4 Mutual Funds Set To Gain From The Great Reopening

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Investors have shown immense positivity over the past three months as Wall Street’s decent performance highlights an economic rebound from the COVID-19 slumps. Major indexes have notched all-time highs on building optimism on drop in coronavirus cases, progress in vaccination and upbeat economic data.

The U.S. economy grew at an annualized rate of 6.4% in first-quarter 2021, surpassing the consensus estimate of 6.1%. It marks the second-fastest pace for growth since the second quarter of 2003, while in fourth-quarter 2020, GDP accelerated 4.3%. On the consumer’s side, U.S. consumer confidence hit a one-year high in March and has risen for the second consecutive month in April. The Conference Board reported that the index of consumer confidence climbed to 121.7 in April, showing an 11.7% jump from the previous month’s revised figure of 109.

Additionally, for the week ending Mar 24, initial claims dropped to the lowest level since the coronavirus outbreak, falling to 553,000. The decline in initial claims shows that the labor market is recovering as businesses restart hiring employees with the easing of pandemic-induced restrictions.

Investment Themes Aligned With Economic Reopening

Investors had gravitated toward thematic investing during the pandemic, specifically due to technological transformation owing to lockdown measures. While some of those themes will continue to remain active investment strategies in the rest of 2021, themes aligned to economic reopening are also gaining importance. The top themes to play a critical role are travel & leisure, energy, financials and industrials.

The vaccination-led economic reopening along with substantial stimulus from the government has paved the way for the U.S. economy to make significant recovery in the second quarter. Though Americans are retaining some of the stay-at-home habits, there is an increased need to step out for more than just getting groceries and essentials. With restrictions being lifted, restaurants, pubs, sports arena are reopening and customers are enjoying hanging out with friends and family in outdoor dining spaces.

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