This year's best-performing ETFs have little in common, but they center on three red-hot themes: China, cannabis and genomics.
div > div.group > p:first-child"> They center on three red-hot themes: China, cannabis and genomics, a branch of biotechnology that uses DNA to try to treat or eliminate diseases like cancer. Largely, these groups underperformed last year but are making a rapid comeback.Here's what experts think of these markets and the ETFs within them:
"My vantage point is that China trades at, like, 12 times earnings. S&P [500] is, like, 17 times earnings," he said."And if you look at earnings growth, you've got triple the amount of earnings growth for [the iShares MSCI China ETF, or MCHI] compared to the S&P 500. So risk-reward, you've got a margin of safety when you're buying China. So it's our biggest overweight in our portfolios. We like emerging markets.
"You can ... go against that and use more single-country-oriented ETFs from iShares, or from Franklin, or from other providers that are out there, to underweight China in the portfolio," he said.Davi compared the recent boom in marijuana stocks to the dot-com bubble of the late 1990s, when a slew of internet stocks went public to lofty valuations before many of them proved to be unprofitable and collapsed.
"[Cannabis is] not legal here in the United States on a federal level, and then there's a handful of states where it is, so you are investing in Canadian stocks — that's important — and you're investing in a thematic approach to it," he said.
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