an all-time high of $48 in 2011, the same year when gold made its all-time high. Meanwhile, while gold when on to hit a new record high last year amid its safe-haven appeal, silver prices are only about half of their peaks. Add the inflation and the performance would turn out to be even worse over the period.
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SLV looks like a good ETF to buy in July
That said, silver prices might rebound which would also mean higher returns from SLV ETF. Notably, SLV was targeted by Reddit group WallStreetBets also earlier this year. However, since it is not easy to trigger a short squeeze in commodities like silver, the Reddit traders did not have much luck at pumping prices.
Several analysts are bullish on silver and Bank of America expects prices to average $29.28 this year. There are several bullish drivers for silver including rising inflation and the rebound in industrial demand. SLV has an expense ratio of 50 basis points and has a total AUM of over $14 billion while the average traded volume is over 23 million units daily which makes it very liquid.
SLV ETF looks like a good buy for the second half of the year and a good way to bet on silver’s positive outlook.
2. Vanguard S&P 500 ETF (NYSE: VOO)
An S&P 500 ETF should ideally be a core part of an investor’s portfolio. Berkshire Hathaway chairman and legendary value investor Warren Buffett have been advocating investing in S&P 500 index funds due to their lower cost. Berkshire Hathaway has also invested some money in S&P 500 ETFs.
At last year’s annual shareholder meeting Buffett said “I don’t think most people are in a position to pick single stocks; a few may be, but on balance, I think people are much better off buying a cross section of America and just forgetting about it.” He was referring to the S&P 500 as a cross-section of America.
VOO looks like a good ETF to buy in July
The Vanguard S&P 500 ETF is among the largest and most liquid S&P 500 ETF. It has an expense ratio of only 3 basis points and has assets of almost $750 billion. The average traded volumes are around 3.9 million units every day. Despite US stock markets trading at record highs, VOO should find a place in your portfolio as a long-term allocation.
67% of all retail investor accounts lose money when trading CFDs with this provider.
3. The SPDR S&P Metals and Mining ETF (NYSE: XME)
Among the sectoral funds, XME looks like a good bet. The ETF invests in US-based metals and mining companies. It has a diversified portfolio but steel companies account for almost 44% of the holdings. Aluminum companies are the second-largest holding at 15.6% followed by gold companies at little above 14%. The ETF could be a good way to play the boom in commodities like steel, aluminum, and copper.
XME is a good ETF to play the infrastructure story
With the Biden administrations set to spend heavily on infrastructure investments, demand, as well as prices of materials, should get support. XME is down from its 52-week highs amid the correction in metals and mining stocks and the dip could be a good opportunity to buy this ETF.
XME has assets of around $2 billion with average daily traded volumes of over 5 million which is quite liquid. The fund has a gross expense ratio of 35 basis points. XME could be a good ETF to play the momentum in metals and mining stocks.
67% of all retail investor accounts lose money when trading CFDs with this provider.
4. Financial Select Sector SPDR Fund (NYSE: XLF)
The financial subsector of the S&P 500 has outperformed in 2021 and XLF is up over 25% so far. The outlook for the fund looks good considering the positive outlook for banking and financial stocks. Bank stocks could end up surprising on the upside in the second half of 2021 amid low delinquencies and high income from trading and investment banking.
XLF is a diversified way to play the financial space. It has found strong support at the 100-day SMA (simple moving average) while the 50-day SMA has been a resistance. The 14-day RSI (relative strength index) is neutral at 44.9. It has assets of over $40 billion while the average traded volume is over 51 million units daily.
US banks are set to increase their dividends in the second half of the year after the green signal from the Federal Reserve. With the earnings season approaching, XLF looks like a good ETF to buy and bet on the positive earnings surprise by US banks.
67% of all retail investor accounts lose money when trading CFDs with this provider.
5. iShares Core High Dividend ETF (NYSE: HDV)
If you are an investor who craves high dividends, HDV will fit the bill. Currently, the S&P 500’s dividend yield is running near multi-year lows due to several factors. These include the inclusion of Tesla, dividends cuts by S&P constituents, and the steep rise in the index without a commensurate increase in dividends. However, HDV will give you exposure to high dividend stocks. The ETF has outperformed the S&P 500 in 2021 and could continue to do so in the second half of the year.
HDV looks like a good buy
HDV has been trading in a narrow price channel between the 50-day and 100-day SMA. While the 50-day SMA has been a resistance, the 100-day SMA has been a support. The 14-day RSI looks neutral at 47.3 and indicates neither overbought nor oversold positions.
HDV has assets of over $7 billion but the trading volumes are just around 325,000 units every day. The ETF has an expense ratio of 8 basis points and has 74 holdings which make it very diversified. The weighted average PE multiple is 23.3 while the 3-year beta is 0.93 which implies a lower risk than broader markets.
67% of all retail investor accounts lose money when trading CFDs with this provider.
