Latest news with #PhilBlancato
Yahoo
03-07-2025
- Business
- Yahoo
Are Gambling ETFs Worth the Bet?
Can clients hit the jackpot investing in gambling-themed ETFs? The global online gambling industry recently reached more than $70 billion in revenue, according to the American Gaming Association, with online casinos and sports betting driving growth after a 2018 Supreme Court decision opened up the industry to some 38 states and the District of Columbia. The boom has even fueled Superbowl ads and new smartphone apps that let people parlay directly from their pockets. Still, experts say ETFs tracking the burgeoning industry remain small compared with more traditional options and that their success depends largely on broader economic factors and market swings. 'There was a belief for a long time that gaming was, in and of itself, recession-proof, and that people are always going to smoke, drink and gamble,' said Phil Blancato, Osaic's chief market strategist. 'The pandemic changed that narrative.' READ ALSO: Fixed Income ETF Assets Hit Record $2T and Crypto ETFs Are Diversifying. Can Demand Keep Up? The classic 'Atlantic City model' of driving down the Jersey Turnpike to gamble has now been replaced by widespread online accessibility, Blancato said. In turn, that has opened up the market to older Americans who don't want to travel, and younger, more chronically online ones. Year-to-date figures back up the industry's booming status: Roundhill Investments' Sports Betting & iGaming ETF (BETZ) is up 25.33%. Invesco's Next Gen Media and Gaming ETF (GGME) is up 19.88%. That boon has also led to an influx of new products, like Roundhill's ETF, which launched in 2020 during the height of the pandemic. 'Looking ahead, we expect further growth through mobile gaming and wagering,' said Dave Mazza, Roundhill's CEO. 'We think BETZ is best used as a satellite exposure.' For Blancato, gambling ETFs are best utilized in small doses — no more than a 3% or 4% allocation — and in bullish markets environments. Bankroll the Dice. One thing that could be a game-changer is integration with traditional banks. As gambling becomes more integrated into retail investors' everyday lives, Blancato predicts these ETFs will have stakes in banks in the near future. 'There's going to be crosscurrents between your banking account and your gaming account,' he said. 'If there's a crossover into the mainstream by making [gambling] part of your greater financial picture, I think it could change the narrative.' 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.
Yahoo
16-06-2025
- Business
- Yahoo
Who Benefits Most from Dual-Share Class ETFs?
The benefits of dual share classes may not be shared with the whole class. With ETF dual share class approval likely around the corner — and as asset managers continue to convert their existing mutual funds into exchange-traded funds — advisors and fund managers are busy preparing to offer the structures to clients. Even Vanguard, the only company to offer the structure before its patent expired in 2023, recently filed as well. The strategy would help mutual fund shareholders avoid unwanted capital gains distributions and retirement savers who would gain access to ETF share classes of traditional mutual funds in their 401(k)s. Mutual funds in general may become obsolete, said Osaic's chief market strategist Phil Blancato. 'The seesaw from mutual fund to ETF asset flows is going to flip so significantly that we'll be surprised by it, if not shocked by it,' he told ETF Upside. Knowing which clients to provide dual share classes to — and what types of accounts stand to benefit the most — is key for advisors looking to maximize portfolios. READ ALSO: Single-Stock ETF Market Swells With Firehose of New Products and Invesco Hires Crypto Product Leader from JPMorgan As the floodgates open and allow for a broadly available multishare class structure for the first time ever, experts say advisors need education, and a plan in place, to ensure they'll stay ahead of the curve. Some clients with unrealized capital gains receive distributions, wanted or not, from an actively traded mutual fund every time there's a tax event or active trading. Dual share classes can help them avoid this because ETF securities can change hands without a distribution, said Brian Spinelli, Halbert Hargrove's co-chief investment officer. 'This could really help us get away from some traditional mutual funds that clients have had to sit on for years, if not decades, because of capital gain issues,' he said. Three other pros of the structure will benefit clients with retirement accounts, according to Blancato: Savings: ETFs' cheaper fees, lower administration costs, and tax efficiencies will make them a key tool for clients looking to maximize their retirement contributions. (Recent research shows brokerages stand to lose up to $30 billion in fees following approval.) Transparency: Shareholders will be informed more frequently where their money is going due to ETF reporting standards. Flexibility: Dual share class approval will allow for investing in the mutual fund equivalents of ETFs that might not be allowed in certain 401(k)s because of companies' rules against including them in retirement plans. Back to School: Another necessity is educating both clients and advisors — particularly in a world where mutual funds may play a diminished role in the investment landscape. 'Seventy percent of the country's assets are with people over the age of 65 who have no idea what they're invested in,' Blancato said. 'There's got to be something that says: 'Hey, your account is going to change. You might notice some changes. Here's why.' I think that's going to be critically important.' 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
CTV News
09-06-2025
- Business
- CTV News
Robinhood shares fall as S&P 500 inclusion hopes dashed
