Latest news with #Bartolini
Yahoo
10-07-2025
- Business
- Yahoo
JPMorgan Files to Launch Money Market ETF
Money doesn't grow on trees — it grows in money markets, a resource that JPMorgan plans to help ETF investors access more easily as markets seek shelter from increasing volatility. The bank applied last month for SEC approval of the actively managed JPMorgan 100% US Treasury Securities Money Market ETF, which would invest exclusively in Treasury bills, bonds and notes, according to the filing. The move, along with recent money market ETF launches by Schwab and BlackRock, shows how issuers are capitalizing on investors' appetite for lower-risk options amid geopolitical uncertainty and ETF hype. Still, inflows have yet to match the rapidity of recent money market ETF launches, according to Matthew Bartolini, State Street's head of Americas ETF research. 'They're really new,' Bartolini said. 'With any new thing, you want to see how it does, how its performance is, and if the use case is valuable enough to rotate from what you're doing right now.' READ ALSO: What's Inside the SEC's Latest Crypto ETF Guidance and State Street's PRIV Lands First Daily Inflows in Months Money market funds — which invest in short-term, low-risk securities like US Treasury bills, municipal debt or corporate bonds — have been around as long as ETFs have existed. JPMorgan's Prime Money Market Fund (VMVXX), a mutual fund that invests in both US government securities and debt issued by American and foreign corporations, began trading in 1993. Money market ETFs let clients who want an all-ETF portfolio include a cash management vehicle in it. 'That same client could have been like, 'Well, for my cash purposes, I'll hold an ultra-short, active strategy.' There've been those options, just not within a money market wrapper,' Bartolini said. 'With that money market wrapper, you might get different clients to use it who prefer money markets for their cash sweep vehicle.' Other big players in the money market fund space include: Vanguard's Federal Money Market Fund (VMFXX), which invests in cash and short-term securities issued by the US government and is up 2.2% year-to-date; Schwab's Value Advantage Money Fund (SWVXX), which invests in US and foreign entity-issued short-term securities and is up 2% year-to-date; And Invesco's Government Money Market Fund (INAXX), which invests in cash, government securities and repurchase agreements. It's up 1.7% year-to-date. A Sea Change. The recent launches are also representative of what experts describe as a shift toward mutual fund strategies being used in ETFs. Bartolini said JPMorgan's move is unsurprising given the recent boom in other structured note products, like buffer ETFs. 'This is another proof point of the ETF industry maturing,' he said, 'and entering into different markets for investors to utilize strategies typically confined to mutual funds.' This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter. 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
CNBC
30-06-2025
- Business
- CNBC
In market rally back to record, best S&P 500 tech trade hasn't been 'Mag 7' or tech sector itself
In recent years, the technology sector, especially its biggest names like Apple, had developed the reputation of being the safest choice in a volatile stock market. Tech stocks are now back, even after the big hit many took in 2025's first half. At the first half's closing low on April 8, the S&P 500 was down 15% year-to-date. At its closing high last Friday, the index was up 5% YTD. Over the past month through last Friday, tech was up 8.67%, leading the S&P 500. Over the past quarter, tech was up 22.30%, its best quarterly performance since the second quarter of 2020's Covid boom. But one sector that has a healthy tech-bent has done even better than the tech sector itself: the Communication Services sector of the S&P 500. Last week, it was up over 6%, leading all sectors, and year-to-date, it has turned in better performance than tech. The Communication Services Select Sector SPDR Fund (XLC) is up over 11% year-to-date, while Technology Select Sector SPDR Fund (XLK) is up a little under 9%. What's led Communication Services to outperform the tech sector itself? The "service"-based nature of the sector has enabled it not only to sustain but also to thrive in a volatile market, according to Matt Bartolini, State Street Head of SPDR Americas Research. "When we look at it on a cross-asset momentum, it ranks one across all other sectors," said Bartolini, speaking on CNBC's "ETF Edge." Another way to put it: "No one is cancelling Netflix," said Todd Sohn, Senior ETF & Technical Strategist at Strategas Asset Management. A look under the hood of XLC is important