Latest news with #ETFs
Yahoo
6 hours ago
- Business
- Yahoo
Global ETF Industry Sees Record New Launches in H1 2025
As of the end of June, 1,308 new exchange-traded funds hit the global market in 2025 compared to just 878 during the same period last year, according to data from independent research and consultancy firm ETFGI. The record number exhibits just how appealing the low-cost, convenient wrapper is to investors. There were 266 closures of ETFs during the first half of 2025, resulting in a net increase of 1,042 ETFs. 'The rapid proliferation of new ETFs is a response to evolving investor preferences for cost-effective, transparent and flexible investment vehicles, coupled with ongoing innovation by asset managers to meet diverse investment needs and capitalize on market trends,' Deborah Fuhr, managing partner and founder of ETFGI, told 'The ETF market is highly competitive, and launching new products is a key strategy for providers to gain market share and attract inflows.' Global ETFs by the Numbers; iShares Leads So far in 2025, the United States has led the way in new ETF launches, with 481 new ETFs introduced, compared to 296 during the first half of last year and 205 during the first half of 2023. The Asia Pacific region (excluding Japan) came next with 399 new ETFs so far this year, while Europe had 198. BlackRock Inc.'s (BLK) iShares was responsible for 42 of the 1,308 new ETFs, followed by Global X with 36 launches and First Trust with 27. A total of 326 different providers debuted new ETFs during the first half of the year. The global ETF market also reached a record high in terms of assets invested, with $17 trillion at the end of June, surpassing the previous record of $16.3 trillion set in May. Year-to-date inflows totaled $897.7 billion, ETFGI found—another record high. Why ETF Issuance Is Surging Fuhr said there has been a surge in actively managed ETFs and that providers are launching thematic ETFs, such as those focused on industries like artificial intelligence or clean energy. Innovation in ETF structures, including those that use derivatives or provide exposure to digital assets, such as spot Bitcoin ETFs like the iShares Bitcoin Trust (IBIT), is expanding the range of options available, and funds that focus on specific factors like value, quality, momentum, size or minimum volatility are also gaining traction. She said asset managers are adapting to a noticeable shift in investor preference from mutual funds to ETFs by launching ETF versions of their existing mutual fund strategies, and a supportive regulatory environment in various regions is facilitating the growth and innovation within the ETF market.
Globe and Mail
6 hours ago
- Business
- Globe and Mail
Contra Guys: It can be advantageous to cast a wide – and global
How much of your portfolio is invested overseas? This is an important question, especially in a year such as this one, when many European stock indexes are beating North American benchmarks, including the S&P/TSX Composite Index. Though many Canadians are overweight in Canadian stocks, we remain true to our contrary roots and try to avoid home-country bias. Investing in our home market can have certain tax advantages, and avoids foreign exchange rate volatility, but it can also reduce diversification, increase risk and impact returns. Ultimately, it is a big world out there, and it can be advantageous to cast a wide net. This is why we make a habit of investing in exchange-traded funds and equities that do business around the globe. One such ETF is the Global X MSCI Greece ETF GREK-A, which tracks the performance of the MSCI All Greece Select 25/50 Index. Here at Contra the Heard Investment Newsletter, we took a stake in GREK in October, 2015. Back then, the Greek financial crisis was rumbling into its seventh year and few investors wanted to touch the country. The government had just negotiated its third bailout package, introduced capital controls and then-Prime Minister Alexis Tsipras had won a surprise re-election. These actions tempered the surging value of credit default swaps and yields on government debt, but the nation remained on the cusp of default. Gross domestic product had fallen from US$352.1-billion in 2008 to US$194.6-billion in 2015, the unemployment rate was around 25 per cent and the banking sector was on life support, as roughly 47 per cent of all loans were non-performing. To illustrate just how bad the Hellenic banking crisis was, during the peak of the 2008-09 U.S. financial crisis, America's non-performing loans were only 7.5 per cent. Amid these economic depression-like conditions, the Greek stock market sank to one of the cheapest in the world and we took a stake. Not only was it inexpensive, but we figured the Troika (a decision-making group composed of the European Commission, European Central Bank and International Monetary Fund) would not let Greece fail. The Troika had already bailed out the country three times and, within the context of the European Union, Greece was too big to fail. Once the ETF was in our portfolio, we practised patience. While corporate turnarounds take time, national ones can take even longer. In 2023, I wrote about the Greek ETF for The Globe and Mail. At the time, I argued the ETF was still cheap and the country was performing well thanks to a series of reforms that had cut the national debt, streamlined regulations, reduced tax avoidance, digitized government processes and put the banks back on their feet. Earlier: Greece's stock market is on a tear - and this ETF tracking it is poised for even more gains Fast forward to the present day and the turnaround has turned into a growth story. Greece regained an investment-grade credit rating in late 2023, the country's debt-to-GDP ratio has fallen from more than 200 per cent to 153.6 per cent and it produced a budgetary surplus of 1.3 per cent of GDP in 2024. By contrast, the euro zone average was a deficit of 3.1 per cent. The Greek government surplus is even more impressive given that most European countries have been spending just over 2 per cent of GDP on defence while Greece spent approximately 3.1 per cent last year. This should serve Greece well as the North Atlantic Treaty Organization alliance moves toward a new 5-per-cent target. Aside from government finances, the rest of Greece's economy is doing well too. The