In the first half of 2024, I published a lot of content on ETF Trends and VettaFi’s other websites. Pieces included a focus on free cash flow ETFs, robotics, and the success of newer ETF entrants. However, three pieces stood as most popular based on viewership. In March, I highlighted the recent launch of two actively managed fixed income ETFs from Vanguard.
See more: Vanguard’s Recent Active ETF Expansion Worthy of Celebration
The Vanguard Core Bond ETF (VCRB ) and the Vanguard Core-Plus Bond ETF (VPLS ) are managed by experienced members of the Vanguard Fixed Income Group that run mutual funds with similar names. While known for its index funds, Vanguard’s active fixed income bond mutual funds have strong 10-year track records. VPLS takes on modestly more credit risk than VCRB.
Industrywide, active fixed income ETFs gathered $42 billion in the first half of 2024, equal to 36% of the category flows. VCRB and VPLS are among the funds gaining traction.
See more: Strong Performing Covered Call ETFs
I wrote several pieces on covered call ETFs as, despite strong demand, advisors told us they wanted more education. However, the March piece that focused on performance records of these options-based ETFs resonated the most.
“They are a great strategy to create income, but a lot of people do not understand the trade-off,” explained Simeon Hyman, global investment strategist at ProShares, at the Exchange conference. “If you sell a call, you are getting income … but you are giving up the upside in the market.” While I agree, it is important to note not all covered call ETFs perform the same.
In the first half of 2024, the Global X S&P 500 Covered Call ETF (XYLD ) was up 7.3%. However, actively managed peers mentioned in the article performed better. The BlackRock Advantage Large Cap Income ETF (BALI ) and the NEOS S&P 500 High Income ETF (SPYI ) rose 14.5% and 10.5%, respectively.
See more: Magnificent Seven Stocks Are in Different Sectors
I love a good ETF educational article, and apparently so do our readers. In February, my son Eli Rosenbluth and I wrote a piece that looked at the sector representation of the Magnificent Seven stocks. We noted that while people think of them as technology stocks, the stocks are not all found in ETFs with technology in the name.
Apple, Microsoft, and Nvidia are part of the Technology Select Sector SPDR ETF (XLK ). However, Alphabet and Meta Platforms are in the Communication Services Select Sector SPDR ETF (XLC ). Meanwhile, Amazon.com and Tesla are in the Consumer Discretionary Select Sector SPDR ETF (XLY ).
In the first half of 2024, XLC rose 18.5% modestly ahead of the 17.9% for XLK. Yet both significantly outperformed the 2.5% gain for XLY. Holdings indeed matter.
I’m excited to share more insights with you in the second half of 2024 and beyond.
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