Latest news with #SPDRS&P500ETFTrust
Yahoo
4 days ago
- Business
- Yahoo
ETFs Unfazed by Market Volatility
Volatility may be the defining word from the first half of 2025, but ETF investors just aren't flinching. Despite ongoing economic uncertainty and trade war tensions, ETFs attracted record inflows in the US. So far this year, investors poured $427 billion in new assets into ETFs, far surpassing the $301 billion over the same period last year, according to Morningstar. Much of this has flowed into equity ETFs as investors look to buy the dip, but diversification still remains key for advisors and their clients. 'The appetite for funds has not wavered,' said Bryan Armour, director of ETF & passive strategies research at Morningstar. He said it's also a good time to increase bond exposure with TIPS ETFs, or consider alternatives like gold funds. 'No one knows what's going to happen next, and there's a lot that's up in the air economically right now.' READ ALSO: Want a Crypto 401(k)? The DOL Isn't Standing in the Way Anymore and Why Thrivent Wants to Hire Nearly 600 Advisors this Year With markets recovering from earlier losses and the major indexes flat year-to-date, investors have piled into equity ETFs. Stock-based funds in the most popular ETF segments have taken in nearly $200 billion so far in 2025, according to data platform Trackinsight. While passive funds remain dominant in terms of flows and total assets, active ETFs are moving the needle, accounting for nearly 40% of inflows so far this year. The biggest equity fund winner is the Vanguard S&P 500 ETF (VOO), which has seen roughly $65 billion in inflows so far this year. In February, it overtook State Street's SPDR S&P 500 ETF Trust (SPY) as the largest fund. 'Two years ago, that would've been a single-year record,' Armour told Advisor Upside. 'Even if we stopped in May, it would be the second-largest year of inflows ever for VOO. That's nuts.' In fixed income, investors are playing it safe, favoring ultra-short bonds and T-bill ETFs that offer lower credit and interest rate risk amid ongoing market choppiness, Armour said. Risky Bet? The previous high for ETF inflows by this point in the year was in 2021, at just over $370 billion — followed by a downturn in 2022. Could history repeat? Armour said ETF inflows alone don't pose a systemic risk. 'With the amount of money in bonds, stocks, mutual funds, hedge funds, and private equity, ETF inflows aren't going to tip the scales to the point where assets are overpriced,' he told Advisor Upside. This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter.
Yahoo
5 days ago
- Business
- Yahoo
Stock ETFs Volatile as Court Strikes Down Trump's Tariffs
Stock ETFs seesawed Wednesday after a federal court struck down a major chunk of President Donald Trump's tariff agenda, raising fresh uncertainty about the future of U.S. trade policy. The SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) initially jumped on the news. SPY climbed nearly 1% at its intraday high, while QQQ rallied as much as 1.5%. But those gains evaporated by midday as investors processed the implications of the ruling and the likelihood that the administration would pursue other avenues to restore tariffs. Late Wednesday, a three-judge panel from the U.S. Court of International Trade unanimously ruled that several of Trump's sweeping tariff orders exceeded his authority under the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows the president to regulate commerce in response to national emergencies. Specifically, the court invalidated a series of executive orders that imposed tariffs on Canadian, Mexican and Chinese imports—tariffs that had been justified as responses to emergencies like drug trafficking and trade deficits. The ruling also blocked a set of "reciprocal" tariffs targeting dozens of U.S. trading partners, which were slated to go into effect in July unless trade deals were reached. In its opinion, the court concluded that IEEPA does not grant the president unlimited power to impose tariffs. While the ruling doesn't affect tariffs imposed under other statutes—such as Section 232 of the Trade Expansion Act, which allows for duties on national security grounds—it does curb the use of emergency powers for broad trade restrictions. The Trump administration quickly signaled it would appeal the decision and indicated that it might turn to other authorities to reimpose similar tariffs. 'There are so many different authorities the administration can reach into to put it back together,' said Michael Zezas, head of fixed income and thematic research at Morgan Stanley, on Bloomberg TV. Peter Navarro, a top White House trade advisor, also indicated that other mechanisms remain available, though many are slower and more cumbersome than IEEPA. The back-and-forth left investors unsure how to interpret the ruling. While the court decision marked a temporary legal win for importers and trade groups challenging Trump's tariff regime, it didn't signal the end of tariff threats more broadly. As investors recalibrated their expectations about what the latest court ruling means for the economy, stock ETFs gave up their early gains. Both SPY and QQQ briefly turned negative before rebounding to trade modestly higher. For now, markets are waiting to see how the administration responds. Trump's tariff agenda, a cornerstone of his economic platform, is unlikely to disappear without a | © Copyright 2025 All rights reserved Sign in to access your portfolio
CNBC
5 days ago
- Business
- CNBC
A rough stretch for bonds may force some pension funds to sell stocks on Friday
