
The market just gave investors a gift. Here's how not to blow it, according to investing experts
The stock market has come full circle from its April lows, with all of the losses suffered now recovered. For investors who long defied warnings about being over-exposed to U.S. stocks, especially with the dominant position of a handful of tech stocks in the S&P 500 , the rebound in portfolios is a good opportunity to do what many had neglected to do in the past: diversify into international equities and other asset classes.
'You got a gift from the market gods,' said David Schassler, VanEck head of multi-asset solutions, on last week's 'ETF Edge.'
'We want to see people diversify, diversify internationally and into real assets as well, specifically gold and if you're into it, also diversify into bitcoin,' he said.
Some investors already got the message early in 2025, as the period from January to April saw most major markets around the globe leave U.S. stocks behind in performance. Vanguard's Total International Stock Index ETF ( VXUS ), as an example, has net inflows of over $6 billion this year, according to ETFAction.com, which places it No. 11 among all ETFs in flows this year. But to put that into perspective, Vanguard's S&P 500 ETF ( VOO ), is now over $63 billion in inflows this year.
In fact, VOO is on pace to blow away the record for annual inflows it set just last year.
As investors who bought the dip in U.S. stocks are rewarded, ETF experts say those who have stuck with an S&P 500-heavy tilt and didn't enjoy the drawdown experience of April should still use this opportunity to look at portfolio balance. 'If your portfolio is predominantly U.S. [stocks], we want to see you diversity in international as well as emerging markets,' Schassler said.
Read More China vows to boost domestic demand in bid for 2024 recovery
Investing icons of the recent past, from Warren Buffett to Jack Bogle of Vanguard Group, broadcast a message that focusing on U.S. stocks over the long-term is the best bet. Bogle, in particular, often said the S&P 500's multi-national corporate makeup delivers plenty of overseas revenue itself. But even Buffett has been lightening up on some big U.S. market positions, while adding to more of his more recent bets on Japan.
'We're not anti-U.S., but just saying if you are predominantly invested in the U.S., you probably want to invest outside as well,' Schassler said.
U.S. stock valuation remains concern as investors rush back in
Valuation in the S&P 500 remains a primary concern for experts who say this is a good time to make sure a portfolio is properly diversified. According to Schassler, with the recovery in stocks, the U.S. market is 'priced richly.'
He added that even as recession risks have declined after the U.S.-China temporary trade truce, the risks remain higher than the historical baseline. 'We're not calling a recession, but risk is high,' he said on 'ETF Edge.'
The price to earnings ratio in U.S. stocks reinforces the message that there is 'lots of value overseas,' he added.
In Schassler's view, the big shift in U.S. government policy on a global basis is also a secondary catalyst for more diversification. As the world becomes more bifurcated, and countries are forced to move forward on their own and push their own growth, investors are in a backdrop that favors more growth from lower valuation international stock markets, he said.
Todd Rosenbluth, head of research at VettaFi, said on 'ETF Edge' that this year has shown more investors embracing international diversification, though he added that we are 'not fully seeing it' in the market yet. He also says investors should use this moment to be mindful of the concentration within their U.S. stock holdings.
'The flows have certainly been favoring the U.S. and investors been buying the dip are being rewarded,' Rosenbluth said. 'We've seen growth equities rebound much more strongly, those tech and consumer discretionary oriented sectors,' he said.
The iShares S&P 500 Growth ETF ( IVW ) is up nearly 18% in the past month, while the iShares S&P 500 Value ETF ( IVE ) is up about 8%, according to ETF Action.
IVW has a P/E ratio above 33, compared to a P/E ratio of 21.5 for IVE.
Rosenbluth says a good way to deal with the valuation and concentration risk within a U.S. portfolio is to invest in 'quality' stock funds, such as offerings that seek to tweek growth and value more than in the S&P 500 as a whole, such as VictoryShares' Free Cash Flow ETFs.
'We might not see this rally continue on the growth side so you want to have balance in the portfolio,' Rosenbluth said.
China, India and emerging markets
Both ETF experts said as global trade sentiment improves, investors should look at China and India as part of any international diversification plan.
Schassler said China is aggressively stimulating its economy, and India is one of the best growth stories in the world, 'like China 20 years ago,' he said. 'Having China and India exposure makes sense,' he said.
Rosenbluth said there was strong interest in China at the beginning of the year, and in ETFs such as KraneShares' CSI China Internet ETF ( KWEB ), but he described that momentum as now 'faded.'
KWEB is still a good option for investors interested in China in this environment, Rosenbluth said, because it is still one of the largest of the China-focused growth-oriented ETFs, and is less likely to be negatively impacted from China tariffs. It is a 'China-only' story as opposed to a broader Chinese stock fund with exposure to multi-national businesses. KWEB is up 14% of the past month, and in the past week it saw close to $100 million in flows, compared to net outflows over $800 million during the prior three months, according to ETF Action.
