Each year, analysts at ETF Database assemble to debate the outlook for the coming twelve months. We capture the top five themes we believe are poised to shape the global financial markets in 2017.
Starting on January 16, 2017, we will unveil a detailed analysis on our investing themes for 2017 throughout the week.
For now, here is a sneak peek of our investing themes for this year.
1. Global Infrastructure
We will discuss why we believe global infrastructure will likely provide investors with excellent risk-adjusted returns. We will analyze reasons for increased demand for global infrastructure including the United States’ urgent need to upgrade its infrastructure as well as continued urbanization in emerging markets. We will delve into how interest rate expectations affect infrastructure investments. Use our ETF Screener tool to find and compare Infrastructure ETFs.
2. Precious Metals
As we move into an inflationary environment, holding some gold as an inflation hedge is a sensible precaution for investors. However, we will discuss why holding a basket of precious metals is a better inflation hedge than holding gold just by itself. We will illustrate the correlation between short-term interest rates and gold over the most recent multi-year rate hike cycle (2003 to 2007), and also explain why precious metals prices rise during a rising interest rate environment.
As Trump’s policies come into effect, and OPEC and non-OPEC countries freeze production at current levels, the energy sector will likely continue to outperform in 2017. We will explain why investors should have exposure to the energy sector, and explain how you can use ETFs to play this theme. We will also take an in-depth look at possible risks for the energy sector, to help you better navigate the potential volatility in the oil & gas industry in 2017. Be sure to take a look at our Energy ETF list for a full list of Energy ETFs.
4. Geopolitical Risk
2016 was a year of erratic markets and geopolitical shocks that sent fundamentals into the shadows. We will discuss why political risk exists today, and why it likely will continue to do so throughout 2017. We will cover geopolitical events such as Brexit, a potential United States vs. China trade war, and upcoming elections in France, Germany and South Korea, among other events. For each event, we will explain how investors can utilize ETFs to navigate geopolitical risk in 2017. Read How to Avoid These 3 “Political Risk” Trading Mistakes for ways to navigate volatility during geopolitical market-moving events.
5. Alpha Opportunities in the Technology Sector
We will highlight reasons why investors should have exposure to the technology sector. Specifically, we will analyze the following three segments of the technology sector and provide you with ETFs to play them: Artificial Intelligence, Internet of Things and Advanced Robotics.
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The Bottom Line
Stay tuned till next week as we prepare to unveil our detailed analysis on each of the aforementioned themes.