Bonds: Total Market
The T. Rowe Price International Equity ETF (TOUS) is an active ETF that has gained attention for its diversification benefits, especially after a recent market sell-off. With a competitive 50 basis point fee, TOUS focuses on high-quality international firms with strong business models and good valuations.
TOUS has an active strategy built around macro factors through an international lens that uniquely positions it for the type of interest rate volatility the US is experiencing.
The fund’s active management allows for flexibility in selecting companies, particularly in non-U.S. markets, which could be advantageous during volatile periods. TOUS has returned 9.8% over the past year, making it an appealing option for diversification away from U.S. mega-caps.
Finsum: We’ve been banging the drum on the need to diversify into active funds during this volatility and this recent flash was an example why.
For those who find the pain of losing money more intense than the pleasure of making a profit, there are defined-outcome or buffered ETFs. These funds, which cap potential gains in exchange for limited losses, have gained popularity since their debut in 2018. Now numbering around 270 with $47 billion in assets, these ETFs surged in interest after poor market returns in 2022.
Buffered ETFs cater to conservative investors, including those nearing retirement, who want to stay invested in the stock market while minimizing risk. Typically offering protection for a set period, usually a year, they limit potential upside in return for a cushion against losses. Major financial firms like Innovator, First Trust, AllianzIM, and Fidelity offer these funds.
Though complex, requiring thorough explanation, these ETFs are mainly used by financial advisors for their clients, presenting a balanced investment strategy by offering various levels of risk and reward to suit different needs.
Finsum: When the probability of volatility is high a buffer ETF can be a great natural hedging solution.
The 2024 Paris Olympics have already produced memorable moments. Team USA's women's gymnastics team, led by Simone Biles, won gold. South Korea's Ye-ji Kim became an internet sensation for her performance in the women's 10-meter air pistol.
Egyptian fencer Nada Hafez revealed she competed while seven months pregnant. The US men's gymnastics team won its first medal in 16 years, thanks to Stephen Nedoroscik's performance. Canadian swimmer Summer McIntosh earned her first gold medal in the 400-meter individual medley.
Former NBA player Chase Budinger won his first Olympic beach volleyball match. France’s Leon Marchand set a new record in the 400-meter individual medley.
Finsum: The streaming era has ushered in a new wave of fandom for typically unwatched events.
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Since their launch three decades ago, exchange-traded funds (ETFs) have become a favored investment vehicle. ETFs, which trade like stocks but hold baskets of securities, saw significant growth in 2024, with more money flowing into ETFs than individual stocks.
U.S.-based ETF assets hit a record $9 trillion in May, experiencing net inflows while mutual funds saw outflows. Investors are attracted to ETFs due to their low cost, ease of trading, and tax efficiency. The recent approval of cryptocurrency ETFs has further boosted their popularity, while actively managed ETFs are also on the rise.
The iShares Core S&P 500 ETF (IVV) offers broad exposure to large-cap U.S. stocks at a low expense ratio of 0.03%. The iShares Core S&P Mid-Cap ETF (IJH) provides access to mid-cap companies with no overlap with large-cap holdings. The iShares Core S&P Small-Cap ETF (IJR) focuses on profitable small-cap companies, giving it a high-quality tilt that has outpaced the Russell 2000 in recent years.
Finsum: Cost effective ETFs are also great tools to get market segmentation exposure.
Indian government bonds have been added to the JPMorgan GBI Emerging Market Global Series Index for the first time, reflecting a milestone for Indian markets. The move follows the RBI's 2020 decision to remove foreign investment restrictions on specific rupee debt.
Starting June 28, 27 Indian G-secs are now open to non-resident investors under the Fully Accessible Route, boosting their market presence. These bonds, with the longest duration in the index and a yield of 7%, present a significant opportunity for global investors.
This inclusion is expected to raise foreign ownership of Indian government debt from 2% to 4.4% and may lead to further additions in other global indices.
Finsum: Investors might start flocking to EM as rates fall in the west.
Investing in bonds has gained popularity, facilitated by platforms like Webull and Public. Bonds come in three main types: U.S. Treasury bonds, corporate bonds, and municipal bonds, each with distinct tax implications.
U.S. Treasury bonds are state and local tax-exempt, corporate bonds are fully taxable, and municipal bonds often enjoy federal and state/local tax exemptions. Credit quality is vital, with investment-grade bonds rated BBB- or higher by S&P and Baa3 or higher by Moody’s.
Comparing after-tax and taxable-equivalent yields helps investors decide the best options based on their tax brackets. Additionally, understanding the yield to maturity and coupon rates of bonds, such as those from can aid in making informed investment decisions
Finsum: Alternatively, ETFs and other products can make a wider exposure to bonds a little easier.