On India, there are multiple options for investors, including the iShares MSCI India ETF ( INDA ), as well as Van Eck's Digital India ETF (DGIN).
Schassler said the structural growth story in India is the reason to invest. 'You've got a huge population, it's tech savvy, well-educated, and the government is supporting the economy, so everything lines up there for a growth story,' he said.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
26 minutes ago
- Yahoo
S&P 500 Just 2% From All-Time High as Beijing Talks Continue
June 10 - The S&P 500 moved slightly higher Tuesday and now sits about 2% below its all-time high of 6,147.43, as investors watch the second day of U.S.-China trade negotiations unfold in London. Officials have yet to share firm outcomes, but U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick both said initial talks were constructive, without disclosing specific progress. List of 52-Week Lows List of 3-Year Lows List of 5-Year Lows Export restrictions remain a central issue. The U.S. is reportedly pressing China to boost shipments of rare earth materials critical for semiconductors, smartphones, and EVs. In exchange, Washington may ease curbs on American exports of chipmaking gear, aircraft parts, and ethane, according to the Financial Times. Last year, U.S. goods exports to China totaled $143.22 billion, while imports reached $438.74 billion, leaving a trade gap of $295.51 billion. For 2025, the deficit is already $88.02 billion through April. Investors are watching closely, as the outcome of the talks could impact supply chains and global tech stocks. This article first appeared on GuruFocus.
Yahoo
28 minutes ago
- Yahoo
Is Fidelity Select Gold Portfolio (FSAGX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Sector - Precious Metal fund could think about starting with Fidelity Select Gold Portfolio (FSAGX). FSAGX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance. FSAGX is classified in the Sector - Precious Metal segment by Zacks, an area full of potential. Sector - Precious Metal mutual funds normally invest in stocks focused on the mining and production of precious metals such as gold, silver, platinum, and palladium. Often times, stocks here trade as leveraged bets of the underlying commodity, so they are tied to the prices of the metal, and can be quite volatile, too. FSAGX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Select Gold Portfolio made its debut in December of 1985, FSAGX has garnered more than $1.84 billion in assets. The fund is currently managed by Ryan Oldham who has been in charge of the fund since November of 2024. Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 7.95%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.23%, which places it in the bottom third during this time-frame. It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower. When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, FSAGX's standard deviation comes in at 30.47%, compared to the category average of 16.61%. Over the past 5 years, the standard deviation of the fund is 29.73% compared to the category average of 16.28%. This makes the fund more volatile than its peers over the past half-decade. With a 5-year beta of 0.54, the fund is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a positive alpha of 2.16. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns. For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FSAGX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 1.04%. FSAGX is actually cheaper than its peers when you consider factors like cost. This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment. Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included. Overall, even with its comparatively weak performance, worse downside risk, and lower fees, Fidelity Select Gold Portfolio ( FSAGX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now. Want even more information about FSAGX? Then go over to and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FSAGX): Fund Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research

Yahoo
37 minutes ago
- Yahoo
BofA institutional clients dump stocks at historic rate, retail keeps buying
-- In its latest equity client flow trends note, Bank of America analysts revealed a notable divergence in equity flows, with "Institutional selling accelerat[ing] vs hedge funds & retail buying." Last week, despite the S&P 500 rising 1.5%, BofA's clients were "modest net sellers of U.S. equities," driven by single stock sales, though ETFs saw inflows. The selling was primarily fueled by "institutional clients, who have sold for five weeks straight." BofA states that "Cumulative selling by this group YTD is the largest of any comparable period in our data history and the largest since '17 when normalized by market cap." In contrast, "Hedge funds were buyers for a second week," and "Private clients also were buyers and have now been buyers in 25 of the past 26 weeks (a record buying streak in our history)," said the bank. Corporate client buybacks also "accelerated week-on-week and were above typical seasonal levels for the first time in four weeks." Clients divested from stocks in five sectors, with "Staples," "Financials," and "Comm. Services" leading the outflows. Conversely, "Consumer Discretionary saw the biggest inflows, with inflows for 7 straight weeks (the longest recent buying streak of any sector)." A preference for domestically oriented sectors over globally-exposed ones was also observed, with clients being "bigger buyers (or smaller sellers) of domestics for the last six weeks." BofA's valuation work suggests that tariffs and de-globalization are largely "priced in" for domestically-oriented stocks. In the ETF space, clients reportedly bought for the first time in three weeks, favoring "Blend and Value ETFs" while selling "Growth ETFs." Related articles BofA institutional clients dump stocks at historic rate, retail keeps buying Here's why Citi says Apple stock is 'set up well' for 2026 BAM selloff called 'tactical buying opportunity' by Scotiabank