5 ETFs to Watch as the U.S. Government Shutdown Shakes the Markets

Core Insights - The U.S. federal government shutdown can lead to furloughs, operational delays, and regulatory slowdowns, indirectly affecting ETFs despite continued trading on major exchanges [1] Group 1: Economic Impact - Duration of the shutdown is critical; longer shutdowns increase the potential for real economic impacts such as delayed contracts and budget disruptions [2] - Delays in macroeconomic data releases can increase market volatility and reduce visibility for fund managers and investors [2] Group 2: Sector-Specific Risks - Certain sectors, including travel, government contracting, and regulatory-heavy industries, are more vulnerable to the effects of a government shutdown [2][4] - ETFs related to these sectors may experience heightened risks due to their exposure to government operations and contracts [4] Group 3: Fund Operational Risks - Most ETFs will continue to operate normally, but new launches or complex fund structures may face delays due to staffing impacts at the U.S. Securities and Exchange Commission [3] - Delayed SEC approvals for new ETF launches or structural changes can hinder market innovation and responsiveness [4]