Latest news with #MattBartolini
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
23-06-2025
- Business
- CNBC
State Street's Matt Bartolini on how ETF investors are reacting to growing Middle East tensions
Matt Bartolini, State Street, joins CNBC's Dominic Chu on 'Halftime Report' to discuss how ETF investors are monitoring geopolitical developments, and handling the risks involved as tensions grow between Israel and Iran.
Yahoo
10-04-2025
- Business
- Yahoo
A $576 Billion Stock-ETF Juggernaut Hit by Extreme Dislocations
(Bloomberg) -- One of the largest exchange-traded funds in the world was left at the widest premium to its underlying holdings since 2008 at the end of Wednesday's historic session. In another sign of the frantic trading on Wall Street, the $576 billion SPDR S&P 500 ETF Trust, or SPY, closed roughly 90 basis points above its net-asset value on a day when it surged 10.5% — the most in 16 years — data compiled by Bloomberg show. For comparison, SPY's average dislocation to its NAV over the past decade is just a fraction of a basis point. The early Covid months of 2020 also saw it trade above or below its net-asset value, though none of those gaps were as wide as where Wednesday's ended up. Traders frantically covering bearish trades likely contributed to the flood of capital into SPY that afternoon. The fund, which on average has traded roughly 56 million shares a day over the past year, is known for its liquidity. But on Wednesday, closing-auction volumes were running roughly 300% higher than usual and likely a factor in driving up the premium, according to Matt Bartolini, head of SPDR Americas Research at State Street Global Advisors. 'That's just a function of the ETF, of SPY — it's a significant liquidity vehicle for a large swath of traders and investors to rotate into,' he said in an interview. 'Given the sizable moves that we saw yesterday intraday, but also heading into the close, there was just a large balance of buy orders coming in to mark the close that then pushed the price up above.' It's important to remember the context in which the frenzied trading happened: market moves have been extreme in recent days, he added. 'It's a feature of SPY to have the ability to absorb that much liquidity in two-way trading volumes.' The S&P 500 on Wednesday staged a historic rebound after President Donald Trump said he would pause tariffs on some trading partners. More than 241 million shares of SPY changed hands. 'Yesterday's moves were so extreme that even the world's most liquid ETF was not immune to an impact as the closing auction traded well above its fair value,' said Dave Mazza, chief executive officer at ETF issuer Roundhill Investments. 'When SPY sees moves like this, you know it's a wild day in the markets.' His calculations show that some 8 million shares ended up paying about $5 above the closing-auction price. Trump's disruptive trade plans are challenging the most liquid investing tools in the world as fresh volatility hits Wall Street. Stocks resumed their plunge Thursday. 'I think there is a good likelihood you'll see some elevated dislocations in SPY and other ETFs — it's not uncommon in panicked markets,' said Bloomberg Intelligence's Athanasios Psarofagis. 'But that said, ETFs are handling this phenomenally.' Still others had another theory to offer: Traders frantically covering bearish trades likely contributed to the flood of capital into SPY on Wednesday afternoon, according to Ling Zhou, head of equity derivatives strategy at TD Securities. Investors that were net short equities or short options positions needed to chase the rally after Trump's tariff pause announcement, he said. 'This speaks to how much people got hurt on their shorts on the rally yesterday,' Zhou said. 'Liquidity worsened and investors needed to hedge shorts via SPY.' More stories like this are available on ©2025 Bloomberg L.P.
Yahoo
19-02-2025
- Business
- Yahoo
Vanguard Rides VOO's Ascent to Top of the ETF Heap
The crown for the world's largest exchange-traded fund has been transferred, at least for now, to the Vanguard S&P 500 ETF (VOO) from the SPDR S&P 500 ETF Trust (SPY), which held the title for most of its 32-year existence. VOO, at $631.8 billion in assets Tuesday morning, edged ahead of SPY by about $1.5 billion, thus wrapping up the months-long asset race for those of us who are paid to pay attention to such things. But this is not the end of the jostling in the ever-evolving $10.7 trillion ETF space. Anyone paying even cursory attention to the asset flow data beneath the ETF industry can appreciate the shifting dynamics along with various driving forces. Sure, VOO surpassed SPY's total assets after net inflows of $121.1 billion last year, nearly five times the $23.6 billion taken in by SPY. But Vanguard Group, overall, has become an asset magnet lately. According to the latest data from ETFGI, Vanguard's $36 billion worth of January inflows represented 40% of the $90 billion that went into ETFs last month. The next-closest firm was BlackRock's iShares, which took in $9.6 billion. State Street Global Advisors, which launched SPY in 1993 as the first U.S. ETF, experienced $11.3 billion worth of net outflows in January. But State Street sees silver linings in its lineup—even as SPY loses its crown. 'It speaks to the maturation of an industry where investors have so many different options to get exposure to broad market equity indexes,' said Matt Bartolini, head of SPDR Americas Research at State Street. He points to the $60 billion SPDR Portfolio S&P 500 ETF (SPLG), which took in $20 billion last year and has already taken in $4 billion this year. On a side-by-side comparison, VOO and SPY each have characteristics that make them viable ETFs for a long time to come. SPY, which charges 9 basis points, has a liquidity advantage that is attractive to options traders and sophisticated investors. 'SPY is a unicorn of an ETF,' Bartolini said. 'Last year it traded over $9 trillion in the secondary market; it's used by a diverse range of clients with diverse motivations and buying behaviors.' Meanwhile, at 3 basis points, VOO likely appeals to investors looking for low-cost broad market index exposure. To that, Bartolini points to SPLG, which charges just 2 basis points. 'It's great to be the biggest ETF in the world, but it only matters if your clients are happy,' he added. Vanguard appears to be hitting on all cylinders following fee cuts to more than half its ETF lineup just last month. But even Vanguard might be facing a wall as an ETF issuer with just six active funds at a time when investor appetite shows a shift toward active strategies. Vanguard also stands out as one of the cryptocurrency ETF holdouts, essentially shutting the door on the most popular ETF category. In an emailed comment regarding the VOO milestone, Rodney Gomegys, Global Head of Equity Investment Group at Vanguard, credited Vanguard's 'unmatched focus on the best interests of our investors.' 'Throughout 2024 and continuing into early 2025, the market environment has been generally favorable to large-cap U.S. equities, which has contributed to continued enthusiasm for S&P 500 ETFs and other large-cap strategies across the industry' he added. 'And as ETF model portfolios continue to gain traction with investors and advisors, allocations to broadly diversified, low-cost, highly liquid ETFs like VOO have continued to increase.'Permalink | © Copyright 2025 All rights reserved Sign in to access your portfolio
