It’s early days into the earnings season, and FactSet data shows that results reported so far put the S&P 500 on track for its seventh consecutive quarter of growth. The S&P 500, however, is sitting at about a 10% loss year-to-date, struggling to find a lot of upside amid ongoing concerns about international trade.
The month of April has been especially challenging for markets. The news around tariffs and international trade disputes, concerns about inflation, and the return of the word “recession” to everyone’s dinner table conversation have left an impact.
But here’s what’s interesting: for all of our jitters, we keep putting money to work in U.S. equities.
Broad Equity Demand Strong
Our data shows that equities ETFs have, so far in 2025, taken in almost $230 billion in net new assets. This is more than $40 billion in the first couple of weeks in April alone.
The bulk of those equity ETF assets has been landing in broad U.S. large cap equity funds throughout 2025. The Vanguard S&P 500 ETF (VOO ) has taken in roughly $50 billion this year. The iShares Core S&P 500 ETF (IVV ) has taken in $16 billion. The SPDR Portfolio S&P 500 ETF (SPLG ), $10 billion. These are the types of funds that tend to live in the long-term core of investor portfolios. They are long-term bets on capital appreciation.
My colleague Todd Rosenbluth hosted a webcast this week. In it, Fidelity’s Director of Quantitative Market Strategy Denise Chisholm said something that resonated. Are we all nervous? Yes. But recessions are driven by shocks, which are hard to predict, she said. We should beware of trying to make that call – or worse, to act on it.
“If you are worried about recessionary risk, remember that the market is a discounting mechanism,” she said. “The market discounts bad news in advance, and it moves very quickly, so be careful of selling too much into bad news.”
The market action we’ve seen so far in 2025 is the “fastest bull-to-bear market since the 1990s Gulf War,” she said. However, over the next year, the math suggests that 80% of the time returns are positive. “The speed of market decline is often correlated with the speed of advance,” she said.
Appetite for U.S. equity ETF exposure suggests many of us already prescribe to this positive perspective. But there’s no question that just as many of us are increasingly cautious. This is true both within and outside of our equity allocation. Diversification has been a big theme this year. However, finding ways to navigate international exposure in a tense global market has also been on the mind.
The good news is that there are many ETFs to express any views. In fact, a pair of new ETFs launched this week are a great example of how ETFs continue to innovate and problem-solve for today’s and tomorrow’s markets.
‘Intentional’ Broad U.S. Equity Exposure for International Trade Issues
Consider these new Global X funds that launched this week.
- the Global X S&P 500 U.S. Revenue Leaders ETF (EGLE) invests in S&P 500 companies that generate most of their revenue domestically.
- the Global X S&P 500 U.S. Market Leaders Top 50 ETF (FLAG ) is a more concentrated play, investing in the top 50 companies in the index that generate most of their revenue domestically, but that also rank highest in quality risk factors such as free cash flows, return on capital, and market share.
These new strategies screen for sources of revenue at a time when we are all fretting about global trade. That’s noteworthy when you consider that more than 40% of S&P 500 revenue comes from international markets, Global X data shows. Globalization has led to the internationalization of revenues across U.S. companies, and now trade wars challenge that.
“For decades, investors have used broad benchmarks with locally domiciled companies to capture domestic exposure. However, the reality of modern markets is more complex: approximately 130 companies—about 26% of the S&P 500—generate the majority of their revenue overseas,” Global X head of ETF research and product development Pedro Palandrani said. “This substantial foreign exposure, which traditionally serves as a diversification benefit during normal times, can become a liability during periods of trade friction.”
“These funds directly address what we call ‘export risk’ – a challenge many companies now face in an increasingly fragmented global economy,” he said.
EGLE and FLAG allow investors a way to be intentional about their international exposure within their domestic equity sleeve.
Nearshoring ETFs Another Window Into Trade-Aware Investing
You can also think about market access in the face of trade disputes through thematic ETFs tied to the nearshoring trend built around that “made-in-America” call. These funds aren’t necessarily U.S.-only portfolios, but they are U.S.-heavy.
The Aztlan North America Nearshoring Stock Selection ETF (NRSH ) is one of the pioneers in the space. The fund invests in U.S., Canada and Mexico-based companies that benefit from nearshoring. Using a six-factor model to rank stocks, including cash flow generation, value, growth, capital structure quality, earnings, and momentum, the fund holds about 30 names across transportation, logistics and REITs segments, 70% of which are U.S.-based.
Another example of a fund in this category is Tema’s American Reshoring ETF (RSHO ), which sets out to access what the company calls the “renaissance of American industrial manufacturing and onshoring.” About 73% of the portfolio is tied to industrials, but the portfolio is sector diversified including materials, healthcare and tech names. About 87% of the companies in the portfolio are based in North America.
The iShares U.S. Manufacturing ETF (MADE ) is another strategy focused on capitalizing on the nearshoring trend, launched last year. This is a broader portfolio; it has 100 holdings and is sector-diverse. Capital goods, technology and consumer durables are among its exposures.
These ETFs are an example of a still-young but burgeoning thematic category that’s increasingly in focus as global trade disputes make the news. It’s been a hectic month, but it’s still early days in a potentially new era of global trade ahead.
Sharper ETF Tools
It’s been reassuring to see ETF investors continue to put money to work despite so much uncertainty. In the aggregate, ETF asset flows are already on pace to break new records this year. It’s been even greater to see new ETFs come to market that are sharper and sharper tools. These help investors navigate these challenging markets strategically, tactically and with intention.
For more news, information, and strategy, visit ETFdb.