The stock market is set to end May with strong returns, but that may actually work against equities on Friday. A note from the Goldman Sachs trading desk showed that U.S. pension funds are expected to sell $20 billion of equities as part of their month-end rebalancing. That total dollar value ranks in the 86th percentile for net buying or selling in similar rebalances since 2000, according to Goldman. The reason is many pension plans have target allocations for the relative value of their stock holdings versus other assets like bonds or private equity — a large scale version of the traditional 60/40 portfolio. And while stocks have had a banner month, bonds have struggled, meaning that some significant shifts are needed to bring the two groups back in balance when it comes to model portfolios. The SPDR S & P 500 ETF Trust (SPY) is up more than 6% month to date, while the iShares 20+ Year Treasury Bond ETF (TLT) is down nearly 4%. Short-term bonds have held up better, but even Vanguard's Short-Term Treasury ETF (VGSH) is still on track for a negative month. TLT 1M mountain Long-dated bonds have struggled in May. "We're not used to sort of seeing the volatility we've seen in bonds, as well, and especially when you're working with something like pension funds or on the institution side, these fund flows can be in the billions easily. And when you start to see those rebalances take shape rather quickly, it can definitely be a short- to intermediate-term needle mover," said Bret Kenwell, U.S. investment analyst at eToro. To be sure, the selling by pensions could be an opportunity for less rigid investors to buy. HSBC upgraded its view of U.S. stocks to neutral from underweight late Wednesday, in part because of light positioning among long-only investors. Friday could see a chance for some of those to jump back into stocks, especially if they are more confident after apparent progress on tariffs in recent weeks. "Whether it's the 90-days pause or whether it's pushing out deadlines with the EU or legal proceedings like we saw last night, I think there's this sort of belief on Wall Street that we've seen the worst of the tariff situation shake out and that we should continue to move toward continued de-escalation," Kenwell said. — CNBC's Michael Bloom contributed to this report.
Yahoo
27-05-2025
- Business
- Yahoo
The Vanguard S&P 500 ETF: Is It Still a Core Portfolio Holding?
The Vanguard 500 ETF is the world's largest ETF and a core portfolio holding for many investors. The ETF has become increasingly top-heavy with tech stocks in recent years. 10 stocks we like better than Vanguard S&P 500 ETF › The Vanguard S&P 500 ETF (NYSEMKT: VOO) became the world's largest exchange-traded fund (ETF) earlier this year when it surpassed the SPDR S&P 500 ETF Trust. Both funds track the performance of the (SNPINDEX: ^GSPC), but Vanguard's strong reputation as an index fund leader, along with a lower expense ratio, helped propel its ETF into the top spot. However, given recent market volatility, some investors may wonder if the Vanguard ETF should still be a core holding. One of the arguments against the Vanguard 500 ETF is that the S&P 500 index has become too top-heavy with big tech companies. Over 30% of its holdings are in the technology sector, and that doesn't even include companies like Amazon and Tesla, which are technically classified in other sectors. The S&P 500 has become more concentrated in tech stocks and less diversified over time. Here is a list of the ETF's top holdings and their weightings as of the end of April: Holding Weighting Holding Weighting 1. Apple 6.8% 6. Meta Platforms 2.5% 2. Microsoft 6.2% 7. Berkshire Hathaway 2.1% 3. Nvidia 5.6% 8. Broadcom 1.9% 4. Amazon 3.9% 9. Tesla 1.7% 5. Alphabet 3.6% 10. Eli Lilly 1.5% Data source: Vanguard. Looking at the table, you can see the ETF's top five positions at the end of April accounted for more than 26% of its holdings, and all are companies chasing artificial intelligence (AI) ambitions. The same could be said for three of its next five largest holdings, as well. For this reason, some market pundits, including analysts at Goldman Sachs, have recommended investors turn to S&P 500 equal-weighted ETFs, which, as the name implies, give an equal weighting to each stock in the S&P 500. One example of such an ETF is the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP), where each holding has a less than 0.25% weighting. As such, not a single stock will have an outsized influence on the fund. It also greatly shifts the sector weighting of the ETF with industrials being the largest sector at around 15.5% and financials at 14.9%. Tech drops to third place at 13.4%. That said, moving away from the S&P 500 ETF as a core holding may not be the best approach, even as the index has become more concentrated in tech stocks. The reason why these technology companies make up such a large share of the index (and its corresponding ETFs) is because their success has made them the largest companies in the world. They continue to innovate and grow, shaping much of the world in the process. AI, meanwhile, has the potential to be a generational opportunity, and these are the companies with the means and resources to invest in it. As such, investors shouldn't inherently be worried about large-cap technology companies' weighting in the index. You could even argue that the long-term success of the S&P 500 is due to the fact it's a market-weighted index. The larger a company becomes based on its market capitalization, the greater the percentage of the index it represents. Meanwhile, companies that underperform become a smaller part of the index. This dynamic is key to the long-term performance of