3 Dividend ETFs to Ride the "Great Rotation" as Investors Leave Growth Stocks in Droves - 24/7 Wall St. S&P 5006,705.00 +1.23% Dow Jones46,931.60 +0.96% Nasdaq 10024,692.20 +1.50% Russell 20002,507.64 +1.36% FTSE 10010,346.10 +1.05% Nikkei 22554,529.50 +2.26% Live Nasdaq Composite: Tech Leads, Oil Eases With AI's Next Chapter in Focus Investing 3 Dividend ETFs to Ride the "Great Rotation†as Investors Leave Growth Stocks in Droves By Omor Ibne EhsanPublished Mar 16, 2:00PM EDT Quick Read Investors are gettin ...

Market Overview - U.S. equity markets experienced significant volatility on March 3, 2026, driven by geopolitical tensions in the Middle East, leading to a morning sell-off followed by an afternoon recovery [1] - Major indexes closed lower but recovered from session lows, with the Dow Jones Industrial Average down 403.51 points (0.8%) at 48,501.27, the S&P 500 down 64.99 points (0.9%) at 6,816.63, and the Nasdaq Composite down 232.17 points (1%) at 22,516.69 [2] Geopolitical Impact - The volatility was primarily triggered by a U.S. and Israeli military operation in Iran, which raised concerns about the closure of the Strait of Hormuz, a critical route for 20% of the world's oil [3] - Markets stabilized after President Trump announced U.S. support for escorting oil tankers and ensuring maritime trade safety, leading to a decrease in the Cboe Volatility Index (VIX) from a high of 28 to near 23 [3] Earnings Highlights - The retail sector showed resilience, with Target (TGT) shares rising 6.7% after reporting a quarterly profit that exceeded expectations, indicating strong consumer spending despite inflation [4] - Best Buy (BBY) shares increased by 6% following a mixed quarterly report that highlighted improving margins [4] Technology Sector Developments - Investors are closely monitoring MongoDB (MDB) for its growth outlook amid a risk-off environment, while CrowdStrike (CRWD) is expected to report quarterly results, with a focus on AI-driven demand and the geopolitical impact on enterprise security spending [5] Sector Performance - Energy and defense stocks benefited from the day's uncertainty, with Exxon Mobil (XOM) and Chevron (CVX) tracking a nearly 7% increase in West Texas Intermediate (WTI) crude prices, which settled above $76 per barrel [6] - Northrop Grumman (NOC) remained strong as investors anticipated increased military spending [6] Technology Sector Challenges - Mega-cap tech stocks faced challenges as Treasury yields rose due to inflation concerns, with Nvidia (NVDA) down 1.3% and Apple (AAPL) down 0.5% despite new product announcements [7] - Tesla (TSLA) declined 2.6% as high-growth stocks were sold off in favor of more defensive positions [7] Upcoming Economic Indicators - The economic calendar includes the ADP Employment Report and ISM Services PMI, which will provide insights into the U.S. economy's health, with the February nonfarm payrolls report being a key focus for potential market volatility [8] - Earnings reports from Broadcom (AVGO) and Costco (COST) later in the week will offer further insights into the AI infrastructure boom and consumer health [8]

Core Viewpoint - The article discusses the ongoing shift in the stock market from large-cap stocks, particularly the "Magnificent Seven," to small-cap stocks, suggesting that investing in small-cap ETFs could yield significant gains as interest rates decline and earnings growth broadens beyond major tech companies [1]. Group 1: Market Trends - The stock market is experiencing a rotation where capital is moving from large-cap stocks to small-cap stocks, indicating a change in market conditions rather than a uniform market movement [1]. - Small-cap stocks are gaining attention due to broadening earnings growth and the expectation of falling interest rates, which are beneficial for their performance [1]. Group 2: Recommended Small-Cap ETFs - **Vanguard Small-Cap Index Fund ETF (VB)**: This ETF has a low expense ratio of 0.03% and a 30-day SEC yield of 1.3%. It has increased nearly 7% year-to-date, outperforming many tech stock ETFs, with over 21% of its holdings in industrials [1]. - **Avantis International Small Cap Value ETF (AVDV)**: AVDV has seen a remarkable gain of nearly 61% in the past year, primarily due to dollar weakness and declining international interest rates. It offers a 1.42% dividend yield with an expense ratio of 0.25% [1]. - **Schwab Fundamental US Small Company ETF (FNDA)**: FNDA focuses on company fundamentals rather than market value, resulting in a year-to-date increase of 9.5% and a 19% rise over the past year. It has 897 holdings and yields 1.11% with a 0.25% expense ratio [1].

