ETF Focus

I’m amazed by the number of people still talking about how the economy is in good shape right now and there’s a relatively small chance of recession. I damn near fell out of my chair when Janet Yellen said that there was “nothing” to suggest that there will be a recession in the United States (this is the same person, mind you, that said inflation wasn’t a risk either). Even The Economist, which is a pretty good publication, said that there wasn’t a chance of recession until 2024 and even then it would likely be mild.

Emerging markets still looking better than U.S. stocks right now. EM large-caps actually posted gains last week. All of the money is flowing into large-cap beta ETFs. No other group is even close.

Even as $ARKK is down more than 50% this year, investors haven't given up. Nearly $1.4 billion of net flows have moved into the fund in 2022, one of the best numbers among thematic ETFs.

If there is a “rock star” in the ETF industry, it’s probably Cathie Wood. Love her or hate her, she has undeniably become not only one of the faces of the ETF space, but the poster child for disruptive tech and innovation investing. Her investing style, however,...

Dividend aristocrats holding up well here even though they've lagged over the past month. The short-term sentiment reversal of the past couple weeks won't help, but the focus on quality and balance sheet health keep them attractive. $NOBL.

Equities were able to stop some of the bleeding experienced earlier in the year, but they're still struggling to make any meaningful progress. The major indices were relatively flat overall, but the range of returns depending on which sector or theme you're looking at was wide. On top of that, volatility remains elevated. That means investors are experiencing a wild ride with little in the way of returns to show for it.

$JEPI's process of adding protective puts to its covered call strategy doesn't just help generate an 8% yield. It provides significant downside protection. It's beating the S&P 500 by 7% year-to-date.

Dividend stocks and ETFs continue to dominate the broader market in 2022. All strategies - dividend growth, dividend quality and high yield - have beaten the S&P 500, but high yielders have far and away performed the best. The SPDR Portfolio S&P 500 High Dividend ETF (SPYD), which simply tracks the 80 highest-yielding stocks from the index has returned 6% year-to-date compared to a -14% return for the S&P 500. That's a whopping gap of 2000 basis points! Investors have responded by dropping more than $37 billion into dividend ETFs during the first five months of 2022.

2022 has been a year of pain for equity investors. Unless you've heavily pushed into energy stocks, there's probably a lot of red in your portfolio. Dividend stocks and ETFs, however, have done comparatively well. Most are still down on the year, but there are more than two dozen dividend ETFs in the ETF Action database that are in the green. Many are up only 1-2%, but I'm guessing most investors would take that in such a challenging market.

Note: If you're a frequent follower or reader of this site, you know that I often post ETF Guide's "ETF Battles" web series episodes. They've always included a roster of high level judges to assess and measure the ETFs featured, which is why I was excited to be invited to participate in ETF Battles as a judge!

Saying that there’s an asset class flashing a warning sign after some equity sectors are already down 20-30% or more is a little like saying you should try to swerve out of the way after the car accident has already happened. It seems a little obvious, but I also think there are signals that still aren’t nearly where they should be when looking at previous market bottoms.

The S&P 500 ESG Index just underwent its annual rebalance and reconstitution. Of course, it made news for who was left out as much as who made it in. The index begins with the S&P 500 and makes exclusions based on involvement in the following industries:. Controversial weapons. Thermal coal.

Quick note: Last week, I asked for ideas on the topics or ideas you’d like to see covered here and you didn’t disappoint! Some of these themes I’ll begin working to incorporate into these e-mails, including today’s. Some of the questions I may end up turning into an article that will go up on TheStreet, so be sure to keep an eye out for that as well. As always, keep the comments and questions coming! You can either comment on any of these newsletter posts or e-mail me at contact@etffocus.com. Looking forward to keeping the conversation going!

If you like market volatility, you probably loved last week. The Fed meeting that occurred during the middle of the week provided all the fireworks that were needed. The post-meeting Wednesday rally followed the Thursday turnaround was one of the biggest 2-day swings the market has seen in years. All told, the Dow traded in a range of more than 1,600 points. The VIX has closed above 30 for the 7th time in the past 8 trading days.

When you compare it to the 9% loss for the S&P 500 (SPY) or the 13% decline for the Nasdaq 100, dividend ETFs actually did really well in April. Two of the largest dividend ETFs out there, the Vanguard Dividend Appreciation ETF (VIG) and the Vanguard High Dividend Yield ETF (VYM), lost just 5% and 4%, respectively. With the markets turning south, investors pivoted back into more defensive investments and that meant dividend ETFs found a great deal of renewed interest for the first time in a while.

If you're one of those who are a big fan of Cathie Wood and the ARK ETF lineup, you've got another tool to demonstrate your conviction!. AXS just launched the AXS 2x Innovation ETF (TARK). It's designed to deliver twice the daily performance of the ARK Innovation ETF (ARKK). As...

The S&P 500 (SPY) just had its worst month since March 2020, falling 8.8%, but other major indices had it worse. The Russell 2000 (IWM) was down 9.9% and the Nasdaq 100 (QQQ) declined 13.6%. Dividend investors had a comparatively easier time of it. The Vanguard Dividend Appreciation ETF (VIG)...

Covered call ETFs usually only outperform their underlying benchmark index under a specific set of circumstances. Ideal conditions would mean stocks would move sideways with relatively low volatility. That would allow the fund to capture the premiums written without call options being exercised. The sideways movement of equities would help ensure that shareholders aren't losing capital in the process.

Note: If you're a frequent follower or reader of this site, you know that I often post ETF Guide's "ETF Battles" web series episodes. They've always included a roster of high level judges to assess and measure the ETFs featured, which is why I was excited to be invited to participate in ETF Battles as a judge!

If you’ve followed the financial media lately, it’s a lot of doom and gloom. I’ve largely been in that camp too and have repeatedly said that I don’t how the Fed is going to be able to raise interest rates to tackle inflation without swinging the U.S. economy back into recession. I think the base case is still that a reversal to negative growth probably won’t happen in 2022. There’s a narrow window that the Fed can work with, but they’ll really have to thread the needle.