SUMMARY In our view, international markets are less efficient, creating opportunities for active portfolio management. We believe a passive approach to international investing may lead to unintended sector concentrations. A surprising number of the best performing stocks in a given year are based outside of the US.
Recent re-openings in the United States and Europe have caused a surge in demand for energy as China’s manufacturing industry moves to meet the increase in orders .
Will the mid-market tech companies outpace big tech? Is there a limit to big tech’s unstoppable climb to trillion-dollar valuations ? The answer is looking more and more like yes. FAMGA—Facebook, Amazon, Microsoft, Google and Apple—have long used M&A as a mechanism to expand into new markets.
By Kevin Nicholson, CFA, Global Fixed Income Co-CIO, Co-Head of Investment Committee. SUMMARY We believe the Fed’s actions should not derail investors before it begins raising interest rates. We believe the trend and sentiment both suggest proceeding with some caution.Collectively, the three tactical rules still point to a pro-risk allocation, in our view.
Too much of a good thing can apply to equities exposure, and with exchange traded funds (ETFs) like the Invesco S&P 500® Equal Weight ETF ( RSP B+ ), holdings get equal billing to help balance portfolios. As Invesco’s website puts it, RSP prevents investors from “putting your eggs in one basket.” It can be easy to fall into the trap of allocating too heavily into one or more stocks to extract maximum gains, such as big tech heavy-hitters like Apple or Amazon.
Ten-year Treasury yields closed at 1.29% on Sept. 2. That’s well off the 52-week high of 1.76%, and over the past three months, yields on benchmark U.S. government debt are lower by 18.16%. That could be a recipe for upside, and that isn’t the upside many investors are looking for.
While inflation has been on investors’ minds for some time now, the timeframe for the Fed to make those dreaded adjustments may come sooner than expected, according to Dallas Federal Reserve President Robert Kaplan. Kaplan would like the Fed to state in September that it will start to adjust its monetary policy, citing that that the economy can be more autonomous.
Despite the stubbornly low rate environment, exchange traded fund investors have been loath to pick up speculative-grade, junk-rated bonds. The decision may be prescient as the boom in U.S. corporate borrowing has exposed the segment to increased defaults among financially risky companies.
It’s been on investors’ minds and tongues for some time now, and today the Federal Reserve finally mentioned a plan to begin tapering its asset purchases during the Federal Open Market Committee (FOMC) minutes. Federal Reserve officials at their July gathering discussed how they will start to curb the rate of their monthly bond buying most likely before the end of 2021, according to meeting minutes released Wednesday.
Seven months into 2021 and investors still hear plenty about the reflation trade. So much so that they may be led to believe that this is a domestic phenomenon. Actually, the reflation trade has global implications, and that’s a positive for international exchange traded funds with cyclical value positioning, including the ALPS International Sector Dividend Dogs ETF (NYSEArca: IDOG ) .
In what seems like a return to the market of a year ago, the last few weeks have seen defensive stocks outperform more economically sensitive stocks, like internet retailing stocks leading airline stocks, growth stocks leading value stocks and U.S. stocks leading international stocks.
Economic Overview Inflation remains the big story at the halfway point of 2021, as the base-effect impact of Q2 data wanes briefly before likely resuming in late Q3. The Fed’s insistence that the broad-based rise in prices is “transitory” has kept equity markets calm and bond yields subdued.
Infrastructure has become a huge topic with the current administration, which could give infrastructure-related ETFs a dramatic boost in the coming months. Infrastructure ETFs like the Global X infrastructure ETF (PAVE) , which is up over 20% year to date, could see significant increases in profitability as well.
Fundamental Context In the first quarter of 2021, more than half of dollar volume in ETF trading by insurance companies was in fixed income ETFs. This is impressive as the asset class represented 35% of year-end 2020 assets.
