2020 will be remembered as one of the wildest years in recent memory, both from a financial markets standpoint and life in general. 2021, however, could be a different story. If the markets keep betting that a COVID vaccine will be available sometime in 2021 and the economy is on track for a recovery, it could be a big year for dividend ETFs.
Why? In an economic rebound, value and cyclical stocks tend to outperform – two areas of the market that are often overweight in dividend funds. Financials, energy and industrials could perform particularly well and that would provide a big boost to many dividend stocks, particularly high yielders.
But it will likely be a picker’s market. Investors probably won’t be able to invest in any old dividend ETF and expect market-beating returns.
Also: 10 Top Dividend ETF Picks For 2021
Here’s my list of top tech ETF picks