Core Insights - Wall Street faced significant volatility in 2025, while international markets showed stability or growth, driven by trade uncertainties under Trump's administration impacting the U.S. economy more severely than international markets [1] U.S. & International ETF Performance - Roundhill Magnificent Seven ETF (MAGS) increased by 25.5%, SPDR S&P 500 ETF Trust (SPY) rose by 18.1%, Invesco QQQ Trust (QQQ) gained 22.3%, and SPDR Dow Jones Industrial Average ETF Trust (DIA) advanced 14.9% in 2025 [2] - Vanguard Tax Managed Fund FTSE Developed Markets ETF (VEA) increased by 31.6%, iShares Asia 50 ETF (AIA) surged by 44%, iShares MSCI Emerging Markets ETF (EEM) rose by 31.2%, iShares MSCI Eurozone ETF (EZU) jumped by 37.4%, and iShares MSCI ACWI ex US ETF (ACWX) grew by 29.7% [3] Drivers of International ETFs - U.S. tech stocks, particularly the "magnificent seven," faced overvaluation concerns, impacting tech-centric indexes negatively, while European markets like STOXX Europe 600 benefited from a more balanced structure with top 10 stocks comprising only 17% of the index [4][5] - International markets were generally undervalued compared to U.S. stocks, with EZU's P/E ratio at 17.83X compared to Vanguard S&P 500 ETF (VOO) at 29.19X [6] - P/E ratios for various international ETFs include iShares MSCI Japan ETF (EWJ) at 16.40X, EEM at 15.85X, iShares China Large-Cap ETF (FXI) at 10.79X, iShares India 50 ETF (INDY) at 22.11X, and iShares MSCI Brazil ETF (EWZ) at 10.69X [7] Economic Stimulus and Policy Differences - The European Central Bank initiated rate cuts earlier in 2025 but halted further easing due to trade uncertainties, while India and China pursued policy stimuli [8] - The U.S. adopted a contrasting approach with budget cuts and reduced federal expenditures, with the Federal Reserve enacting three rate cuts since September [9] Top-Performing Country ETFs - iShares MSCI South Korea ETF (EWY) rose by 92.3% and Franklin FTSE South Korea ETF (FLKR) increased by 88.0%, driven by accommodative monetary policy and economic growth [12] - Global X MSCI Greece ETF (GREK) increased by 79.2%, supported by strong economic growth and an upgrade to developed market status [14] - iShares MSCI South Africa ETF (EZA) rose by 77.9%, with growth in the mining industry contributing to economic expansion [16] - iShares MSCI Spain ETF (EWP) increased by 77.5%, benefiting from a resilient labor market and gains in banks [17] - iShares MSCI Poland ETF (EPOL) rose by 76.7%, supported by protection from global trade tensions and fiscal stimulus from Germany [18]

Core Viewpoint - Low-volatility stocks and related ETFs, particularly the Invesco QQQ Low Volatility ETF (QQLV), are gaining attention as a viable investment option amid recent economic data suggesting a need for protective strategies in portfolios [2][6]. Group 1: Investment Strategy - QQLV tracks the Nasdaq Low Volatility Index, which is based on the premise that stocks with smaller drawdowns can yield better long-term returns [2][5]. - Investors are encouraged to consider low-volatility ETFs like QQLV for portfolio protection, especially in uncertain market conditions [3][4]. - The current allocation of QQLV, with 28.44% in consumer staples, presents a compelling value case despite the sector's struggles this year [6][7]. Group 2: Market Dynamics - Research indicates that low-volatility stocks have historically provided higher returns compared to high-volatility stocks, challenging traditional finance theories [5]. - QQLV's diversified exposure, including a combined 17% weight in consumer cyclical, healthcare, and materials stocks, enhances its attractiveness as a near-term investment [7]. - The sensitivity of low-volatility stocks to interest rates suggests that declining rates could further benefit QQLV, as these stocks behave similarly to long-duration bonds [8].

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1: Company Overview - Invesco aims to help people get more out of life through its investment services [1] - The firm provides a range of investment advisory services and does not sell securities [1] Group 2: Services and Offerings - Invesco offers educational content and expert investment views through its US Blog [1] - The company emphasizes the importance of understanding investment objectives, risks, charges, and expenses before investing [1] Group 3: Regulatory and Compliance Information - Invesco advises investors to consult legal or tax professionals for personalized tax information due to the complexity of federal and state tax laws [1] - The opinions expressed by Invesco's authors are based on current market conditions and may change without notice [1]

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco emphasizes the importance of understanding investment objectives, risks, charges, and expenses before making investment decisions [1] - The firm provides educational information but does not offer specific investment recommendations or tax advice [1] - Invesco's opinions are based on current market conditions and may change without notice, indicating a dynamic approach to investment management [1] Group 2 - Invesco Distributors, Inc. serves as the US distributor for Invesco Ltd.'s retail products and collective trust funds [1] - The company operates through various affiliated investment advisers that provide advisory services without selling securities [1] - Invesco Unit Investment Trusts are distributed by Invesco Capital Markets, Inc. and other broker-dealers, highlighting the firm's extensive distribution network [1]

