Join for a 100% Risk-Free trial and see if our proven method can help you too. You do not need to pay for the costly lessons from the market itself.I last covered the Schwab U.S. Dividend Equity ETF ( SCHD ) on 10.21 with an article titled “SCHD ETF: REIT Dividends Too Attractive To Exclude”. That article was motivated by the ETF’sSensor Unlimited is an economist by training with a PhD, with a focus on financial economics. She is a quantitative modeler and for the past decade she has been covering the mortg ...

Joining me now, Mo Hagbin, managing director at ProShares. Mo, thanks so much for being here at the desk with me. >> Thanks for having me.>> So, let's start by talking about ETF flows because you have some unique insights. Obviously, at ProShares, you get a chance to see where the money's going, where it's coming from. What are you seeing that might be surprising or maybe that goes against the market narrative.>> Sure. Well, I mean, look, headline, we're having an incredible year in terms of asset gathering ...

The Nasdaq-100 Index (NDX) is lower by 3.36% over the past month, and plenty of growth stocks across all market capitalization segments performing significantly worse than that. Some retail investors are worried the once easy money tech trade is evaporating. Rushing to that conclusion could be to investors' detriment because market history confirms pullbacks are healthy and to be sure, ETFs such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM), which track NDX, have pulled back but they' ...

Core Insights - The State Street SPDR S&P Capital Markets ETF (KCE) debuted on November 8, 2005, and offers broad exposure to the Financials ETFs category [1] - KCE is managed by State Street Investment Management and aims to match the performance of the S&P Capital Markets Select Industry Index, with assets exceeding $541.31 million [5] - The ETF has a low expense ratio of 0.35% and a 12-month trailing dividend yield of 1.56% [6] Fund Characteristics - KCE focuses entirely on the Financials sector, with approximately 100% of its portfolio allocated to this area [7] - The top holdings include Galaxy Digital Inc A (2.7% of total assets), Robinhood Markets Inc A, and Coinbase Global Inc Class A, with the top 10 holdings representing about 19.33% of total assets [8] Performance Metrics - Year-to-date, KCE has increased by approximately 6.01%, but it has decreased by about 1.04% over the past year, trading between $108.52 and $157.83 in the last 52 weeks [9] - The ETF has a beta of 1.28 and a standard deviation of 21.18% over the trailing three-year period, indicating a higher risk profile [10] Alternatives and Comparisons - KCE may not be suitable for investors looking to outperform the Financials ETFs segment, with alternatives like the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) available, which has $1.51 billion in assets and an expense ratio of 0.38% [11] - Traditional market cap weighted ETFs are suggested for investors seeking lower-cost and lower-risk options [12]

Core Insights - Goldman Sachs is acquiring Innovator Capital Management for $2 billion, which will significantly enhance its position in the defined-outcome ETF market [2] - The acquisition will increase Goldman's assets in this category to $28 billion, making it the second-largest asset manager in defined-outcome ETFs, just behind First Trust [2] - The defined-outcome ETF market is currently valued at approximately $69 billion and is projected to grow to $334 billion by 2030, indicating strong future potential [3] Company Developments - The acquisition is expected to close in the second quarter of 2026, and Innovator's over 60 employees will join Goldman Sachs [4] - Goldman Sachs has seen strong growth in its ETF efforts, particularly with options-based strategies, which contributed to the decision to acquire Innovator [3] - The company is still deciding whether to retain the Innovator brand or integrate it into its own branding before the deal closes [4] Industry Trends - Defined-outcome ETFs are gaining traction among risk-averse investors, particularly retirees and near-retirees, as they provide market exposure with some protection against losses [4] - There are currently over 500 defined-outcome ETFs from 28 issuers, with Innovator and First Trust accounting for about 75% of the market by assets [5] - Approximately 10% of financial advisors report using defined-outcome ETFs, indicating a growing interest in these products [5]

