This week, we dissect the growth of actively managed ETFs, the surge in product proliferation, and the potential directions of broader equity & sector flows as we kickstart the 4th quarter. 

This communication was prepared by Strategas (“we,” “us,” or “our”), a brand that offers investment advisory services through Strategas Asset Management, LLC, an SEC Registered Investment Adviser, and provides research to institutional investors through Strategas Securities, LLC, a broker-dealer and FINRA member firm and an SEC Registered Investment Adviser.  This communication represents our views as of 10/08/2024, which are subject to change, and presented for illustrative purposes only. The information contained herein has been obtained from sources we believe to be reliable, but no guarantee of accuracy can be made. This communication is provided for informational purposes only and should not be construed as an offer, recommendation, nor solicitation to buy or sell any specific security, strategy, or investment product.  This communication does not constitute, nor should it be regarded as, investment research or a research report or securities recommendation and it does not provide information reasonably sufficient upon which to base an investment decision. This is not a complete analysis of every material fact regarding any company, industry, or security. Additional analysis would be required to make an investment decision. This communication is not based on the investment objectives, strategies, goals, financial circumstances, needs or risk tolerance of any particular client and is not presented as suitable to any other particular client. Past performance does not guarantee future results. All investments carry some level of risk, including loss of principal.

Strategas Asset Management, LLC and Strategas Securities, LLC are affiliated with Robert W. Baird & Co. Incorporated ("Baird"), a broker-dealer and FINRA member firm, and an SEC Registered Investment Adviser, although the firms conduct separate and distinct businesses.

The ETFs described herein are referenced solely for illustrative purposes and should not be construed as an investment recommendation. An investment in exchange traded funds involves risk, including the possible loss of principal. For important disclosures and risks relating to each ETF referenced herein, see each respective funds’ prospectus or contact your financial professional

Definitions:

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.

An exchange-traded fund (ETF) is a pooled investment security that can be bought and sold like an individual stock. 

A mutual fund is a type of investment that pools money from many people to invest in a variety of assets like stocks, bonds, or other securities.

Bond Exchange-Traded Funds (ETFs) are investment products that give you exposure to the performance of a diversified basket of bonds.

Equity ETFs invest in a basket of company stocks (also known as equities or shares). They are the most common type of ETFs.

The Invesco S&P 500® Equal Weight Industrials ETF (RSPN) seeks to track the investment results (before fees and expenses) of the S&P 500® Equal Weight Industrials Index (the "underlying index").

Sector ETFs focus on groups of companies that are pursuing the same type of business, like energy, health care, utilities, or technology, for example.

The industrial goods sector is a broad sector of the economy. This sector is made up of companies that provide capital goods used in the manufacturing, construction, and production of goods and services. These goods include machinery, equipment, and supplies.

Fund flows represent the cash that goes into or out of companies, financial assets, sectors, or other market categories.

Equal weight is a type of proportional measuring method that gives the same importance to each stock in a portfolio, index, or index fund.

 An equity market is a form of equity financing in which a company gives up a certain percentage of ownership in exchange for capital.

Cyclical stocks are stocks with prices that are affected by macroeconomic or systematic changes in the overall economy. They rise and fall with the economy.

Defensive stocks provide consistent dividends and stable earnings regardless of the state of the stock market or economy.

A cumulative return on an investment is the aggregate amount that the investment has gained or lost over time, independent of the amount of time involved.

Active ETFs are managed by professional investors in an attempt to outperform a market index such as the S&P 500.