to understand the relative outperformance. Roughly 36% of XLC is in its top holdings: Meta, Netflix, and Alphabet. While Alphabet has been a notable laggard in tech this year, Meta, with a weight of 18.57% in the ETF, has been outperforming since April and is up by over 20% YTD. Netflix is hovering around its all-time high, and is up close to 50% this year. That's more than covered for Alphabet's losses, even though it has the second highest weighting within XLC. And investors have been moving into the ETF this year, with roughly $1.6 billion in flows, about three times higher than XLK, which has seen near $500 million in inflows, according to "XLC has been a strong performer, aided by its top holding, Meta, as well as other stocks," said Todd Rosenbluth, Head of Research at VettaFi. "Netflix has been a star this year," he added. Betting less heavily on the top-heavy tech names in indexes and sectors has worked well here, too with Invesco's S&P 500 Equal Weight Communication Services ETF (RSPC), up close to 11% year-to-date. For the pure-play tech sector bet offered by XLK, it is led by the likes of Microsoft, Nvidia, and Apple, with the latter a similar drag on performance in the tech sector as Alphabet has been to communication services. "XLK has the Apple headwind. Semiconductors are on the rebound, but are coming off a significant correction too," Sohn said. Apple is down by 18% this year, and it is the only "Magnificent 7" stock to recently trade below both its 50- and 200-day moving averages. The Roundhill Magnificent 7 ETF (MAGS), which is an equally weight Mag 7 portfolio, is up only a little over 2% this year. Overall, tech-focused ETFs are doing well, with the Invesco QQQ Trust (QQQ), up close to 17% over the past quarter, and roughly 8% this year. And Vanguard's Information Technology ETF (VGT) has seen sizable flows, at close to $3.5 billion YTD, but its 6% year-to-date gain is well behind XLC, almost half the level. But there are additional examples from the market showing that the communication services bet has been the better way to leverage some top names associated with tech-led rallies, especially in a year when international stocks have beaten the U.S. market. A communication services ETF with a higher exposure to foreign stocks, the iShares' Global Communication Services ETF (IXP), is up over 15% this year, beating XLC by a notable margin. "It's due to their exposure to non U.S. stocks," Rosenbluth said. "International stocks have been stronger performers and provide diversification benefits," he added. Disclaimer
CNBC
30-06-2025
- Business
- CNBC
What biggest investing trends of 2025's first half suggest about market's future path
At the halfway point of the year, one trend clearly evident among investors is the search for resilient trades. "This year, and even so in the last couple of weeks, we've just seen this idea of investors building more resiliency into their portfolios," Matt Bartolini, head of SPDR Americas Research at State Street Global Advisors, said on a recent CNBC "ETF Edge." "I think many investors heading into 2025 actually had very 'un-resilient' portfolios," he added. Will this trend stay in place after the U.S. stock market's big comeback from the April lows?At the first half's closing low on April 8, the S&P 500 was down 15% year-to-date, according to CNBC data. At its closing high last Friday, the index was up 5% YTD. That could lead investors to pile back into U.S. stocks. Bartolini noted that the trend of investing in international stocks over the past six months was a departure for many U.S. investors who previously concentrated on the U.S. market alone. He expects international diversification to stick around. "We saw greater inflows into non-U.S. equities than their market share would indicate, and I think that trend will likely continue in the second half," Bartolini said. Geopolitical uncertainty, such as in the Middle East, has the potential to change the course of markets in ways that can't be expected, and that is one more reason mitigating risk is on many investors' minds right now. "You shouldn't react to intraday news," said John Davi, CIO at Astoria Portfolio Advisors, on "ETF Edge." "You should have thoughtful portfolio construction to plan for periods of uncertainty," he said. Davi said 2025's first half was a period for the construction of a multi-asset, all-weather portfolio, including assets like gold and commodities. But where they go next is difficult to say given the recent Mideast conflict. Commodities are usually safe trades during periods of uncertainty, said Davi, mentioning oil and gold. Gold reached a record high this year, but has slipped over the past month even with the Israel-Iran conflict unsettling markets. Oil, meanwhile, sold off during the recent conflict in a way that few expected, and in contrast to typical oil price increases during conflicts in the Middle East. Davi said while the recent dips in gold and oil were notable, there is not enough data to question whether the role these assets have played during times of volatility is changing. As the second half of the year begins, he said, "It's too early to tell" how oil and gold will trend, and investors should not place too much emphasis on the recent trading headwinds for these assets. Disclaimer