Core Insights - AI ETFs have significantly outperformed the S&P 500 over the past five years, providing investors with diversified exposure to various sectors including semiconductor, energy, and robotics [1] Group 1: VanEck Semiconductor ETF (SMH) - The VanEck Semiconductor ETF (SMH) includes leading semiconductor companies such as Nvidia, Taiwan Semiconductor, and Broadcom, which are addressing the increasing demand for AI chips [3] - SMH has an annualized return of 30.3% over the past decade, with its top 10 holdings accounting for over 75% of total assets [5] - The fund has a 0.35% expense ratio and a current price of $352.85, with a day's change of +0.16% [4] Group 2: CoinShares Bitcoin Mining ETF (WGMI) - The CoinShares Bitcoin Mining ETF (WGMI) focuses on crypto mining stocks that have transitioned to AI infrastructure, with its top 10 holdings making up over 80% of total assets [6] - The fund has less than $300 million in net assets and a higher expense ratio of 0.75%, but has more than doubled in value this year [8] - Key holdings include IREN and Cipher Mining, which together constitute 40% of the fund's total assets [8] Group 3: Roundhill Generative AI & Technology ETF (CHAT) - The Roundhill Generative AI & Technology ETF (CHAT) is actively managed and specializes in generative AI, achieving over 50% gains in the past year [9] - Its top 10 holdings represent 43% of total assets, with major tech companies like Alphabet and Nvidia among the top positions [10] - The fund has a 0.75% expense ratio and a current price of $60.34, with a day's change of +0.33% [10] Group 4: iShares AI Innovation and Tech Active ETF (BAI) - The iShares AI Innovation and Tech Active ETF (BAI) has delivered a 31% return over the past year, with more than half of its capital allocated to the top 10 holdings [12] - Major positions include Broadcom, Nvidia, and Microsoft, with over 80% of the fund's assets in large-cap stocks [13] - The fund has a 0.55% expense ratio, making it a stable option for investors looking to capitalize on AI without high volatility [13] Group 5: ROBO Global Artificial Intelligence ETF (THNQ) - The ROBO Global Artificial Intelligence ETF (THNQ) focuses on new market opportunities arising from AI development, gaining approximately 30% over the past year [15] - The fund is more diversified, with only 28% of its capital in the top 10 positions and one-third of its assets in mid-cap stocks [16] - THNQ has a 0.68% expense ratio and includes unique holdings alongside major tech names [15]

Core Insights - Wall Street's outlook for 2026 is increasingly optimistic, with major firms like JPMorgan, HSBC, and Deutsche Bank believing that productivity gains driven by AI and automation will propel the market higher [1][2] - The anticipated earnings growth necessary to support elevated S&P 500 targets hinges on significant efficiency improvements across various industries [1][2] Future-Of-Work ETFs - Future-of-work ETFs are designed to track the real-world adoption of AI, automation, and digital infrastructure, which are expected to contribute to earnings upgrades by 2026 [3][9] - iShares Exponential Technologies ETF (XT) captures a wide range of technologies enhancing corporate efficiency, allowing investors to benefit from the productivity wave without focusing solely on AI or robotics [3] - ROBO Global Robotics and Automation Index ETF (ROBO) focuses on industrial robotics and automation, emphasizing the essential but less glamorous technologies that support productivity [4] - State Street SPDR S&P Kensho New Economies Composite ETF (KOMP) provides exposure to companies leading digital transformation, making it a strong proxy for anticipated productivity gains [5] - State Street SPDR S&P Kensho Intelligent Structures ETF (SIMS) targets companies involved in smart infrastructure and advanced systems, directly linking to the implementation of efficiency gains [6][7] Market Dynamics - The bullish forecasts for 2026 are contingent on the actual economic impact of AI, automation, and robotics, rather than mere belief in these technologies [8] - Future-of-work ETFs offer investors a means to engage with the economic realities of AI, distinguishing between hype and tangible productivity transformation [9]

