High interest savings, top cannabis stock picks & US equity ETFs

Top savings accounts, cannabis stock picks and US equity ETFs

In today’s edition of the Gist by AskFinny, we’re sharing tips on highest APY savings accounts, top cannabis stock picks, and insights on the most popular domestic equity ETFs.  In our last post, we shared tips on Warren-Buffet-style stock stocks, optimizing your after-tax earnings, and tools for comparing different funds and ETFs.  If you missed it, read it here.  

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In this edition, you’ll find out: 

  1. Which banks and fintechs offer the highest yield savings accounts?

  2. Cannabis adoption is a secular trend--but which stocks show the most promise at this point in time?  

  3. What are the most popular domestic US equity ETFs to consider investing in? 

So let’s start with the summary of our findings.

Summary

1. We have a new winner in the high-yield savings space: it’s Betterment, offering 2.69% APY on savings, and your money is FDIC insured.  Here is the chart representing high-APY savings accounts

2.  We’ve researched the cannabis market and stocks showing most potential (at this point in time).  Here is a summary of our research:  

3.  Guess what?  Money is smart!  The most popular domestic ETFs (measured by net assets) are those with low fees and returns in line with the benchmarks, like the S&P 500.  Here is a summary chart:

The size of the bubble on this chart is proportional to the fund’s net assets.  Now let’s expand on this and share with you our detailed thinking. 

Deep Dive 

1. The new “winner” in the high-yield savings space is Betterment, which offers up to 2.69% APY.    

Betterment’s push into savings products follows the launch of a similar offering by another fintech startup Wealthfront, which offers an APY of 2.57%. Also, The brokerage app Robinhood announced a savings product last year that wasn’t vetted by regulators and had to be retracted.

One word of caution.  Betterment and other fintech startups are under the scrutiny of  regulators, who are asking for more clarity around the launch of bank-like savings products.  U.S. senators sent a letter to SEC Chairman Jay Clayton saying they were concerned that fintech companies may be dodging regulatory scrutiny. 

2. What is the market outlook for cannabis stocks? And which stocks show the most potential? 

The legalization of cannabis is a secular movement and is gaining momentum. In the United States, 11 states and Washington, D.C. have legalized recreational cannabis.  35 states have legalized medical cannabis or products that are low in THC and high in CBD. 

Canada has already legalized recreational cannabis last year, with distribution continuing to expand. Internationally, more and more countries have recognized the benefits of medical cannabis and are expanding access.

Most cannabis stocks are trading at very high multiples.  We screened all cannabis stocks and are sharing two picks you should further research if you’re interested in investing in cannabis:

  • Canopy Growth (CGC) provides attractive exposure across all world markets (from Colombia to Lesotho), and is partnered up with key consumer goods companies and brands (Constellation Brands, Martha Stewart and Snoop Dogg).

  • Curaleaf (CURLF) provides pure-play exposure to the U.S. market, where we expect to see growth in both recreational and medical cannabis.

3.  The most “popular” US equity ETFs, measured by net assets are:

  • SPDR S&P 500 (SPY)

  • iShares Core S&P 500 ETF (IVV)

  • Vanguard Total Stock Market ETF (VTI)

  • Vanguard S&P 500 ETF (VOO

  • PowerShares QQQ Trust, Series 1 (QQQ)  

Here is also the table to their returns, expense ratios and net assets:

You can get this view if you ask Finny for top ETFs (go to AskFinny and type “top ETFs”).  

Here are some key differences among those five ETFs:

  • SPY, IVV and VOO all track the S&P 500.  There are some slight differences in returns and expense ratios among these three ETFs, but for the most of it, they are very comparable to one another. 

  • VTI covers the total US investable stock market: over 3,500 stock holdings which are weighted by the market cap.   

  • QQQ tracks the Nasdaq-100 index (i.e., top tech stocks). It’s costlier than the S&P 500 ETFs, but it has also generated a higher return than those.     

That’s it for this edition.  What would you like to hear about in our next Gist?  Ask us a question here.

The AskFinny Team