CNBC
06-06-2025
- Business
- CNBC
How investors can use these high-yielding assets to diversify their portfolios
With interest rates still elevated, investors continue to find juicy yields in collateralized loan obligations. Some $4.7 trillion has flowed into CLO and bank loan exchange-traded funds since the start of the year, following 2024's record $25.6 billion in inflows , according to State Street. While investors fled the funds, along with many others, in April, the ETFs have bounced back. In May, $2 trillion in new money moved into bank loan and CLO ETFs, the ninth best month ever, State Street analyst Matthew Bartolini said in a May 31 note. CLOs are securitized pools of floating-rate loans to businesses and so their coupon payments shift alongside short-term interest rate changes. "That credit segment may continue to receive above-average inflows, given that sector's floating-rate profile and the Fed's 'wait-and-see' approach to rate cuts," Bartolini wrote. The Federal Reserve is set to meet on June 17-18 and is widely expected to hold interest rates steady, as it has been all year. Traders anticipate the next cut to come in September, according to the CME FedWatch Tool . Once the central bank starts to dial back rates, yields on CLOs are expected to gradually move down. Himani Trivedi, head of structured credit at Nuveen, said demand for the products has been steady up and down the capital structure, and expects that to continue. "There's not many floaters out there. So this has been a really good diversifier for investors," she said. "Given the volatility and potential for higher for longer, it still continues to see that flow come in, up and down the capital structure, for CLOs." Right now the Janus Henderson AAA CLO ETF (JAAA) has a 30-day SEC yield of 5.48% and a net expense ratio of 0.20%. It has $20.96 billion in assets under management as of Thursday. Some $4 billion has moved into the fund so far this year, according to FactSet. "With CLOs, you're getting a decent return," said John Kerschner, head of U.S. securitized products and a portfolio manager at Janus. "You're not taking outsized risk." JAAA YTD mountain Janus Henderson AAA CLO ETF year to date In fact, during the recent market dislocation, spreads on CLOs widened but had much less volatility than corporate credit or other parts of the bond market, he said. Liquidity was "incredible," he added. "It just showed that in these dislocations, instead of liquidity drying up, it actually gets better," Kerschner said. "There's more trading and that's what you want as an end investor." Picking up more yield Investors can pick up more yield as they move down in ratings, although those CLOs rated AAA are the first in line to get paid if the borrower declares bankruptcy. Nuveen launched its AA-BBB CLO ETF (NCLO) in December. It currently has a 6.4% 30-day SEC yield and 0.25% total expense ratio. It has collected $19 million in flows year to date, per FactSet, and has net assets of $89.4 million. NCLO YTD mountain Nuveen AA-BBB CLO ETF year to date While the ETF holds CLOs below AAA, they are still investment grade, Trivedi said. Assets with a rating of BBB- or higher by Standard & Poor's or Baa3 or better by Moody's, are considered investment grade and have a lower default risk compared to assets with lower ratings. Strong fundamentals have kept CLO defaults low, she noted. "They do provide a spread pick up, so where, even when the rates go down, you still have this additional carry," Trivedi said of those in the AA to BBB range. That carry is about 200 basis points over Secured Overnight Financing Rate (SOFR), which is the primary benchmark for CLOs, she added. "So even if SOFR was going down, against other fixed income instruments, you will get that extra credit spread for a minimal risk," she said. In addition, a recent analysis by VanEck found that over the past decade, A-rated CLOs outperformed AAA CLOs by 142 basis points a year. They also have lower volatility than investment-grade corporate bonds. BBB-rated CLOs topped AAAs by 147 basis points, the analysis found. The firm launched the VanEck AA-BBB CLO ETF (CLOB) last