Investors could be looking for the hottest sectors to invest in for the second half of 2021. One way to play the hot sectors is to invest in ETFs, or exchange-traded funds, to get exposure to many stocks in one sector that could benefit.
Here is a look at five ETFs that could have a strong second-half performance in 2021.
Defiance Hotel, Airline and Cruise: Launched on June 2, the Defiance Hotel, Airline and Cruise ETF (NYSE: CRUZ) targets the travel reopening trade by investing in several sectors that could benefit from more consumers leaving their homes. The ETF cites COVID-19 costing the travel industry over $3.3 trillion in missed revenue. The travel itch and pent-up demand are expected to boost the sectors tracked in the fund.
The ETF has 43 holdings, with top holdings including Marriott International (NASDAQ: MAR) at 7.9%; Hilton Worldwide Holdings (NYSE: HLT), 7.8%; Carnival Corp (NYSE: CCL),6.7%; Delta Air Lines Inc (NYSE: DAL), 6.5%; and Southwest Airlines (NYSE: LUV) at 6%.
Roundhill Sports Betting & iGaming: With more states having legalized sports betting, stocks in the sector could benefit from strong college football and NFL seasons.
The sports will also have more games to bet on in 2021 including preseason and more college games, which could increase the betting handle. The Roundhill Sports Betting & iGaming ETF (NYSE: BETZ) is the pure-play ETF for the sector holding stocks that have sportsbooks, online gaming operations or the technology that powers these two sectors.
The ETF holds 40 stocks from 13 countries and just passed the one-year milestone. Top holdings in the ETF include Entain at 4.9%; Scientific Games Corp (NASDAQ: SGMS), 4.9%; Pointsbet, 4.3%; Kindred Group, 4%; and Flutter Entertainment, 4%.
Investors get exposure to many international companies that don’t trade in the U.S. or trade OTC. Other top-10 holdings include DraftKings Inc (NASDAQ: DKNG), Rush Street Interactive (NYSE: RSI) and Penn National Gaming (NASDAQ: PENN).
Related Link: 3 ETFs To Watch WIth Increased Restaurant Spending
U.S. Global Jets ETF: An ETF covering the global airline industry could be a way for investors to play the increased number of travelers over the last couple months that could continue into the second half of the year.
The ETF has 39 holdings with the top four holdings representing almost 40% of assets. Top holdings include Delta Air Lines at 9.9%; United Airlines Holdings (NASDAQ: UAL), 9.8%; Southwest Airlines, 9.7%; American Airlines Group (NASDAQ: AAL), 9.4%; and Hawaiian Holdings (NASDAQ: HA), 3%. The ETF is up 20% year-to-date but could continue to make gains as a pure play way to get exposure to the growth of the airline industry.
Procure Space ETF: A pure play ETF for the growing space economy, the Procure Space ETF (NASDAQ: UFO) could be a fund to watch in the second half of 2021. The fund launched in 2019 and now holds 36 stocks that get 50% of their revenue from space related stocks.
Top holdings in the ETF include Orbcomm Inc (NASDAQ: ORBC), Globalstar Inc (AMEX:GSAT), Virgin Galactic Holdings (NYSE: SPCE), Maxar Technologies Inc (NYSE: MAXR) and Iridium Communications Inc (NASDAQ: IRDM).
The space industry is growing with reusable rockets cutting down launch costs.
Fund manager Andrew Chanin told Benzinga this creates a trickle down effect to make it cheaper for companies to access space. “That opens up tremendous business opportunities,” Chanin said.
Global X FinTech: An ETF dedicated to the growth of emerging financial technology is the Global X FinTech ETF (NASDAQ: FINX). The fund launched in 2016 and now has 55% of assets from U.S. companies and the rest to international companies.
Top holdings in the ETF include Square Inc (NYSE: SQ), Paypal Holdings (NASDAQ: PYPL) AfterPay, Intuit Inc (NASDAQ: INTU) and Adyen. The ETF is up over 40% in the last 52 weeks but remains up less than 3% year-to-date in the first half of 2021. The ETF could see a rebound in the second half of 2021.
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