unemployment rate has fallen to under 8 per cent, the household-debt-to-GDP ratio has fallen from nearly 67 per cent to 39 per cent since the financial crisis and the financial sector's non-performing loan balance now stands at under 4 per cent. The banks have done so well that they now account for more than half of the GREK ETF versus around a quarter a decade ago. Despite all the success, Greece is not without risk. The debt-to-GDP ratio is still high, the nation continues to score poorly on the Corruption Perception Index despite recent advances and it has continuing problems with its neighbours in Turkey. The legal system is also a congested and inefficient mess. According to the EU Justice Scoreboard, it takes Greek courts over 600 days to conclude civil and commercial cases. By contrast, Denmark takes less than 20 days and most European countries take around 100 days. This means it can take years for a trial to reach a conclusion – assuming there is no appeal. These timelines slow down business, drive away foreign investment and leave parties impacted by court cases in a state of limbo. At its core, Greece faces poor demographics as well. The nation's fertility rate is roughly 1.3 births per woman, it suffered years of net emigration during the financial crisis and the median age, currently in the mid-40s, is climbing fast. This means that Greece's population, which peaked over a decade ago, is expected to fall in the decades ahead. Moreover, Greek society will get materially older; this will leave fewer working-age people to support retirees, health care infrastructure and pensions. All in all, however, Greece has more going for it than against it, and the turnaround over the past decade has been a resounding success. The outlook is positive and the GREK ETF could rally much further. We recently trimmed our position in GREK for a 109.2-per-cent gain. Locking in this profit recouped our initial investment but leaves plenty of skin in the game to benefit from future price appreciation. Today, GREK sports a yield of over 4 per cent and blends strong momentum with low stock valuations. These are excellent characteristics, especially when coupled with the underlying economic conditions. Our plan is to let the ETF run, look for valuations to increase further and sell the rest of our stake in slices. Once it is sold entirely, we will continue to avoid home-country bias, deploy the winnings in a new overseas investment and, with any luck, repeat the success. Philip MacKellar is the general manager at Contra the Heard Investment Newsletter.
CNBC
6 hours ago
- Business
- CNBC
Hedge funds are operating inside ETFs, with some big risks and potential benefits for investors
It's not exactly a new trend, but more hedge fund-like strategies continue to be launched as ETFs, promising investors returns uncorrelated to traditional stock and bond market indexes. For investors, the key is understanding the exact investing style of each (that can vary widely under a general "hedge fund" brand); how its differs from traditional stock and bond investments; how much it charges in fees, and whether there are equally good, and cheaper ways, to seek diversification in the market over the long-term. Historically, hedge fund strategies were limited to the ultrawealthy and institutional investors who could meet high investment minimums, but that has changed. There is now over $5 billion in assets under management in ETFs using some form of hedging and aiming for uncorrelated, diversified returns, according to data. These products are often classified as alternative absolute return strategies, offering investors an alternative to the stock or bond performance tracking the big market benchmarks, such as the S&P 500 Index and Bloomberg Aggregate Bond Index . Hedge fund ETFs can range from event-driven strategies, to multi-strategy portfolios and managed futures funds. The newest are from the Unlimited lineup up ETFs, founded by a former investment committee member at the world's biggest hedge fund, Bridgewater Associates. It recently launched global macro, long-short and managed futures strategies, all charging 0.95%. While no comparison can be made between what these funds are trying to do and the goal of an S&P 500 index fund like Vanguard's VOO , investors do pay a lot more for the access to alternative investment strategies. Vanguard's S&P 500 ETF has an expense ratio of 0.03%. Mike Akins, CEO of ETF Action, says that these strategies can be unique, and useful. "The idea of most of these strategies is you're going to get uncorrelated, diversified returns. So, you can get an absolute return strategy that's supposed to perform in all market cycles," he said. "You're creating kind of a diversification tool within your overall portfolio, the opportunity to generate solid returns, but in an uncorrelated fashion to your traditional equity and bond markets," he added. Funds that track major market benchmarks such as the Russell 1000 or S&P 500 should all have very similar performance, so choosing one of these ETFs versus another across all of the ETF managers that offer versions of them won't influence performance much, if at all. But with managed futures, event-driven or multi-strategy funds, Akins said there can be a huge divergence in returns across funds and over different time periods. He said a review of the recent performance from this category shows that some do produce negative correlations to the broad equity markets, but others purporting to achieve uncorrelated returns have extremely high correlations to major market benchmarks. "All these different strategies, even though they have very similar sounding names, the results and the way they're going about trying to achieve results are very, very different," Akins said. That leads Akins to conclude that in most cases, these kinds of ETFs are better left for professional investors to consider. "Generally speaking, they're probably best used in the hands of a financial professional that understands how they're putting it into a client's portfolio," he said. Strategas senior ETF and technical strategist Todd Sohn says that while the fees are higher than many core ETFs, accessing these strategies within a retail fund wrapper is the only way most investors can gain access to the more sophisticated trades. "Access is a pro, and then you're also getting