Latest news with #KentThune
Yahoo
20-05-2025
- Business
- Yahoo
Money Flows Into International ETFs VXUS AVEM
As U.S. markets swing and investors grapple with credit downgrades, a trade war and inflation fears, billions of dollars are flowing into ETFs that invest in international and emerging markets companies. The largest ex-U.S. international exchange-traded fund, the $90.5 billion Vanguard Total International Stock ETF (VXUS), has of late pulled off an impressive feat: It has not seen a single day of outflows over the past 52 weeks. It's pulled in $11.7 billion over that period. Over the past month, VXUS has had $1.5 billion of inflows, and its last day of outflows was in February 2023. Emerging markets ETFs are also being snapped up by investors in some cases. The $9.7 billion Avantis Emerging Markets Equity ETF (AVEM) has over the past month pulled in $1.1 billion. Investors have bid up international ETFs this year as some believe the Trump administration's tariff war will force overseas companies to build domestic industries such as defense. VXUS has gained 14% this year compared with a 1.8% gain on the Vanguard S&P 500 ETF (VOO). Still, VOO has jumped 13% over the past month, topping the 8.8% increase for VXUS. AVEM's 10% gain this year has also topped VOO's return, while its one-month gain of 11% trails that of the big S&P 500 fund. Investors may be drawn to the potential for rising valuations in the ETF, with its average portfolio price/earnings ratio of 10.2, Research Lead Kent Thune, CFP, said. 'Looking under the hood of AVEM, the low average portfolio P/E is extremely attractive compared to the S&P 500's valuation, which is more than double that,' Thune said. Investors are also drawn to the fund's top holdings, which include Taiwan Semiconductor Manufacturing Co. (TSM), Alibaba Group Holding (BABA) and Tencent Holdings (TCEHY), he said. VXUS Net Fund Flows—Source: FactSet Still, VXUS may be seeing big inflows due to its status as the "workhorse" international ETF and its inclusion in robo-advisor and model portfolio schemes at Vanguard, said Daniel Sotiroff, CFA, Morningstar Direct senior manager research analyst. He added that while VXUS and AVEM are outperforming VOO, mutual fund and ETF flows still favor U.S. investments. He said April mutual fund and ETF inflows of $2.9 billion into the foreign and large blend category were lower than typical, and overall emerging markets ETFs and mutual funds had outflows of $3.6 | © Copyright 2025 All rights reserved
Yahoo
03-04-2025
- Business
- Yahoo
IVV's Shot to Become World's Biggest ETF Nears
As markets hit a 10% correction earlier this year, the Vanguard S&P 500 ETF (VOO) became the world's largest ETF, replacing the SPDR S&P 500 ETF Trust (SPY) from a position it had held nearly nonstop since its introduction as the first U.S.-listed exchange-traded fund in 1993. Then, just weeks later, the iShares Core S&P 500 ETF (IVV) bumped SPY down to third place. Those who watch this kind of horse race may wonder what's going on among the three largest ETFs, which combined hold $1.7 trillion in assets. All three track the S&P 500 index, meaning they perform nearly identically. Still, SPY's 4% drop through April 1, perhaps due to its structure as a unit investment trust, requiring it hold dividends in cash until distribution, is a hair more than the 3.9% drop experienced by the others. Does that performance explain why investors have pumped $35.2 billion into VOO so far this year and yanked $26.6 billion from SPY? Why has IVV pulled in $23.5 billion over the same period? Also worth noting is that in the past month, IVV's flows have crushed them all, which is why it's getting its shot at the top spot. The BlackRock Inc. (BLK) fund has pulled in $23.6 billion, triple VOO's $6.7 billion. Meanwhile, SPY has bled out $27.6 billion. Source: data SPY has long been popular with institutional investors and active traders due to its liquidity, said Senior Content Editor Kent Thune, CFP. As the flagship of State Street's ETF lineup, it's long enjoyed first-mover advantages. Still, its management fee of 0.09%, triple that of VOO and IVV, may be contributing to it losing a notch or so in the rankings. As markets roil this year, VOO and IVV are grabbing interest from individual investors and advisors seeking low-cost, long-term investment vehicles, Thune said. 'If the S&P 500 falls further, IVV will take the top AUM spot, as VOO investors continue to sell,' he said. "We'll know later if there are indirect impacts." The race has no end, and the claim to the world's biggest ETF will be | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
05-02-2025
- Business
- Yahoo
Are We Facing a New Era of Market Volatility?