Core Viewpoint - Investing for dividend income can provide a steady cash flow without the need to sell shares, making it a lucrative strategy for long-term investors [1] Group 1: ETF Overview - The Schwab U.S. Dividend Equity ETF (SCHD) offers a way to invest in dividend-paying stocks without the need to sift through individual companies [2] - The ETF is designed to provide steady cash flow, with a current price of approximately $27.59 and a daily change of 0.51% [6][10] Group 2: Sector Allocation - Unlike tech-heavy funds, SCHD has a lower exposure to technology stocks, comprising only 8.3% of its holdings, which may provide better stability during market corrections [4] - The ETF has higher weightings in sectors such as energy, consumer staples, healthcare, and industrials, focusing on companies with strong dividend growth [7] Group 3: Top Holdings - The top 10 holdings of SCHD include well-established companies like Merck & Co, Amgen, and Coca-Cola, all of which have increased their dividends for at least eight consecutive years [8][9] - These companies demonstrate competitive advantages and the ability to consistently pay larger dividends to shareholders [9] Group 4: Financial Metrics - The ETF currently offers a distribution yield of 3.87%, which is above average compared to many individual stocks [11] - Since the end of 2011, the ETF's distribution has increased by 541%, indicating strong growth potential for future cash flows [11][13] Group 5: Investment Potential - A $500 investment in SCHD can yield approximately $18.60 in annual cash flow, with the potential for this amount to grow over time through reinvestment and additional contributions [10][13] - Holding and reinvesting dividends can lead to significant compounding effects over a long investment horizon [13]

Core Viewpoint - Growth ETFs provide a diversified investment option for long-term capital appreciation by focusing on companies with above-average earnings and revenue growth potential [1][2]. Group 1: Vanguard Growth ETF - The Vanguard Growth ETF (VUG) tracks the CRSP US Large Cap Growth Index, focusing on large U.S. companies in technology and consumer cyclical sectors [4]. - It has an expense ratio of 0.04% and has generated average annual returns of approximately 17.4% over the past decade [5][4]. - A $5,000 investment could potentially grow to over $24,000 in ten years if past performance continues [5]. Group 2: Invesco QQQ Trust - The Invesco QQQ Trust (QQQ) tracks the Nasdaq-100 index, heavily weighted towards technology, with an expense ratio of 0.20% [9]. - It has outperformed the S&P 500 with total returns of around 456% over the last decade, translating to an annualized return of 19.6% [12]. - A $5,000 investment in QQQ could be worth more than $29,000 in ten years if the performance trend continues [12]. Group 3: Schwab U.S. Large-Cap Growth ETF - The Schwab U.S. Large-Cap Growth ETF (SCHG) tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index and has a low expense ratio of 0.04% [13]. - It boasts a 10-year annualized return of 18.18%, with a $5,000 investment potentially growing to over $26,000 in a decade [16]. - The ETF holds 197 stocks, with significant exposure to megacap companies like Nvidia, Microsoft, and Apple [15][13].

Core Insights - The S&P 500's recent bull run has been significantly driven by the "Magnificent 7" AI tech stocks, which include Apple, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla [2][3] - The Magnificent 7 stocks account for over half of the S&P 500's year-to-date gains, with the index returning approximately 16% overall; excluding these stocks, the return drops to 7% [3] - Concerns about a potential AI bubble have led investors to seek alternatives, such as the Defiance Large Cap ex-Mag 7 ETF (NASDAQ: XMAG), which tracks the S&P 493, excluding the Magnificent 7 stocks [3][5] Investment Alternatives - The Defiance Large Cap ex-Mag 7 ETF (XMAG) has achieved a year-to-date return of 13.54%, outperforming the S&P 500's 7% return without the Magnificent 7 by about 650 basis points [5] - XMAG focuses on 493 large-cap stocks, with significant holdings in companies like Broadcom and Eli Lilly, rather than the Magnificent 7 [5] - The BITA US 500 ex-Magnificent 7 Index, created by BITA GmbH, offers a diversified alternative to the S&P 500 by excluding the largest AI-cap stocks, rebalancing quarterly to mitigate volatility and risk exposure [6]