Nvidia has been a major player in AI with substantial revenue growth, but may face challenges ahead. Intel and AMD pose competition, while customers like Amazon and Meta are creating their own AI accelerators. Nvidia’s margins and revenue growth are not sustainable in the long run, but software revenue could bring the next wave of growth.
Category: Investment
Vanguard Active ETF Launch No Game Changer
Vanguard has announced the launch of six new actively managed ETFs and a mutual fund, tracking factors like momentum and low volatility. This move wasn’t surprising, as Vanguard had already launched similar products in London and Canada. The competitive pricing and quantitative approach are expected to drive adoption, but significant impact on the market is unlikely in the early stages.
SHLD: The Intersection Of Defense And Tech
The Global X Defense Tech ETF (SHLD) focuses on investing in defense technology, including cyber, AI, and military systems. With 34 US and international holdings, it aims to capture the growth potential of the defense technology sector. Although there are potential risks, such as regulatory factors and technological advancements, SHLD presents a compelling long-term investment opportunity.
Copper Decouples From Base Metals & Oil Market Movements
Copper prices are diverging from base metals and oil, rising while other metals fall. This independence offers investment opportunities like the Sprott Copper Miners ETF (COPP) and the Sprott Junior Copper Miners ETF (COPJ). With the S&P GSCI Copper index and Bloomberg Copper Subindex increasing, miners may see future benefits. [Source: ETF Trends]
SPYD: Underperforming Dividend ETF Due To Sector Weighting
The article discusses the assessment of SPYD, a dividend-focused ETF, and its performance. It highlights the fund’s diverse portfolio, sector vulnerabilities, limited dividend growth, and underperformance compared to alternative ETFs. The high dividend yield makes SPYD suitable for income-dependent investors, but its sector weighting and lack of technology exposure may lead to continued underperformance in price appreciation and total return.
U.S. Dividend Payouts Ramp Up in 1Q24
Investors may consider adding dividend strategies to their portfolios as U.S. dividend payments hit an all-time high in 1Q24. Companies globally are increasing payouts, with U.S. firms like Disney, Meta, and T-Mobile driving the trend. This could benefit dividend-focused ETFs like VIG and SCHD, with total payouts projected to reach $1.72 trillion in 2024.
For Midstream, It Pays to Have Natural Gas Storage
Storage for natural gas is experiencing increased demand and higher rates due to current market conditions. Companies with storage capacity can benefit from arbitrage opportunities and higher contract renewal rates. This is driven by factors such as a contango in the natural gas prices curve, creating opportunities for storage businesses to thrive and consider expansion projects.
The Medium-Year Case for Active Small/Midcap ETF TMSL
Investors seeking ETF options for the rest of 2024 can consider the TMSL small/midcap ETF due to potential interest rate cuts. With a 50/50 split between small and mid-sized companies, an active approach, and promising returns, this ETF may offer dynamic growth opportunities and a blend of growth and value styles for the remainder of the year.
As Advisors Underweight Large Cap Growth, Try FDG
Many advisor portfolios are underweight in large cap growth, missing out on potential returns. The American Century Focused Dynamic Growth ETF (FDG) offers active large-cap growth exposure, with a 35.8% return over the last year, outperforming its benchmark. FDG’s active approach and scrutiny of funds help navigate the large-cap growth world amid potential tech bubbles and market outlook changes.
SCHX: Not Necessary To Own This Fund
The SCHWAB U.S. LARGE-CAP ETF (SCHX) holds 750 top U.S. stocks but slightly underperforms the S&P 500 index. Its strong performance since late 2022 still trails the index. With similar portfolios, SCHX’s underperformance may be due to its larger number of stocks. Given this, owning SCHX for diversification purposes seems unnecessary.
Tariff Hikes On Chinese EVs May Prove To Be Futile
The Biden administration plans to increase tariffs on Chinese electric vehicles, solar panels, and batteries for EVs, aiming to protect the American clean-energy industry. Although this move could impact the Chinese EV sector, its effect is expected to be limited. China may respond with retaliatory tariffs on U.S. EVs and agricultural exports, potentially impacting global markets and U.S. automakers.
As U.S. Consumers Run Out of Steam, Look to Emerging Markets
Recent data suggests that the U.S. consumer is facing challenges, with issues such as declining wage growth, reduced savings, and slowing discretionary spending. This, coupled with concerns about interest rates and inflation, may prompt investors to consider diversifying into emerging markets. American Century Investments’ Avantis offers ETF options like AVEM and AVXC to address this situation.
SCHE: I See More Downside Than Upside For Emerging Markets (Rating Downgrade)
The article evaluates the Schwab Emerging Markets Equity ETF (SCHE), noting its under-performance and unattractive prospects due to high exposure to China and Taiwan. With better opportunities in developed markets and concerns about elevated interest rates, the outlook for SCHE is downgraded to “hold.” The recommendation is to approach new positions in SCHE selectively.
JPMorgan’s New JADE ETF Highlights Emerging Markets
J.P. Morgan launched the JPMorgan Active Developing Markets Equity ETF (JADE) with a focus on emerging markets. The fund aims to provide long-term capital appreciation through emerging markets equity securities, with a net expense ratio of 0.65%. Seeking opportunities beyond the U.S. borders, the ETF applies a bottom-up fundamental approach and may invest in a variety of sectors and industries.__JETPACK_AI_ERROR__