In this episode, we explore why more and more investment professionals are allocating to call-writing funds, long/short strategies, and commodities.

Ryan discusses factor investing with Chris Bush, portfolio manager at First Trust, as well as risk and opportunities for various industries and themes, including artificial intelligence, regional banks, and more.

• Net inflows for US-listed ETFs totaled $112.4 billion in March, bringing total ETF assets under management to $8.73 trillion.
• Equity ETFs had net inflows totaling $81.7 billion in March, bringing trailing 12-months (TTM) net inflows to $523.2 billion. Active equity ETFs accounted for $20.2 billion in net inflows in March, compared to $61.5 billion in net inflows for passive equity ETFs. Total AUM in actively managed equity ETFs was $400.9 billion, accounting for 5.7% of all equity ETF assets ($6.98 trillion), as of 3/31/24.
• Fixed income ETFs had net inflows totaling $18.2 billion in March, bringing TTM net inflows to $202.4 billion. Active fixed income ETFs accounted for $7.0 billion in net inflows in March, compared to $11.2 billion in net inflows for passive fixed income ETFs. Total AUM in actively managed fixed income ETFs were $194.9 billion, accounting for 12.6% of all fixed income ETF assets ($1.55 trillion), as of 3/31/24.
• Commodities ETFs had net inflows totaling $0.5 billion in March, bringing TTM net outflows to $14.2 billion. Precious metals ETFs (+$0.3 billion) was the strongest commodity sub-category in March.

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In a market that has been driven significantly by momentum and speculation this year, investors still have an eye on what matters in the end. Earnings! And if that focus continues, future earnings forecasts suggest a further broadening of the market is in order. The performance of the Magnificent 7 stocks in 2023 was stunning. The basket accounted for 58% of the 26.23% gain in the S&P 500 Index and the 7 stocks increased by an average of 76% for the year. Earnings growth for the Magnificent 7 was incredible for several reasons. NVIDIA had a massive increase in profits as a result of its Artificial Intelligence (AI) semiconductor chips. Apple, Google, and Microsoft had solid earnings growth, although Tesla saw earnings decline. The real earnings stars though were Meta and Amazon. Both saw huge earnings increases in 2023 as a result of significant cost cutting and easy comparisons to the disastrous earnings both companies reported for 2022. Meta increased earnings by nearly 70% in 2023 after seeing a 37% decline in earnings the prior year. Amazon actually lost money in 2022 after earning over $30 billion in 2021. This past year they again earned over $30 billion. Both companies rebounded and earnings growth was off the charts compared to 2022 declines.

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In this episode, Ryan is joined by Jay Gragnani, Senior Market Strategist at Nasdaq Dorsey Wright for a discussion about how financial professionals are utilizing technical analysis and Dorsey Wright’s research as an objective input for their decision-making process.

In this episode of the podcast, Ryan is joined by Bill Housey, Managing Director of Fixed Income at First Trust for a discussion about the US economy, the Federal Reserve, interest rates, and why Bill believes that an asymmetry between risk and return has shifted in favor of bond investors.

One of our favorite Yogi Berra sayings is “Nobody goes there anymore. It’s too crowded.” Momentum was the most dominant equity factor in February (see chart above). In fact, it has been the main factor behind the massive equity rally that started in late October that  has added almost 1,000 points to the S&P 500 Index in four months. The momentum factor is also extremely crowded... but everyone is still going there. For now. While we employ the momentum factor in our research, we prefer a multifactor approach and also like to see tangible evidence why the momentum factor is working and can continue to outperform. That is where our concern lies.

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• Net inflows for US-listed ETFs totaled $66.7 billion in February, bringing total ETF assets under management to $8.34 trillion.
  
  
• Equity ETFs had net inflows totaling $48.9 billion in February, bringing trailing 12-months (TTM) net inflows to $444.1 billion. Active equity ETFs accounted for $15.5 billion in net inflows in February, compared to $33.4 billion in net inflows for passive equity ETFs. Total AUM in actively managed equity ETFs was $365.9 billion, accounting for 5.5% of all equity ETF assets ($6.65 trillion), as of 2/29/24.
  
  
• Fixed income ETFs had net inflows totaling $11.6 billion in February, bringing TTM net inflows to $212.0 billion. Active fixed income ETFs accounted for $6.5 billion in net inflows in February, compared to $5.1 billion in net inflows for passive fixed income ETFs. Total AUM in actively managed fixed income ETFs were $186.7 billion, accounting for 12.3% of all fixed income ETF assets ($1.52 trillion), as of 2/29/24.
  
  
• Commodities ETFs had net outflows totaling $2.5 billion in February, bringing TTM net outflows to $15.1 billion. Precious metals ETFs (-$2.5 billion) was the weakest commodity sub-category in February.

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In the episode of the podcast, Ryan speaks with Jon DiGiovanni, Managing Director of Direct Indexing and Separate Managed Accounts at First Trust, about some of the reasons that Direct Indexing has quietly been one of the fastest growing innovations in the financial services industry. 

After an unusually good year for US equities in 2023, concerns about high valuations and concentration risk for U.S. equity indices, such as the S&P 500® Index, have led some financial professionals to seek  potentially better opportunities among small- and mid-capitalization ("SMid-cap") stocks.  However, fears that an economic recession could be on the horizon have led some to shy away from tilting portfolio allocations towards smaller companies.  Below, we discuss these issues, highlighting why we believe that SMid-cap stocks may offer an attractive opportunity, but also why selectivity may be critical for navigating the current market environment.  We then discuss why we believe those seeking to increase allocations to SMid-cap stocks should consider the First Trust SMID Cap Rising Dividend Achievers ETF (SDVY).

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