Shares of Robinhood Markets dipped six per cent on Monday after S&P Dow Jones Indices made no changes to the S&P 500 membership following recent speculation that the online brokerage would be added to the index. S&P Dow Jones Indices announced late on Friday that it would not be making any changes to the components of the benchmark S&P 500 as part of quarterly rebalancing. Robinhood's stock rallied in recent weeks, touching its highest level since the company's 2021 market debut on Friday, as investors priced in a possible inclusion in the index. Bank of America analysts earlier this month touted the company as the 'prime candidate' to join the S&P 500. Robinhood's shares were down 6.1 per cent at US$70.33, set to snap a six-day winning streak. Marketing platform AppLovin, which also rallied last week on bets of inclusion, dropped 4.6 per cent to $398.7. 'When smaller companies are looking for inclusions in the S&P or any index, it means millions of dollars could potentially flow to them without a substantive event,' said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. 'So, speculative traders have to expect volatility because it is often the case that you'll see something like this happen where expectations are one thing and reality is another.' To be included on the index, a company has to be U.S. domiciled, listed on a prominent U.S. exchange and have a market capitalization of $20.5 billion or higher, among many other criteria. Robinhood had a market valuation of $66.1 billion as of Friday's close, with shares more than doubling in value this year and trading well above its IPO price of $38 apiece. Crypto-exchange operator Coinbase Global was the latest addition to the S&P 500 last month, making it the first digital asset player to be included in the index. Stephens analyst Melissa Roberts said she expects Nippon Steel's 5401.T acquisition of S&P 500 member U.S. Steel X.N to be the next window for shake-up in the index members. (Reporting by Shashwat Chauhan in Bengaluru. Additional reporting by Chuck Mikolajczak. Editing by Shreya Biswas and Maju Samuel)
Japan Times
29-04-2025
- Business
- Japan Times
Big Tech's earnings problem is estimates may be way too high
The last time Big Tech delivered earnings, Donald Trump had just started his second term, stocks were soaring on expectations of a pro-growth agenda and investors' main worry was how long it would take companies to convert their artificial intelligence spending into profits. Three months later, they are facing a far bleaker picture. This week's quarterly results from Microsoft, Apple, Meta Platforms and will land in a market obsessed with every twist of a trade war that's wiped $5.5 trillion from the S&P 500 Index. AI concerns have taken a back seat to angst over the possibility of a tariff-induced recession, while safe havens like gold have become the trade de jour for investors too rattled to buy stocks on the cheap. Even with all the uncertainty, Wall Street isn't giving the companies' estimates much wiggle room. Analysts expect what is known as the Magnificent Seven — which also include Google-parent Alphabet, Tesla and Nvidia — to deliver an average profit growth of 15% in 2025, a forecast that's barely budged since the beginning of March despite the flareup in trade tensions. That raises the stakes for the four megacaps reporting this week, which combined have a nearly 20% weighting in the S&P 500. Traders are unlikely to forgive earnings shortfalls in an already fearful market climate, despite steep declines in the companies' share prices and improved valuations. Dire outlooks from the industry behemoths would be poorly received, especially if they bolster fears of muted corporate spending ahead. A woman walks inside an Apple store in Paris on April 23. | REUTERS "Any modicum of a weaker than expected number is going to cause a further selloff because of the concern around tariffs,' said Phil Blancato, chief market strategist at Osaic Wealth, who believes this year's weakness in megacaps is a buying opportunity. Markets got an early read on how Big Tech might be faring last week. Tesla reported its worst quarter in years, though traders cheered signs that chief executive Elon Musk intends to step away from his government work and focus more on the electric-vehicle maker. Alphabet beat expectations but offered little future guidance. The Bloomberg Magnificent 7 index jumped 9.1% last week amid a broader market rebound, though it's still down 15% in 2025. The index rose 0.3% on Monday, on track for its fifth straight positive session. The Nasdaq 100 Index rose 0.1%. A deeper look comes during a two-day stretch that starts with results from Meta and Microsoft on Wednesday. While many executives have declined to predict how tariffs might impact their bottom lines, Wall Street has been doing its own math. Based on a 22% tariff rate modeled by Bloomberg Economics, lower gross margins could result in a net income contraction of about 7% in 2025 for the S&P 500, compared with the current consensus estimate of nearly 12% growth, wrote Bloomberg Intelligence chief equity strategist Gina Martin Adams. Another key area of focus will be spending: The four biggest spenders — Microsoft, Alphabet, Amazon and Meta — are projected to pour roughly $300 billion into capital expenditures in their current fiscal years. While the companies have pledged to maintain that pace in 2025, Microsoft's sudden decision to pause work on some data centers suggests cloud computing providers may be reevaluating expenditures. A NVIDIA logo in Taipei on April 16 | REUTERS Apple, one of the companies most exposed to tariffs due to its supply-chain reliance on China, may benefit from a pull-forward in demand from consumers seeking to avoid higher prices. However, those sales are seen as a one-off benefit, with tariffs sapping demand in future quarters. Amazon faces tariff risks to its e-commerce and advertising businesses, though a hit to profits could be cushioned by earnings in its high-margin web-services unit, according to Jefferies analyst Brent Thill. That said, there's little expectation that executives will be able to give estimates with any degree of confidence, given the high level of macroeconomic uncertainty. American Airlines Group and Skechers USA are among companies that have abandoned forecasts this quarter. Michael Shaoul, founder of the ION Macro Fund, said it will be difficult for executives to convince the market that they have a true view into financial performance in coming quarters. "I think the more experienced management aren't even going to try,' he said. A bullish argument, of course, is that tech giants' dominant industry positions and robust balance sheets make them better suited to withstand an economic downturn than other companies — even if the earnings picture is cloudy. The Magnificent Seven are also less richly valued following the recent selloff: Alphabet, for example, trades at 17 times profits estimated over the next 12 months, compared with an average of 21 times over the past decade, according to data compiled by Bloomberg. That could boost the appeal of the Magnificent Seven to dip-buyers, especially if signs of easing in the global trade war emerge. A flash of that came last week, when stocks soared after Trump said a deal with Beijing would significantly reduce the tariffs he's posted on Chinese goods. But for Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, it all comes down to the denominator in the price-to-earnings ratio. "The valuations are getting more interesting down here, but we haven't pulled the trigger yet,' he said. "There are a lot of questions on the E-side of the equation.'