September. The fund invests primarily in the AA- to BB-rated tranches, has a 7.17% 30-day SEC yield and a 0.45% expense ratio. It has $116.39 million in total net assets, as of Thursday. Janus Henderson also has a lower-investment grade CLO product, the B-BBB CLO ETF (JBBB), launched in 2022. It has $1.33 billion in assets under management. The fund has seen outflows of $62 million year to date. CLOs in your portfolio While CLOs can be an attractive part of your income portfolio, investors should make sure they are diversified. When the Fed does start to cut rates, CLO yields will follow — and investors will need to make sure they also have some longer-dated bonds. Financial advisors and investment experts have been recommending intermediate-term duration assets for fixed-income investors. Janus Henderson's Kerschner likes to use AAA CLOs in more of a barbell approach, with the floating-rate assets on one end and longer duration agency mortgage-backed securities on the other. The firm's Mortgage-Backed Securities ETF (JMBS) has an effective duration of 7 years, a 5.11% 30-day SEC yield and 0.22% net expense ratio. That doesn't mean investors shouldn't have other assets in their fixed income portfolio, but he likes this barbell for at least over the next six to 12 months — and potentially longer. Nuveen sees CLOs as an excellent diversifier because they have a low correlation to most fixed-income assets. Because they are versatile, they can fill a variety of roles within the portfolio — including an alternative to short-duration bonds or a complement to high-yield bonds, the firm said in a rjecent note. Whether to stick with AAA-rated CLOs or the lower investment-grade assets depends on the investors time horizon, Trivedi explained. AAA-rated products can be seen more as a short-term cash investment, while the AA-BBB makes sense for a longer-term core investment, she said. "They can continue to get that coupon even when the rates go higher or lower," she said. "They're in a good safe spot."
Yahoo
06-05-2025
- Business
- Yahoo
State Street Report Shows Big Slump in April ETF Inflows
A slowdown in ETF adoption threatens State Street Global Advisors' (STT) full-year forecast of $1.3 trillion of inflows, according to the firm's latest "US-Listed ETF Flash Flows" report. Exchange-traded funds recorded $62 billion of inflows in April, marking the lowest monthly total in a year as investors retreated from riskier assets amid mounting volatility from escalating trade tensions. Despite global equities posting gains in April, U.S. stocks suffered losses as trade war volatility had a concentrated impact on domestic markets, reshaping investor sentiment and positioning across multiple asset classes. Gold ETFs attracted $3.8 billion, ranking as the 10th-highest monthly inflow ever for the category, while equity ETFs managed just $32 billion, their 40th-best month historically. "The redesign and paradigm shift of global macroeconomic modalities just pressurized markets," wrote Matthew Bartolini, head of Americas ETF research at State Street Global Advisors in the report. He compared the effect of recent tariff announcements to carbonated water, noting, "The infusion of the exogenous tariff variable, like CO2 gas being dissolved in spring water to form carbonic acid, transformed the market's general properties." Investors Seek Safety with Defensive Plays The major reversal came from sector ETFs, which experienced their worst-ever monthly outflows at $11 billion. The selloff was widespread, with only the defensive utilities sector managing inflows of $171 million. The outflows pushed the three-month rolling total to $21.5 billion, the second-worst on record. Credit sectors also faced pressure, with a record $15 billion fleeing from investment-grade corporate bonds, high-yield bonds and bank loan ETFs. The bank loan and collateralized loan obligation category saw its largest-ever outflow of $5 billion, while investment-grade corporates shed $4.6 billion, also a record. According to Bartolini, these outflows represent "a complete reversal of the trend leading up to April, as investors were visibly overweight credit, reflecting a bias toward an environment of rising growth." That economic environment now appears less likely given recent data and the potential impact of tariffs on consumption. Cautious investors poured $19 billion into ultra-short and short-term government bond ETFs in April, marking their second-largest monthly inflow ever, behind only the $20.2 billion recorded during March 2020 at the onset of the pandemic. The three-month rolling total reached a record $34 billion, exceeding the previous high of $27 billion set in 2022 during aggressive Federal Reserve tightening.