Core Insights - Significant outflows from large-cap tech stocks, particularly the Magnificent Seven, have been observed due to AI capex fatigue in 2026, with these stocks down over 7% year-to-date [2] Group 1: Company Overview - Seeking Alpha has a quantitative stock rating system that interprets data for investors, providing insights on investment directions [3] - The platform's quantitative strategies are led by Steven Cress, who has over 30 years of experience in equity research and portfolio management [3] Group 2: Market Trends - The shift in investment focus is moving from large-cap tech stocks to small-cap and more defensive, income-oriented stocks as investors react to market conditions [2]

Historically, BHP has been viewed as a proxy for the Chinese property market. Iron ore was the cash cow that funded dividends, while other commodities played supporting roles. Today’s report flips that narrative. The company has successfully transitioned its portfolio exposure toward future-facing commodities. This pivot effectively removes the China discount often applied to miners, re-rating the stock from a cyclical value play to a secular growth proxy. By aligning its production with the needs of the di ...

Core Insights - Growth outside of America has been limited over the past decade, but this trend is shifting, particularly in Europe, as countries like Germany begin to leverage their balance sheets in response to new global military and economic alliances [1][3] Group 1: Investment Opportunities - The European economy is undergoing a rebalancing due to geopolitical and trade shifts, creating numerous new investment opportunities [3] - Robert Lancastle, a senior fund manager, is optimistic about the investment landscape, particularly in Europe, where he sees a potential inflection point in 2026 [4] - The discount of European stocks compared to U.S. equities is narrowing, indicating a more favorable investment environment [7] Group 2: Germany's Economic Strategy - Germany is looking to leverage its conservative balance sheet, partly due to challenges faced by its auto sector from Chinese competition and its previous reliance on Russian energy [5] - The release of Germany's debt brake a year ago could potentially unleash $1 trillion in government spending, with private-sector involvement possibly increasing this to $1.5 trillion [7] - Siemens has recently upgraded its outlook, reflecting a positive shift in the European investment climate [6]

RT Merryn Somerset Webb (@MerrynSW)The great rotation out of the US into pretty much anywhere else continues. You'll have some EM, Japan, EU etc. Maybe you are brave enough to have some UK small caps. But have you any of the ETFs that give you exposure to Africa? Thought not. https://t.co/QHQzKIWCl4 ...

Core Insights - Wall Street is experiencing a "Great Rotation," with investors moving away from high-flying technology stocks towards smaller companies and defensive sectors due to factors like "AI capex fatigue," a resilient U.S. economy, and expectations of a less-dovish Federal Reserve [1][3][10] Investment Trends - The five largest U.S. cloud and AI infrastructure providers, including Microsoft, Alphabet, Amazon, Meta, and Oracle, are projected to spend between $660 billion and $690 billion in capital expenditures by 2026, nearly doubling the spending levels of 2025 [2] - Pure-play AI companies like OpenAI and Anthropic are experiencing strong revenue growth, but their combined revenues do not match the significant infrastructure investments made in them [2] Market Performance - Approximately 65% of S&P 500 stocks are outperforming the index, indicating a broadening market breadth not seen in years, suggesting leadership is expanding beyond just mega-cap tech [4][10] - The State Street SPDR Portfolio S&P 500 Value ETF (SPYV) has increased by about 1.1% over the past month, while the State Street SPDR S&P 500 ETF Trust (SPY) has declined by 1.8% during the same period [5] Sector-Specific ETFs - The State Street Consumer Staples Select Sector SPDR Fund (XLP) has gained about 10% over the past month and 9.6% over the past year, indicating strong performance in non-cyclical sectors [6] - The First Trust Utilities AlphaDEX Fund (FXU) has risen by 7.8% in the past month and 22.9% over the past year, benefiting from the demand for utilities amid the AI boom [7] - The Vanguard High Dividend Yield ETF (VYM) has added approximately 4.7% over the past month, with an annual yield of 2.24%, appealing to investors seeking income in a volatile market [8] Small-Cap Performance - Small-cap stocks have outperformed large-cap stocks this year, supported by a domestic focus, dollar strength, and an improving earnings outlook, with the S&P SmallCap 600 index expected to return to positive growth in 2025 [11]

