I’ve received questions from readers that either can’t or don’t want to purchase individual stocks, but would like to mimic the COVID90 portfolio with an ETF/Mutual fund.
If you have access to a wide array of funds, then you could cobble together a half dozen sector specific indexes that target the industries that haven’t yet fully recovered from COVID. To name a few:
- Energy (XLE)
- Finance (KBE)
- Leisure & Entertainment (PEJ)
- Airlines (JETS) or Aerospace (ITA)
The simplest route would be to purchase a couple broad based Value funds like Vanguard’s Value Index (VTV) or their Small Cap Value Index (VBR). The potential gains won’t be as extreme with the broader based indexes, but that’s because they’re less volatile. The below chart indicates that the Small Cap Value upside for a return to pre-COVID normality is about 13%.
Bottom line is that Value (in any sector) has underperformed the general Market and is forming a multi-year “hook & barb” chart pattern…which presents the setup for a potential bullish breakout.
If you find these ALERTs informative, please share them with a likeminded friend.
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