Core Insights - Investors in the consumer staples sector face a choice between broader coverage with the Vanguard Consumer Staples ETF (VDC) and a focused strategy with the Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS) [1] Cost and Size Comparison - VDC has a significantly lower expense ratio of 0.09% compared to RSPS's 0.40%, making it more cost-effective for long-term investors [3][4] - VDC has a much larger asset under management (AUM) of $8.6 billion versus RSPS's $236.3 million, indicating greater investor confidence and liquidity [3] Performance and Risk Analysis - Over the past year, VDC has outperformed RSPS with a return of -0.4% compared to RSPS's -2.6% [3] - VDC has a lower maximum drawdown of -16.55% over five years compared to RSPS's -18.64%, indicating better risk management [5] Portfolio Composition - VDC holds 103 stocks and is heavily weighted towards major consumer defensive companies like Walmart (14.53%), Costco (12.00%), and Procter & Gamble (10.09%), providing broader diversification [6] - RSPS, with only 36 holdings, employs an equal-weighted strategy, giving each stock the same influence, which can lead to less diversification and a focus on smaller companies [7][9] Investment Implications - VDC is suitable for investors seeking low costs and willing to have larger companies influence returns, while RSPS appeals to those wanting a pure representation of the consumer staples sector [11]

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco offers expert investment views through its US Blog, encouraging individuals to stay informed [1] - The firm emphasizes the importance of reading the prospectus and considering investment objectives, risks, charges, and expenses before investing [1] - Invesco does not provide tax advice and highlights the complexity and variability of federal and state tax laws [1] Group 2 - The opinions expressed by Invesco's authors are based on current market conditions and may change without notice [1] - Invesco's investment advisory services are provided by affiliated investment advisers, and they do not sell securities [1] - Invesco Unit Investment Trusts are distributed by Invesco Capital Markets, Inc., and other broker-dealers [1]

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco emphasizes the importance of understanding investment objectives, risks, charges, and expenses before making investment decisions [1] - The firm provides educational information but does not offer specific investment recommendations or tax advice [1] - Invesco's opinions are based on current market conditions and may change without notice, indicating a dynamic approach to investment strategies [1] Group 2 - Invesco Distributors, Inc. serves as the US distributor for Invesco Ltd.'s retail products and collective trust funds [1] - The company operates through various affiliated investment advisers that provide advisory services without selling securities [1] - Invesco Unit Investment Trusts are distributed by Invesco Capital Markets, Inc. and other broker-dealers, highlighting the firm's extensive distribution network [1]

Core Insights - Mid-cap stocks are positioned to benefit from the next market rally as they are often priced more cheaply compared to large-cap stocks, despite holding similar growth potential [1] - Historically, mid-cap stocks have outperformed large-cap stocks, with the S&P 400 index gaining 2,679% since 1991 compared to the S&P 500's 2,021% [2] - If economic conditions remain favorable, mid-cap ETFs could yield annual returns of approximately 11% over the next few years [3] iShares Core S&P Mid-Cap ETF - The iShares Core S&P Mid-Cap ETF is the largest mid-cap core ETF, tracking the S&P 400 index, with an annual fee of 0.05% and a focus on profitable companies [5] - Its sector exposures include industrials (19.3%), consumer discretionary (15.3%), and financials (13.6%), providing diversification compared to the S&P 500 [6] - A total return of 35% for the iShares Core S&P Mid-Cap ETF over the next three years is considered reasonable if revenue growth and margin improvements occur [7] Vanguard Mid-Cap Value ETF - The Vanguard Mid-Cap Value ETF utilizes valuation metrics to ensure true value exposure, with a focus on financials and industrials, which typically perform well during economic growth [9][10] - The ETF's structure minimizes style drift, enhancing its potential for outperformance as market conditions improve [10] Invesco S&P MidCap Quality ETF - The Invesco S&P MidCap Quality ETF targets companies with strong fundamentals, such as return-on-equity and financial leverage, resulting in a concentrated portfolio of around 80 stocks [12] - This ETF aims to reduce downside risk while maintaining upside potential, making it suitable for investors concerned about mid-cap volatility [12][13] Overall Outlook for Mid-Cap Stocks - The outlook for mid-cap stocks remains positive due to good earnings growth, lower interest rates, and attractive valuations compared to large caps, suggesting a favorable investment environment over the coming years [14]

Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life.Be the first to know! Sign up for Invesco US Blog and get expert investment views as they post.Disclosure for all Invesco US articles: Before investing, carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. The information provided is for educational purposes only and does not constitute a ...

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco offers expert investment views through its US Blog, encouraging individuals to stay informed [1] - The firm emphasizes the importance of reading the prospectus and considering investment objectives, risks, charges, and expenses before investing [1] - Invesco does not provide tax advice and highlights the complexity and variability of federal and state tax laws [1] Group 2 - The opinions expressed by Invesco's authors are based on current market conditions and may change without notice [1] - Invesco's investment advisory services are provided by affiliated investment advisers, and they do not sell securities [1] - Invesco Unit Investment Trusts are distributed by Invesco Capital Markets, Inc., and other broker-dealers [1]