Latest news with #AniketUllal
Yahoo
4 days ago
- Business
- Yahoo
Investors taking on more risk through defense, international ETFs
In the latest installment of Yahoo Finance's ETF Report, Invesco's Nasdaq 100 ETF (QQQ) and the iShares Russell 2000 ETF (IWM) are seeing some recovery from April's tariff-induced sell-offs. CFRA Research head of ETF research Aniket Ullal examines the investor behaviors driving ETF inflows, noting the growth in defense funds and international market ETFs. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Since the early April tariff induced sell-off investors are piling back into risk on trades with both Invesco's NASDAQ 100 pegged ETF and IShares small caps ETF both back in positive territory. But, there are still concerns ahead especially when it comes to the dollar still being under pressure. For this, I want to bring in Aniket Ullal, CFRA's research's head of ETF research. This week's ETF report brought to you by Invesco QQQ. Aniket, great to have you here. Uh talk to me about what you're seeing in the flows. It seems like investors are buying a little bit of risk in everything. Well, uh we try to look at both performance and flows in tandem because sometimes flows can lag uh performance. From a performance perspective what you said earlier is absolutely right. We saw bottom on April 8th, which was of course the date when President Trump paused reciprocal tariffs. Since before that date in the year, you know, SPY was down 18%, uh IBIT the Bitcoin ETF was down significantly, as was QQQ which is really the best proxy from an ETF perspective for the AI trade. All of those ETFs have bounced back significantly since then, most of them 20 plus percentage, in the case of uh IBIT more than 30%. So, from a performance perspective we have seen investors really go back and kind of take on more risk. To your point about the flows, there are certain categories where we've seen significant inflows, uh defense ETFs is one of them, utilities flows another. So, you know, both from a flows and performance perspective, it's a much healthier environment now for ETF investors than of course early April. Yeah. And talk to me about those flows into defense ETFs. What is that signaling to you about sentiment? I I That I think is really driven by what's happening in the uh budget reconciliation process. If you look at the budget there's another $150 billion allocated uh to defense. This is on top of the $850 billion, of course, in annual spending that's funded through a continuing resolution. So, you know, this includes $27 billion for the golden dome project which President Trump has kind of talked about quite a bit. Um so, this really benefits of course the large um defense contractors. You know, we've got ETFs like ITA, which provide exposure to the big defense contractors. But, there's also another huge component here which is software automation process automations benefits firms like Palantir, and ETFs like PPA, which are kind of broader in terms of their defense exposure and hold some of the software and kind of process automation companies actually benefit a lot from the defense trade. So, we actually think PPA is a good proxy, which is an Invesco defense ETF, for the kind of broader defense play when it comes to uh benefiting from the budget reconciliation process. That's that's a really great overview. I want to uh have you do the exact same thing but for international ETF flows. What are you seeing there? And what is it indicating to you about where, or I guess how convicted investors are in the narrative that international is going to continue to outperform U.S.? It's going to be interesting to see how patient investors are with international. In the past we have seen investors sometimes go to international when we've seen some seen some weakness in the U.S. and then pull back. So far, this year flows have been very strong particularly within uh Europe, and we starting to see in in emerging markets, emerging markets ex China be kind of an interesting trade. Within Europe of course, Germany is one of the engines of Europe. Uh we've seen stimulus in Germany in terms of, you know, 500 billion Euro um infrastructure uh build, you know, spending allocation. Uh we've seen defense stocks really lead that. And the way we think about European allocation is it's really a complement to U.S. allocation because U.S. ETFs are very very tech uh dominated, very dominated by the AI trade. If you look at European ETFs in general, they tend to have less than 5% to 10% of their exposure to IT. It's a lot more financials, it's a lot more industrials. And industrials really benefit from some of the stimulus we talked about. So, we think European trading is here to stay, but it's really non tech driven. It's much between industrials and financials play. Mm yeah. So given that, because the U.S. continues to win when it comes to large cap tech uh how much is the U.S. equity market sort of relying on a dollar snap back in order to have some sort of catalyst to new or all time highs? I think I think your intro, you know, you said it well, which is that is this 2020, probably not. Because you know, there are factors that are different now than than we saw last year, right, which was the very AI driven trade. Now we've got dollar weakness. We've got much more of course driven by uh tariff uncertainty. So, if this year we've seen the dollar, if you look at a trade weighted basket uh index of the dollar against trade weighted basket of currencies, it's down about 5% to 6% this year. That's That's actually improvement from a couple weeks ago. And because of that we've seen money go into uh currency ETFs, you know. You look at ETFs like FXY, which is kind of a uh Yen USD uh trade that's taken in over $400 billion. FXE, which is the Euro USD pair, uh is taken in $300 million. So, we have seen investors kind of go into currency ETFs as a way to capture some of this dollar depreciation. We have seen dollar depreciation moderate a little bit, but I think there's a lot we need to watch in the next couple of weeks particularly with what happened with the pause on tariffs on July 9th and how that plays out. Aniket, really appreciate you joining us. Thank you so much. Thank you.
