ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Artificial Intelligence
      • Beyond Basic Beta
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Direct Indexing
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Investing
      • ETF Education
      • ETF Strategist
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Institutional Income Strategies
      • Leveraged & Inverse
      • Managed Futures
      • Market Insights
      • Modern Alpha
      • Multifactor
      • Responsible Investing
      • Retirement Income
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Commodities
        • Gold/Silver/Critical Minerals
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Relative Value Investing Channel
  2. Why ETF Investors Are Being Cautiously Optimistic
Relative Value Investing Channel
Share

Why ETF Investors Are Being Cautiously Optimistic

Aaron NeuwirthOct 10, 2019
2019-10-10

There are plenty of factors currently speaking to why ETF investors are cautiously optimistic.

In the latest episode of “Bloomberg ETF IQ,” host Eric Balchunas discusses the tug of war between bulls and bears. He brings up the Vanguard International Bond EFT (BNDX A-), which has shown some aggressiveness in the fixed income department.

However, there’s more sentiment for low volatility ETFs, quality, and gold, which shows a level of investors being cautiously optimistic. Part of that has to do with small-caps being down, along with bullishness on the part of short-term debt.

Looking back at the third quarter, there are some things to glean from the fixed income versus equity race that’s held the interest of many. With fixed income, the first quarter was strong, the second quarter was strong, and while it still had a lead over equity in the third, equity seemed to be climbing, and chipping away at it.

Seeing as fixed income went from a $60-70 billion lead to $40 billion, it means good news in the form of trading crowd reactions could lead to a photo finish between the two by the end of next quarter.

Effects On Emerging Markets

Shifting gears to how the White House plans to limit flows into China and the impact that has on emerging market ETFs, Bloomberg’s Carolina Wilson puts forward what is at stake. As it stands, there is around $500 billion in EM ETFs and mutual funds that are US listed. With 20% exposure of those strategies to Chinese stocks, that means $100 billion in Chinese stock exposure in various US vehicles.

As Wilson explains, this sort of scenario allows ETFs that represent single countries a chance to shine, as they step in as price proxies. Prices could, in fact, change based on these recent developments, so it will be interesting to see where things fall.

The other major news to focus on is the move made by Charles Schwab (SCHW) to eliminate commissions of equity and ETF trading. It may have been a long time coming, and it has so far led to many of the online brokerages taking a hit.

Additionally, *E*Trade (ETFC)* already made a move to end commissions, as well. This shows the clear impact the fee war has had already, with a lot of intrigue as to where things go next.

Stadion Money Management’s Will McGough is not quite sure what Fidelity’s move will be, but they are indeed being pressured to contend with what has taken place. When a possible partnership is suggested, McGough understands there’s a certain appeal, but must acknowledge how well commission works for Fidelity, even with apps such as Robinhood and acorn have an impact as well.

Related: Schwab Eliminates ETF, Stock, and Options Commissions

Having these areas in focus is good because it brings things back around to what kind of market investors are currently looking at as a whole, highlighting, again, why they can slowly push forward. Keeping this in mind, IndexIQ’s Kelly Ye working on high-yield, low-volatility fund.

As Ye explains, investors are looking for tools to generate income while being able to manage the risk on the downside. With the product IndexIQ developed a couple of years ago, investors can ideally invest in the right kind of bonds. It’s methods like these that spur on investors.


Content continues below advertisement

Watch This Bloomberg Video To Understand Investor Strategies

This article originally appeared on ETFTrends.com.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X