The pandemic is still top of mind. But the bear-market sell-off that it sparked is now a distant memory, thanks to one of the fastest rebounds in history. Yet volatility remains. Market sentiment shifts with the trendline in new COVID-19 cases and any news, good or bad, of a vaccine. It’s a crucial election year, too, which can move markets in unexpected ways. Even so, investors now realize a true market resurgence hinges on an economic recovery and a revival of corporate profits.
Despite a market buffeted by big moves and clouded by uncertainty, the past year has been huge for exchange-traded funds, those increasingly popular low-cost securities that hold baskets of assets and trade like stocks. Assets in ETFs topped $4 trillion last year, ahead of the $3.8 trillion in index mutual funds. In October, most brokerage firms eliminated commissions to trade shares in ETFs (and stocks), too, which fueled asset flows. The final stamp of approval came from the federal government itself.
The Federal Reserve invested billions of dollars in 16 investment-grade and high-yield corporate bond ETFs between May and June as part of a program to prop up the bond market. “It’s an interesting moment for ETFs,” says Rich Powers, head of Vanguard’s ETF product management. The Fed chose ETFs as a way to support the bond market for the same reasons individual investors favor these securities. “They’re efficient, low-cost and cover the breadth of the market they invest in,” says Powers.
Esta historia es de la edición September 2020 de Kiplinger's Personal Finance.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición September 2020 de Kiplinger's Personal Finance.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
My Top 30 Index: An Update
A year ago, I put together what I called \"my own reinvention\" of the Dow Jones industrial average, the popular 142-year-old large-cap index.
Balance Your Risk and Reward
These new ETFs let you cut stock market losses. But you'll sacrifice some gains.
IS A HYBRID CAR RIGHT FOR YOU?
Hybrids offer a fuel-saving option for drivers who have reservations about all-electric vehicles. But there are trade-offs.
HOW TO REACH YOUR INVESTING GOALS
Patience helped these four investors make their portfolios work for them.
WHERE TO INVEST NOW
Expect a lot of midyear churn, with a rally toward the end of 2024.
TIPS FOR FINANCING A HOME PROJECT
I recently had a call with a client who was looking to fund the construction of a swimming pool at his house.
MORE WOMEN THAN EVER ARE STARTING BUSINESSES
Retail and travel businesses, along with health, beauty and fitness, are popular with women entrepreneurs.
Finding Home Health Care
It’s important to hire a caregiver you trust.
UNDERSTANDING BOND FUND YIELDS
What's a 30-day SEC yield? A trailing 12-month yield? A yield to maturity? We explain what each measure says about an income fund.
ANSWERS TO YOUR QUESTIONS ON STUDENT LOANS
If you have federal student loans, you may benefit from new government policies. Here's what you need to know.