Yahoo
4 days ago
- Business
- Yahoo
Investors taking on more risk through defense, international ETFs
In the latest installment of Yahoo Finance's ETF Report, Invesco's Nasdaq 100 ETF (QQQ) and the iShares Russell 2000 ETF (IWM) are seeing some recovery from April's tariff-induced sell-offs. CFRA Research head of ETF research Aniket Ullal examines the investor behaviors driving ETF inflows, noting the growth in defense funds and international market ETFs. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
BlackRock's ‘Widow Maker' ETF Is Suddenly in High Demand
With a nickname like 'widow maker,' you'd think investors would stay away. The iShares 20+ Year Treasury Bond ETF (TLT), which got its moniker because of its recent poor performance — took in $1.3 billion assets in the past week, according to CFRA Research. Since long-term Treasury bonds are more susceptible to the effects of interest rate changes as they mature, short or intermediate bonds are often more appealing. And for TLT, if investors bought the fund five years ago, they would have lost some 45% of their original assets, according to the Financial Times. But, it looks like long-term products are increasingly on the menu. 'TLT is often used by investors to buy the dip when they think [Fed interest] rates have peaked,' said Aniket Ullal, head of ETF Research & Analytics at CFRA. 'We may be seeing similar behavior here since inflation numbers have been fairly benign recently.' READ ALSO: Nasdaq Wants to Wrap This $11.5B Altcoin in an ETF and Vanguard's 2 New Muni ETFs Have an Advantage Over Mutual Funds The bond market had a small win last week as both 20-year and 30-year Treasury yields began trading just below 5%, the first time since May 20. And while President Donald Trump doesn't have the authority to lower interest rates, he's made his position well known, recently telling Fed Chair Jerome Powell he's making a 'mistake' by not lowering them. Plus, who could forget all that volatility? All this could be contributing to TLT's momentum. 'Investors in long-term Treasury bond ETFs like TLT will win if the US economy weakens significantly and investors believe the Fed will need to cut rates aggressively,' said Todd Rosenbluth, head of research at VettaFi. However, he noted that TLT doesn't have the strongest track record, and taking on significant duration risk has not been rewarding for investors: Over the past five years, the fund has taken in roughly $50 billion in inflows, per VettaFi data. But, its performance is down nearly 50% in that same time. 'Timing this trade can be very difficult,' Ullal told Advisor Upside. This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-05-2025
- Business
- Yahoo
India ETFs Slip After News of Strikes in Pakistan
India exchange-traded funds softened Wednesday and Thursday after news that India hit multiple targets in Pakistan, but so far the weakness has been muted. According to news reports, India's military said these strikes were in response to a deadly attack in Indian-controlled Kashmir on April 22 and that they targeted 'terrorist infrastructure' and were 'focused, measured and non-escalatory in nature.' Pakistan, however, called Wednesday's strikes 'an act of war.' The three biggest India ETFs by assets, the $9.1 billion iShares MSCI India ETF (INDA), the $3.1 billion WisdomTree India Earnings ETF (EPI) and the $2.1 billion Franklin FTSE India ETF (FLIN) were down about 1% on Wednesday and have started Thursday's trading on a back foot. Stock markets in India were also down. Many India-focused ETFs are flat to up on the year, with INDA up 2%, FLIN up 1.1% and EPI flat. Indian ETFs have had a strong run in the past few years as the country's economy has boomed. On a five-year annualized basis, EPI is up 23.2%, FLIN rose 19% and INDA is up 17.7%. The volatility is a reminder that emerging market ETFs are often subject to higher geopolitical risk than developed market ETFs for a variety of reasons. However, the Kashmir area which borders India, Pakistan and China is one of the most volatile regions globally. All three countries will end up having minor skirmishes at times, and sometimes those escalate, said Aniket Ullal, head of ETF research and analytics at CFRA Research. Ullal said the saber-rattling between the two countries bears watching, especially since both India and Pakistan have nuclear weapons. So far, investors don't seem to be too worried about the situation, he added. 