It might be tempting to write off the market pullbacks of the past two Mondays as unrelated and even somewhat isolated incidents that spiked briefly with extreme volatility. But the market might be sending investors and financial advisors a bigger message beyond day-to-day dips and recoveries. Focusing on the broad market S&P 500 Index, valuations are lofty by almost any measure. Not at record levels, by historical standards, but high enough to give nervous investors cause for concern when news reports spark a reaction. This appears to be where we are right now: Not necessarily at the point where selling and heading for cover is the best strategy, but wholly reflective of a jittery, trigger-happy investor universe. 'We've had two consecutive years of 25% gains in the S&P 500 and valuations are historically high, especially for mega-cap tech,' said Research Lead Kent Thune. 'Investors are expecting a catalyst to bring it all down, and kneejerk reactions become more common in this environment,' he added. 'After the events occur, cooler heads prevail, and the market resumes its upward march.' Thune, who also works with individual investors as a financial advisor, added that what could be described as recent market head fakes will eventually lead to a 'real catalyst' for a market correction, 'but it's anyone's guess about when or how large it will be.' Tom Graff, chief investment officer at Facet in Phoenix, Maryland, describes the market's current inflection point as 'two big narratives crashing together.' 'The market is very expensive, especially in AI-related stocks, and this is putting a lot of pressure on this earnings season,' he said. The threat posed by Chinese artificial intelligence upstart DeepSeek emerged last week as a reminder that many of the companies leading the broad markets these past few years are vulnerable. The tariff scare created by the Trump administration this past Monday, which like the DeepSeek scare a week earlier, simmered over the weekend, and rose to a boiling point by the time the markets officially opened for business. 'Given how aggressively Trump is pursuing a variety of his priorities, it is making Wall Street all the more nervous about tariffs,' said Graff. 'Sure, the first couple of salvos at Mexico and Canada were pulled back at the last minute, but everyone knows that this won't be the last round of tariffs.' Not to downplay the significance of the two market-jarring catalysts, it does underscore the reality of an increasingly anxious market. 'Market reactions over the last two Mondays tell you that there is a lot of air under the market,' said Paul Schatz, president of Heritage Capital in Woodbridge, Connecticut. 'A number of positive outcomes are clearly priced in, and you have some of the most bullish behavior from options traders and that kind of giddy and greedy sentiment is rarely rewarded, especially after a run to or near new highs,' he added. 'It also tells us that an awful lot is not priced into the markets, because I was a little surprised that the markets did not believe tariffs were coming.'Permalink | © Copyright 2025 All rights reserved
Yahoo
31-01-2025
- Business
- Yahoo
Federal Reserve's Rate Hold Briefly Rattles ETF Markets
The Federal Reserve's decision to hold interest rates steady Wednesday initially sent ETFs tumbling before markets staged a comeback, with the Invesco QQQ Trust (QQQ) trimming losses to just 0.2% by late afternoon. The Fed's move to maintain rates at 4.25-4.5% highlights the ongoing balancing act between controlling inflation and supporting economic growth, a dynamic that continues to shape ETF investor strategies across sectors from bonds to equities, particularly as markets adjust expectations for future rate cuts. According to Kent Thune, research lead, the Fed's decision was widely anticipated, with the CME FedWatch tool forecasting a 99.5% chance of a rate pause today. The SPDR S&P 500 ETF Trust (SPY) recovered from steeper losses to trade down 0.5%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) showed resilience, falling just 0.3%, according to data. The Federal Reserve cited solid 'economic activity' and 'somewhat elevated' inflation in its decision to maintain current rates, according to the central bank's 2 p.m. ET statement. During a press conference following today's Federal Reserve Open Committee meeting, Fed Chair Jerome Powell offered a potentially encouraging outlook, stating, 'we do expect to see further progress in inflation,' while repeatedly emphasizing a 'wait and see' approach to future policy decisions. Treasury yields have climbed 25% higher since September when the Fed began its current easing cycle, reflecting the bond market's heightened sensitivity to rate decisions, said Thune. The bond markets appeared to welcome Powell's subsequent press conference comments, with the iShares 20+ Year Treasury Bond ETF (TLT) trading just 0.2% lower after recovering from deeper losses. Powell also indicated during the briefing that the economy grew about 2% in 2024 while housing activity has stabilized, suggesting the Fed's previous rate hikes have achieved their intended effect without triggering a recession that many analysts had feared earlier in the tightening | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
29-01-2025
- Business
- Yahoo
Federal Reserve's Rate Hold Briefly Rattles ETF Markets
The Federal Reserve's decision to hold interest rates steady Wednesday initially sent ETFs tumbling before markets staged a comeback, with the Invesco QQQ Trust (QQQ) trimming losses to just 0.2% by late afternoon. The Fed's move to maintain rates at 4.25-4.5% highlights the ongoing balancing act between controlling inflation and supporting economic growth, a dynamic that continues to shape ETF investor strategies across sectors from bonds to equities, particularly as markets adjust expectations for future rate cuts. According to Kent Thune, research lead, the Fed's decision was widely anticipated, with the CME FedWatch tool forecasting a 99.5% chance of a rate pause today. The SPDR S&P 500 ETF Trust (SPY) recovered from steeper losses to trade down 0.5%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) showed resilience, falling just 0.3%, according to data. The Federal Reserve cited solid 'economic activity' and 'somewhat elevated' inflation in its decision to maintain current rates, according to the central bank's 2 p.m. ET statement. During a press conference following today's Federal Reserve Open Committee meeting, Fed Chair Jerome Powell offered a potentially encouraging outlook, stating, 'we do expect to see further progress in inflation,' while repeatedly emphasizing a 'wait and see' approach to future policy decisions. Treasury yields have climbed 25% higher since September when the Fed began its current easing cycle, reflecting the bond market's heightened sensitivity to rate decisions, said Thune. The bond markets appeared to welcome Powell's subsequent press conference comments, with the iShares 20+ Year Treasury Bond ETF (TLT) trading just 0.2% lower after recovering from deeper losses. Powell also indicated during the briefing that the economy grew about 2% in 2024 while housing activity has stabilized, suggesting the Fed's previous rate hikes have achieved their intended effect without triggering a recession that many analysts had feared earlier in the tightening | © Copyright 2025 All rights reserved