the S&P 500. A J.P. Morgan study found the market's success over the years is typically driven by a handful of "megawinners." The investment bank noted that between 1980 and 2020, more than 40% of all stocks in the Russell 3000 index, which consists of the 3,000 largest companies traded in the U.S., experienced a 70% decline, from which they never fully recovered. In addition, over 40% of stocks saw negative returns during this period, and two-thirds of stocks underperformed the index. Despite the weak returns of most individual stocks, indices like the S&P 500 have still performed well because its winning stocks make up an increasing share of the index. This is counter to what most professional investment managers do: They pare the positions of their winners and add more money to laggards to rebalance their portfolios. It's a big reason why so many portfolio managers struggle to outperform the S&P 500 index over the long run. Individual investors can continue to view the Vanguard 500 ETF as a core holding. It has a long track record of success with the ETF producing an average annual return of 12.3% over the past 10 years. And in this time of heightened volatility, investors can use a dollar-cost averaging strategy to build up their position in the ETF. By investing on a regular schedule, regardless of price, you can reduce the impact of short-term market swings. 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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Goldman Sachs Group, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The Vanguard S&P 500 ETF: Is It Still a Core Portfolio Holding? was originally published by The Motley Fool 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
27-05-2025
- Business
- Yahoo
EU-US Trade Deal Hopes to Boost These ETFs
After logging a weekly decline, Wall Street is set to rebound on the likelihood of an EU-US trade deal following the tariff delays. SPDR S&P 500 ETF Trust SPY, Invesco QQQ QQQ, Technology Select Sector SPDR Fund XLK, Industrial Select Sector SPDR Fund XLI and Vanguard FTSE Europe ETF VGK are set for big moves. The European Union agreed to accelerate tariff negotiations with the United States, easing fears of a trans-Atlantic trade war. The decision came after President Trump announced that the United States would postpone the implementation of a 50% tariff increase on all EU products, from June 1 to July 9, to allow time for further a social media post on Friday, Trump threatened to impose a 50% tariff on EU goods, criticizing the 27-member bloc as 'very difficult to deal with' on trade and claiming that negotiations were 'going nowhere.' The tariffs were set to take effect on June 1. Additionally, Trump warned that all smartphones made outside the country, including Apple's AAPL iPhone and Samsung devices, could soon face a 25% import tax if not manufactured in the United States (read: Volatility ETFs Spike on Renewed Trump Tariff Threats). SPDR S&P 500 ETF Trust (SPY)SPDR S&P 500 ETF Trust holds 504 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each. SPDR S&P 500 ETF Trust has an AUM of $608 billion and charges 9 bps in fees per year. It trades in an average daily volume of 65 million shares and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).Invesco QQQ Trust (QQQ)Invesco QQQ Trust provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. It is one of the largest and most popular ETFs in the large-cap space, with an AUM of $330.5 billion and an average daily volume of 44.3 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk Sector SPDR Technology ETF (XLK)Select Sector SPDR Technology ETF is the most popular and liquid ETF in the technology space, with AUM of $72.4 billion and an average daily volume of 5 million shares. It offers broad exposure to the technology sector and follows the Technology Select Sector Index. Select Sector SPDR Technology ETF holds about 69 securities in its basket and charges 8 bps in fees per year from investors. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: 3 ETF Strategies to Follow on Temporary U.S.-China Trade Deal).Industrial Select Sector SPDR (XLI)Industrial Select Sector SPDR targets the broad industrial sector and follows the Industrial Select Sector Index. XLI holds 79 stocks in its basket and is well spread out across sectors, with aerospace & defense, machinery, and ground transportation making up for a double-digit share each. Industrial Select Sector SPDR is the most popular ETF with AUM of $21 billion and an average daily volume of around 7 million shares. It charges 8 bps in fees per year and has a Zacks ETF Rank #1 with a Medium risk FTSE Europe ETF (VGK)Vanguard FTSE Europe ETF offers exposure to companies located in the major markets of Europe by tracking the FTSE Developed Europe All Cap Index. It holds a broad basket of 1241 stocks with key holdings in financials, industrials, health care, and consumer discretionary sectors. Vanguard FTSE Europe ETF has AUM of $25.1 billion and trades in an average daily volume of 3.5 million shares. It charges 6 bps in annual fees and has a Zacks ETF Rank #1 with a Medium risk outlook. While the delay in tariff implementation has provided a temporary reprieve, investors should brace for more volatility ahead as the potential for a trade war has not completely dissipated. 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 Apple Inc. (AAPL) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports Technology Select Sector SPDR ETF (XLK): ETF Research Reports Industrial Select Sector SPDR ETF (XLI): ETF Research Reports Vanguard FTSE Europe ETF (VGK): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
