How Are Industrial ETFs Expected To Perform In 2021?

Amid the pandemic, the central bank has pledged to hold rates at a near-zero level and will continue with the asset purchase program at the current rate until “substantial further progress” is made to reach a state of healthy inflation and maximum employment levels. Thus, the second trench of coronavirus-aid package, an ultra-dovish monetary stance maintained by the Fed and record low benchmark interest rate of 0-0.25% are making a stronger case in favor of the industrial sector in 2021.

Moreover, there are speculations about a bigger stimulus package after President-elect Joe Biden takes over the administration and with a Democrats-controlled Senate, the Biden administration might not have to compromise much for getting the funds passed. Further, Fed officials project U.S. economic growth at a rate of 4.2% this year.

It is worth noting here that the American multinational investment bank and financial services company Goldman Sachs (GS) has increased its U.S. economic growth forecast by 0.5 percentage points for 2021 as it expects the Democratic control on the Senate to make it easier for the introduction of a bigger stimulus package in the first quarter of 2021. Goldman Sachs expects a relief package of around $750 billion, including $300 billion in stimulus checks for jobless Americans, according to the same article.

Industrial ETFs to Watch 

Against this backdrop, investors can still keep a tab of the following ETFs (see all industrial ETFs here):

The Industrial Select Sector SPDR Fund XLI

The fund tracks the Industrial Select Sector Index (read: ETF Sectors to Consider for Rotating Out of Tech in 2021).

AUM: $15.87 billion

Expense Ratio: 0.13%

Vanguard Industrials ETF VIS

The fund tracks the MSCI US Investable Market Industrials 25/50 index (read: 5 Big ETF Stories of 2020 Worth Watching in 2021).

AUM: $3.80 billion

Expense Ratio: 0.10%

iShares U.S. Industrials ETF IYJ

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