what should be an uncorrelated strategy to your typical 60/40 stock and bond portfolio," he said. "It'll move in a different direction on a given day. It'll help offset, maybe, any losses." He added that while there are no guarantees it can lead to outperformance versus tradition portfolio structures, "ideally, it acts as a little bit of a push in certain environments." But Akins says that transparency is a factor, as these hedge fund-like structures can be hard for most investors to understand. "They're running very unique strategies. It really does become more of the due diligence of the manager selection process versus just understanding what's being done and held inside of the portfolio like a normal ETF or bond portfolio," Akins said. "The level of due diligence that needs to be done is much higher for this type of strategy," he said. Sohn said the complexities inherent in these funds is a factor that investors need to educate themselves on before including in a broader portfolio mix. "There's a little bit more nuance in them, and they can go long and short, they can play in very different asset classes, like commodities." Sohn said. "So there needs to be a little bit of an education component, and that complexity can sometimes scare people off," he said. Akins said it's fair to consider whether alternatives can take the place of traditional fixed income as a diversifier at a time when investors are concerned about the bond market's ability to serve in its traditional role, say up to 10% to 15% in an alternative bucket. "But if you're going to do that, you really, truly need to understand how it reacts," he said. "Is it truly providing you with uncorrelated returns? Is it making the overall risk in your portfolio decrease? Because if it's not, you're paying a lot," he added. The average expense ratio for the alternative ETF space tracked by is 92 basis points (0.92%), with some portfolios a bit below that but others well above 1%, even 2% in some cases, Akins said. "Unless it's truly delivering uncorrelated returns across the market, it's not worth the extra money," he said. He stressed that this does not mean alternative strategies are like some "Wild West" in the ETF market. "They're defined strategies. They're defined categories. But the way you go about implementing a managed future strategy, or the way you go about implementing a multi-strategy portfolio, putting all those different alts ... event-driven, managed futures, global macro [together], the way you go about doing that is very different for everybody," he said. Managed futures funds, for example, are all over the place in returns year-to-date, with some ETFs in the space up as much as 3% and others in the same category down more than 10%. "There's a reason those things have been kind of isolated to accredited investors or the wealthy," Akins said of the history of the hedge fund industry. It is not just the complexity of the strategies, but the fact that they serve a greater role in protecting existing wealth from market downside than growing wealth. For the average investor looking to grow their wealth over the long-term rather than protected the wealth already accumulated, these strategies often do not make as much sense, Akins said. Broad-based bond ETFs and low-volatility stock ETFs might be enough for most investors as a way to diversify risk over the long term in portfolios. "If I'm a 30-year-old looking to invest in the markets, and I just want I know it's going to be invested in my IRA or my taxable brokerage account for the next 30 years, these are not going to provide a benefit," he said. "For somebody with accumulated wealth, and the most important thing is to create a portfolio that protects the downside, then that's where these types of strategies really start to play a role in a portfolio. But it's not a YOLO [you only live once] type product," he said. Watch the video above to learn more about how hedge funds strategies are being replicated in ETFs. Sign up for our weekly newsletter that goes beyond the livestream, offering a closer look at the trends and figures shaping the ETF market. Disclaimer
CNBC
7 hours ago
- Business
- CNBC
During earnings season, two ETFs may signal how bullish investors feel about U.S. economy and consumer
Concerns about the consumer are still running high on Wall Street, even after the market's big comeback to a new record from the tariff-triggered downturn of April. While the worst fears about Trump's trade policies and inflation have not come to pass, Goldman Sachs is among Wall Street firms expecting a growth slowdown and a more cautious consumer ahead. As earnings season picks up, one simple market gauge on how bullish or bearish investors are on the consumer can be found in the performance of consumer discretionary and consumer staples ETFs. As Todd Sohn, senior ETF and technical analyst at Strategas Asset Management explained it on a recent CNBC "ETF Edge" podcast, "If discretionary is outperforming, that means auto, retails, homebuilders, are working against toothpaste and toilet paper. Adversely, if the staples are outperforming, that means the market does not like the earnings and would suggest a more defensive tone," said. Into earnings season, consumer discretionary ETFs have outperformed consumer staples. Over the past month, top consumer discretionary ETFs have outperformed consumer staples funds, such as the First Trust Consumer Discretionary AlphaDEX ETF (FXD ) and Fidelity MSCI Consumer Discretionary Index ETF (FDIS ). Looking at the oldest and broadest consumer funds in the ETF space, within the Select Sector SPDR family that tracks all of the major sectors within the S&P 500 on a stand-alone basis, there's been a reversal in performance of late. The Consumer Staples Select Sector SPDR (XLP ) is up 4% this year but only 1% in the past month. The Consumer Discretionary Select Sector SPDR (XLY ), meanwhile, is up over 5% during the past month while trailing staples year-to-date. The recent outperformance of discretionary continued through the first week of earnings season. Some of the top consumer staples ETFs in recent trading, meanwhile, have been narrower in focus, such Invesco's small-cap consumer staples ETF (PSCC ) and the Invesco's equal-weighted S&P 500 consumer staples portfolio (RSPS ) which stands out from the market-weighted XLP.
