Bloomberg Intelligence's top ETF expert names 21 funds that tap into the stock market's biggest themes for the rest of 2021 — and explains why investors should consider each one

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"I've always found that if you find 10 stocks you really like and buy three, you always pick the wrong three. So I just buy all 10," the investing legend Peter Lynch once said.

If Lynch has trouble picking individual stocks, the average investor probably does as well. One way to avoid that problem altogether is to buy ETFs, which let you invest in anywhere from a few dozen to a few hundred stocks all at once. 

ETFs allow investors to track the performance of an industry, an index, or even a commodity, and can be a great way for investors to gain exposure to the latest market trends. But which ETFs should investors be watching? 

Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, compiled a list of the 21 ETFs that he and his team are keeping a close eye on this year. These are the ETFs that correlate with popular market themes, including SPACs, cryptocurrencies, and more. During the recent Bloomberg Wealth Summit, Balchunas broke down what he likes about each of these ETFs and why investors may want to watch them closely for the rest of 2021.

Ticker: ARKK

Balchunas' comment: "This thing is a juggernaut, and what it really showed was if you really swing for the fences you can actually overcome the drought and the outflows that have hit active managers."

"Part of the reason for that is a lot of portfolios have gone cheap beta for the core, and then they decorate it with things that are totally opposite beta. We call them shiny objects, and so Ark has become something that you would put on to your cheap beta. And so we can tell in the flows that most of the money goes to cheap beta. But a good section of it goes to the sort of really high active share. And, of course, the performance helps and you have all that come together and Ark has been a juggernaut."

"The question is, can they keep it up? A lot of the flows came in recently and you can see, you know, when flows come into a hot strategy, a lot of times, it doesn't really work as well after. We'll see what happens. Right now I think she's flat this year, but it's something to watch. She is going to keep expanding her universe of ETFs, you can see that there's eight ETFs now, just launched the space one."

"So Ark is something we're always going to watch. It's a very interesting active strategy."

Ticker: GBTC

Balchunas' comment: "This is GBTC, it's not an ETF. It's an over-the-counter traded trust. And it's going to have a lot of premium and discount action. That said, it's really a sign of this race for Bitcoin ETFs and until a Bitcoin ETF launches, the flows in this have been pretty good. I think it has $30 billion at this point, which is a lot."

"There's now nine ETFs filed, we'll see if they get launched. We think September 30th is when we'll probably see the first Bitcoin ETF. If and when that happens, look for some people to leave GBTC or look for GBTC to convert to an ETF. Anyway, this is probably the biggest story going on right now in ETFs."

Ticker: SNPE

Balchunas' comment: "There's a lot of ESGs out there. We find the ESG [ETF] that's going to work the best is the ESG that is the most benchmark aware. So if you look at the holdings of this SNPE, it's like a lot of BlackRock ETFs as well. It's going to hold a Facebook and Exxon, and that's going to turn off some hardcore people."

"But we think that the returns that are similar to the S&P will make a lot of advisors and institutions more comfortable. So we think that's probably where you're going to see the assets. We also like clean energy. Again, stuff that's very different than the index. So, TAN and ICLN and those are ones we're also watching."

Ticker: VXUS

Balchunas' comment: "So international has been left behind in the past 10 years and an ETF like this we're starting to see a lot more flows into as people rebalance into it. It's lagged the US market by a ton here, so has emerging markets."

"You know, these flows and this rebalancing is going to start to add up at some point and we have seen a little bit of a shift to value in some of the left behind areas. So we're watching VXUS for this international play."

Ticker: FPX

Balchunas' comment: "We're also watching this IPO ETF, as well 5.5 this SPAC ETF [below]."

"A lot of people think of SPAK as the SPAC ETF but SPCX is actually the better one, or I should say the more pure one, because it only holds pre-IPO SPACs. So these are the ones that are real micro caps before they announce what company they're going to acquire. SPAK holds mostly post-IPO SPACs. So this is the one we're watching and now it's the biggest SPAC ETF. People are noticing it because they want that purity."

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