Latest news with #Strategas
CNBC
6 days ago
- Business
- CNBC
Buffer ETFs keep booming, and Wall Street is now betting investors want more options
Buffer ETFs are continuing to rake in cash from investors, and fund issuers have been rushing to create more variations to capitalize on the boom. The category had its biggest month of inflows ever in March and now has more than $70 billion in assets, according to data from ETF Action compiled by Strategas. Through June, the category was outpacing last year's flows and on track for another record year, even with a recent slowdown amid the stock market comeback. The basic version of a buffer fund looks like this: a fund gains exposure to a broad index, like the S & P 500 , using a combination of long-term options. The options are structured such that the fund loses nothing in certain downside scenarios, creating the "buffer," but in exchange gives up some upside in the event the market rallies. "For the most part, investors aren't necessarily looking to knock the lights out. They want to get a fair return and they want to protect their assets. They're concerned about the downside," ProShares CEO Michael Sapir. As the category has grown, the variety of funds has increased dramatically — both in timeline and risk profile. For example, Innovator launched funds last month that aim to generate positive returns during some market declines by effectively adding on a short position within the options strategy. A new ProShares suite of " dynamic " buffers reset every day, tapping into the zero-day options boom. Even Cathie Wood's Ark Invest has filed to launch buffer products built on the firm's notoriously volatile ETFs. Some of the ETFs are even pitched on more upside as opposed to downside protection. A series of FT Vest Accelerator funds trades some initial upside for amplified returns during big market rallies. "It's been well appreciated as the downside protection play, but there are other ways you can massage the distribution, if you may," said Karan Sood, CEO of Vest Financial, which is also the firm behind some of the most popular traditional buffer funds on the market. Performance and risks Buffer ETFs are an outgrowth of bespoke structured products and even mutual funds before them. The ETF category took off after 2022, which saw stocks and bonds fall in tandem and created an opening for a product that offered additional downside protection. Generally speaking, buffer ETFs seem to have performed well. A recent analysis by Morningstar's Jeffrey Ptak showed that buffer funds had generally succeeded over a five-year period ended in February. Still, there are risks. For one, the longer-term funds typically require an investor to buy on the launch or rebalance date and hold through the entire period to achieve the stated outcome. This is one reason for the variety of funds with different start dates, and can make comparing performance between ETFs tricky. The ProShares dynamic series is one potential solution here, though the funds are less than a month old and it remains to be seen if the daily rebalance strategy will satisfy investor demands for peace of mind. And even if a fund is delivering its stated returns, that might not be a smart move for every investor. Over multiyear periods, products with capped upside could underperform the broader market, even before accounting for the fees of buffer funds, which are typically higher than simple index products, often above 0.75% annually. These complicating factors make financial advisors the main audience for buffer products, and many of them are becoming "power users" and using multiple funds, Sood said. "A majority of the flow in our buffer ETFs is not coming from self-directed advisors but really from intermediaries — so financial advisors acting on behalf of their clients. They're the ones who are using buffer products," Sood said.
CNBC
03-07-2025
- Business
- CNBC
Tax bill will 'sterilize' some of the negative impacts of Trump's tariffs: Strategas' Dan Clifton
Dan Clifton, Strategas head of policy research, joins 'Squawk Box' to discuss the House vote on President Trump's megabill, details of the tax bill impact on the U.S. economy, state of U.S. trade negotiations, and more.
CNBC
24-06-2025
- Business
- CNBC
The market will be surprised how pro-growth GOP bill is short-term, says Strategas' Dan Clifton
Dan Clifton, Strategas head of Washington policy research, joins 'The Exchange' to discuss Trump's Big Beautiful Bill going through congress and it's impact on markets.
CNBC
08-06-2025
- Business
- CNBC
Stock futures are little changed on Sunday evening with trade talks, inflation data on deck in week ahead: Live updates
U.S. equity futures were mostly flat on Sunday evening with the S&P 500 trading near a record high and a busy week of potential market-moving news ahead. S&P 500 futures added less than 0.1%. Nasdaq 100 futures gained less than 0.1%, while futures tied to the Dow Jones Industrial Average ticked up 27 points, or less than 0.1%. The move in futures comes after all three of the major indexes notched their second-straight winning week. The S&P 500 closed above the 6,000 level for the first time since Feb. 21, and is now less than 3% away from its record closing high. Chris Verrone, chief market strategist Strategas, said Friday on "Closing Bell" the rally shows that concerns about tariffs and the U.S. economy are easing among many traders and investors. "The message of the market is still one that is largely pretty constructive here," Verrone said, mentioning S&P 500 hitting a three-month high. "Maybe most importantly, cyclicals continue to hum along. I know the data on balance has been softer, but the market's saying ignore it. Cyclicals making new highs versus defensives says, 'Hey, the economy's largely OK here,' " he added. The coming week will bring plenty of opportunities to either reinforce or undermine the market's confidence. On Monday, officials from the U.S. and China are expected to hold trade talks in London, President Donald Trump announced Friday. In the U.S., Apple's 2025 Worldwide Developer Conference kicks off on Monday. The tech giant's stock has been an area of weakness this year, sinking more than 18%. Inflation data is expected to be a key topic later in the week. The latest consumer price index is due out on Wednesday, followed by the producer price index on Friday. Traders will be looking for clues as to how the current tariff rates are flowing through the economy. A new consumer sentiment reading from the University of Michigan — which includes data around inflation expectations — is due out on Friday. Futures were calm when trading resumed on Sunday evening, with the three main futures contracts drifting marginally higher. — Jesse Pound The communication services group was the top performing sector in the S&P 500 last week, gaining 3.19%. The sector's three-biggest stocks — Alphabet , Meta Platforms and Netflix — all finished higher on the week. Stock chart icon The communications services group was a strong performer last week. Meanwhile, consumer staples was the worst performing sector, sinking 1.57%. Small caps were another bright spot, as the Russell 2000 gained 3.19% for its eighth positive week in 9. — Jesse Pound, Christopher Hayes
CNBC
04-06-2025
- Business
- CNBC
We haven't fully uncovered the breakup between Trump and Musk here, says Strategas' Dan Clifton
Dan Clifton, Strategas head of policy research, joins 'Squawk Box' to discuss Elon Musk's criticism of President Trump's tax and spending bill, whether the bill can muster enough votes to pass in the Senate, details of Trump's big bill, and more.