Yahoo
8 hours ago
- Business
- Yahoo
5 Most-Loved ETFs of Last Week Amid Rising Market
ETFs across various categories raked in $19.2 billion in capital last week, bringing year-to-date inflows to $613 billion. The space remains on track to set a new annual record in terms of appetite was broad-based. U.S. equity ETFs led the way with $9.8 billion in inflows. International equity ETFs attracted $5.3 billion in capital while currency ETFs saw $5 billion in inflows. SPDR S&P 500 ETF Trust SPY, iShares Bitcoin Trust IBIT, Vanguard S&P 500 ETF VOO, iShares Ethereum Trust ETF ETHA and Simplify Government Money Market ETF SBIL dominated the top creation list last week.U.S. stock markets witnessed an upward trend last week, with the S&P 500 climbing 1% and hitting a new all-time high. The rally was fueled by encouraging economic indicators. June's inflation figures came in line with expectations and retail sales exceeded forecasts. So far, second-quarter corporate earnings have also outperformed projections. However, trade tensions continue to linger. Investors remain cautious ahead of the upcoming August 1 tariff deadline, which could bring new sector-specific levies (read: S&P 500 Remains Rock-Solid: Will the ETF Rally Last?). We have detailed the ETFs S&P 500 ETF Trust (SPY)SPDR S&P 500 ETF Trust is the top asset creator, pulling in $4.2 billion in capital. It tracks the S&P 500 Index and holds 502 stocks in its basket, with each accounting for no more than 7.8% of the assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector with a 33.8% share, whereas financials and consumer discretionary round off the next three spots with a double-digit allocation S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 72 million shares. It has an AUM of $647.6 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk Bitcoin Trust (IBIT)iShares Bitcoin Trust raked in $3 billion in capital last week. It seeks to reflect the performance of the price of Bitcoin and has been the most traded Bitcoin ETF since its launch. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. IBIT has AUM of $87.5 billion and trades in an average daily volume of 50 million shares (read: IBIT on Fire: Inside BlackRock Bitcoin ETF Rise).Vanguard S&P 500 ETF (VOO)Vanguard S&P 500 ETF has gathered $3 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, each accounting for no more than 7.3% of the assets. Vanguard S&P 500 ETF is heavy on the information technology sector, while financials and consumer discretionary round off the next two spots with a double-digit allocation each. It charges investors 3 bps in annual fees. Vanguard S&P 500 ETF has an AUM of $701.8 billion and trades in an average daily volume of 6.7 million shares. VOO sports a Zacks ETF Rank #1 (Strong Buy) with a Medium risk Ethereum Trust ETF (ETHA)iShares Ethereum Trust ETF saw inflows of $1.5 billion. It seeks to reflect the performance of the price of Ethereum. ETHA is managed by the world's largest asset manager and leverages a multi-year technology integration developed with Coinbase Prime, the world's largest institutional digital asset custodian. ETHA has AUM of $8.5 billion and trades in an average daily volume of 31 million shares. It charges 25 bps in annual fees (read: Ethereum ETFs Surging Rapidly: What Lies Ahead?).Simplify Government Money Market ETF (SBIL)Simplify Government Money Market ETF pulled in about $1.2 billion in capital last week. It seeks current income consistent with liquidity and stability of principal and operates as a government money market fund pursuant to Rule 2a-7 under the Investment Company Act of 1940. Simplify Government Money Market ETF charges 15 bps in annual fees and has amassed $1.2 billion in its asset base since its debut in July. 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 SPDR S&P 500 ETF (SPY): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research 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