Core Viewpoint - The technology sector is experiencing a significant sell-off, particularly in software and semiconductor stocks, leading to discussions about a potential market correction or a "great rotation" into other sectors [2][4]. Market Trends - A rotation is evident in the market, with the S&P equal weight index reaching a new all-time high, contrasting the performance of the S&P 500 [4]. - The tech sector has seen a notable pullback since late October, with major tech stocks peaking around Halloween and subsequently declining [5]. Investment Sentiment - Concerns are rising regarding the AI trade and spending, particularly after Alphabet announced a doubling of its capital expenditures [5][8]. - There is a differentiation in spending among companies, with some like Alphabet maintaining strong cash flow despite increased capex, while others like Meta are facing challenges as their capex impacts cash flow negatively [9]. Economic Indicators - The market is witnessing a shift towards hard assets and defensives, driven by expectations of economic activity accelerating due to fiscal impulses and supportive monetary policy [12][13]. - Recent movements in the dollar have contributed to an unwind in commodities, indicating a more defensive market posture [14]. Volatility and Risk - Increased volatility in other asset classes, including crypto markets, suggests a general risk aversion among investors, with continued weakness in the crypto complex [16][17]. - The S&P 500 is being closely monitored around the 6,800 level, which is significant for potential downside dynamics [18].

Core Viewpoint - The recent gold market pullback, triggered by the announcement of Kevin Warsh as the new Fed Chair, is seen as a healthy correction from overbought conditions, presenting a buying opportunity for investors in precious metals [2][4]. Group 1: Market Dynamics - The gold correction is viewed as a chance for investors to reassess their positions rather than panic [4]. - The announcement of Warsh, perceived as less dovish, may still align with a future interest rate reduction in 2026, as indicated by President Trump [2]. - Crescat's portfolio of undervalued precious and critical metals miners has outperformed gold and silver benchmarks, with Tectonic Metals rising 28% despite a 9% drop in spot gold [3][2]. Group 2: Long-term Trends - The U.S. dollar is believed to be on the verge of a third devaluation wave, following historical precedents during the Great Depression and the end of the Bretton Woods system [6][7]. - Current U.S. debt and deficit levels are at historic highs, with S&P 500 market multiples nearing those of major market peaks in the past [8]. - A significant rotation of global investors into precious metals and resource equities is anticipated, moving away from U.S. megacap tech stocks [9]. Group 3: Central Bank Actions - Since mid-2022, global central banks have been increasing their gold reserves, with net quarterly purchases significantly above the previous decade's average, indicating a long-term trend [25]. - The U.S. dollar's share of global foreign exchange reserves has fallen below 40%, while gold's share has surpassed 30%, marking a historical shift in reserve composition [27][29]. Group 4: Mining Sector Outlook - The performance of senior gold miners in 2025 suggests the beginning of a multi-year cycle, with potential benefits trickling down to junior and development-stage miners [14]. - Major gold miners are currently trading closer to their 10-year averages rather than at peak multiples, indicating room for growth [15]. - The widening spread between gold prices and operating costs is driving profitability, with all-in-sustaining costs for major miners growing at a rate lower than gold price appreciation [18][21]. Group 5: M&A and Exploration - Current M&A activity in the precious metals sector remains below peak levels, suggesting the industry is still in the early stages of strategic re-rating [31]. - There is potential for increased acquisitions of exploration-stage companies, with significant cost differences between exploration and late-stage development projects [33]. - The mining sector is expected to see a favorable backdrop for capital expenditures, driven by rising demand for metals and a structural shortage due to underinvestment [36].