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4 Top Advisor ETF Picks For 2021

Cinthia Murphy | | Dec 18th, 2020

Financial advisors are in the trenches when it comes to making sense of markets and finding the right investment solutions for various client investment goals.

With that in mind as we approach a new calendar year, we ask some of them what’s top of mind in their ETF universe.

Here, three advisors share some of their top ETF picks and best investing ideas for 2021.

Sam Huszczo, founder and investment advisor, SGH Wealth Management, Southfield, Michigan

Top Pick: Invesco S&P SmallCap Quality ETF (XSHQ)

We view the quality factor in small cap stocks as a modern refresh to the size factor in the making of Fama-French 2.0.

The empirically verified size factor, which refers to mid- and small cap stocks generally outperforming large cap stocks, has been disappearing since the early ’90s due in part to increased competition. This dilution is seemingly restored if one can control the junkiest of the junk through screening for metrics like earnings quality and leverage.

By avoiding the “lottery ticket” equities in the small cap space, the robust size premium is present across more historical periods, across different industries and different measures of size. This, along with 2020 being all about the mega cap stock, gives us confidence that small cap stocks will continue the progress they made in Q4 2020, and further close the gap with large caps moving forward.