'India and Pakistan have always found a way to kind of navigate the conflict, and I think there's too much economically at stake for both players to escalate it beyond a certain point, unless something unpredictable happens,' he said. Ullal pointed to 2019, when India struck Pakistan in response to a bombing in Kashmir and Pakistan retaliated with its own airstrikes, according to news reports. At that time, the reaction in the stock markets was not overly bearish. If investors can stomach some geopolitical risk, Ullal said India has the potential for both short-term and long-term growth. Compared to other emerging markets, it has better domestic growth. And in the long term, it may be a beneficiary of the tariff regime under the Trump administration, which targets China more than other countries, he said. That could take longer to play out, he added. Ullal pointed to two India ETFs that are heavily focused toward India's domestic economy—the $316 million Columbia India Consumer ETF (INCO), which is down 0.6% year to date and up 20.6% on a five-year basis, and the $699 million iShares India 50 ETF (INDY), up 4.7% year to date and up 16.4% on a five-year | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
25-04-2025
- Business
- Yahoo
BlackRock Files for Two More Mutual Fund-to-ETF Conversions
BlackRock Inc. (BLK), the world's largest asset manager, plans to convert its BlackRock GA Disciplined Volatility Equity Fund (BIDVX) and BlackRock GA Dynamic Equity Fund (BIEEX) to exchange-traded funds, according to a recent filing with the Securities and Exchange Commission (SEC). The two equity mutual funds will be reorganized into the iShares Disciplined Volatility Equity Active ETF and the iShares Dynamic Equity Active ETF, respectively, on Sept. 12. The expense ratios will be 0.4%, and both funds will retain their current objectives and managers and maintain 'substantially similar' strategies. 'Active ETFs are becoming an integral part of investor portfolios around the world, with financial advisors increasingly incorporating them into their practices,' a BlackRock spokesperson told 'BlackRock's decision to convert a mutual fund into an ETF underscores this growing demand and our commitment to aligning the strategies we offer with the investment vehicles that best suit our clients' needs.' There has been a significant shift from long-term mutual funds to ETFs in recent years. In 2024, mutual funds (excluding money market funds) experienced $579 billion worth of net outflows, while $1.1 trillion moved into ETFs, according to CFRA Research. ETFs have structural advantages that in some cases make them more appealing than mutual funds, Aniket Ullal, head of ETF research and analytics at CFRA, explained to They have an in-kind creation/redemption mechanism that provides tax advantages over traditional mutual funds, tend to have lower expense ratios and trade like stocks on exchanges, providing intraday tradability. 'ETFs in the U.S. generally don't have distribution fees and sales loads, unlike some mutual funds,' Ullal added. '[And] there are more ETFs than mutual funds that provide targeted exposure to specific sectors, factors and themes.' Last year, Bank of America Global Research reported that funds that convert from mutual funds to ETFs attract an average of $500 million in new money within two years of conversion, reversing previous outflows. Wall Street is taking note. J.P. Morgan Asset Management and Leuthold Group are among firms that have made mutual fund-to-ETF conversions this year, following in the footsteps of Dimensional Fund Advisors, which helped create the playbook for these types of conversions. BlackRock made its first conversion in November, reorganizing the $755 million International Dividend mutual fund into the more flexible wrapper. 'We continue to see use cases for mutual funds and view ETFs and other investment vehicles as complementary, as they often serve distinct client segments and play different roles within a client's portfolio,' the BlackRock spokesperson | © Copyright 2025 All rights reserved Sign in to access your portfolio
