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Looking Back, Looking Forward – January 03, 2021

Despite being down over 30% at their low for the year, U. S. stocks ended at a record high. Some ETFs, Fidelity funds, and S&P 500 stocks raked in eye-popping gains in this topsy-turvy environment. Here is a list of the best of the best, along with what to look forward in 2021.

The S&P 500 ended 2020 at a record high. The toll of the pandemic on human life continued to increase throughout the year. Corporate earnings contracted sharply. Yet, economic aid packages from Congress, near-zero interest rates, and the development of COVID-19 vaccines at warp speed helped stocks to advance.

Here, we look at what ETFs, Select SPDRs, Fidelity funds, and S&P 500 stocks returned the most in 2020.

Best ETFs of 2020

Cryptocurrency, clean energy, and biotechnology were themes that worked well in the ETF world.

  • Grayscale Ethereum Trust (ETHE)       +442%
  • Invesco Solar ETF (TAN)       +234%
  • Invesco WilderHill Clean Energy ETF (PBW)       +205%
  • First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)       +184%
  • ARK Genomic Revolution ETF (ARKG)       +181%

Best Select Sector SPDR ETFs of 2020

Technology and consumer discretionary Select Sector SPDR ETFs took the top positions after mega-cap companies like Apple and Amazon benefited from the pandemic-driven work- and shop-from-home trends.

  • Technology Select Sector SPDR (XLK)       +44%
  • Consumer Discretionary Select Sector SPDR (XLY)       +30%
  • Communication Services Select Sector SPDR (XLC)       +27%
  • Materials Select Sector SPDR (XLB)       +21%
  • SPDR S&P 500 ETF (SPY)       +18%

Best Fidelity Funds of 2020

Fidelity funds focused on Asia and the information technology sector claimed top honors. Ownership of Tesla shares helped the automotive fund. Fidelity Blue Chip Growth, a diversified large-cap growth fund, benefited from its stakes in FAANG and Tesla.

  • Fidelity Emerging Asia Fund (FSEAX)      +73%
  • Fidelity Select Technology Portfolio (FSPTX)      +64%
  • Fidelity Select Automotive Portfolio (FSAVX)      +62%
  • Fidelity Blue Chip Growth Fund (FBGRX)      +62%
  • Fidelity China Region Fund (FHKCX)      +48%

Best S&P 500 Stocks of 2020

Tesla shares surged over 700%. The S&P 500 index committee added shares of the electric carmaker to the benchmark on December 21. Shares of online retailer ETSY and digital payment platform PayPal benefited from the ‘stay-at-home’ trend.

  • Tesla (TSLA)       +743%
  • Etsy (ETSY)       +302%
  • NVIDIA Corporation (NVDA)       +122%
  • PayPal Holdings (PYPL)       +117%
  • L Brands (LB)       +105%

Looking ahead to 2021

Political events and economic data dominate the opening week of the new year.

* Congress convenes a joint session on January 6 to formally count the electoral college votes and confirm the next President. Some drama is likely at this usually low-key event. Supported by Vice President Pence, some Republicans have said they would vote to reject President-elect Biden’s victory.

* The control of the U. S. Senate hinges on the Senate runoff elections in Georgia on January 5. If Democrats win both runoff elections, the U. S. Senate would be evenly split between Democrats & Republicans and give Democratic Vice President-elect Harris the ability to tip the balance towards Democrats with her tie-breaking vote. Investors are comfortable with Republicans retaining control of the Senate and restraining Democrats from hiking tax rates.

* The Labor Department provides the December jobs report on January 8. The economy has lost steam from the reinstatement of restrictions prompted by the rapid increase in COVID19 cases in December. Weekly jobless claims ticked up last month. Economists expect the Labor Department to report about 100,000 job additions in December compared to 245,000 in November.

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