In this week's ETF & Markets video we look at...

-Concentration coming off the boil

-Beta factor reverting as well

-Record Fixed Income ETF flows

-Risk pairs skew defensive

Definitions:

S&P 500 – A widely used stock market index that tracks 500 large-cap U.S. companies across multiple sectors. The S&P 500 defines its industries by classifying its 500+ constituent large-cap U.S. companies into 11 primary sectors based on the Global Industry Classification Standard (GICS).

SPDR S&P 500 ETF Trust (SPY) –designed to track the performance of the S&P 500 Index.

Equity ETF – An ETF that invests primarily in stocks, providing exposure to a broad market or specific sectors.

Fund Flow - Fund flow refers to the net movement of cash into and out of investment vehicles (like mutual funds or ETFs) or the movement of working capital within a company. It tracks investor sentiment and capital allocation, with net inflows indicating popularity and net outflows signaling divestment, independent of the asset's actual performance.

Beta - measures an asset's volatility and sensitivity compared to the broader market. It indicates how much a stock’s price tends to move in response to overall market changes, making it a key tool for assessing "systematic risk" (the risk inherent to the entire market).

Cumulative - a total that builds up or accumulates step-by-step as you move through data values.

Rolling Sum - The sum of a metric over a defined, fixed-length time window. As a new period's data enters the window, the oldest data point is dropped.

Correlation - Measures how two assets or variables move in relation to one another. Expressed numerically by a coefficient between -1.0 and +1.0, it is the foundation of portfolio diversification.

Standard deviation is a number that shows how far the numbers in a data set are spread out from their average (mean). A low number means the data points are close to the average. A high number means the data points are spread out over a wide range.

% weight exposure is the specific percentage of an ETF or index in a particular holding, sector, or asset class. It dictates how much a specific stock's performance will impact the fund or index overall value.

AUM stands for Assets Under Management. It represents the total market value of all the financial assets a firm, bank, or individual financial advisor manages on behalf of their clients.

Diversification is the practice of spreading money, resources, or operations across a variety of different areas to manage risk and increase stability.

A leveraged ETF is an advanced financial instrument designed to multiply the daily performance of an underlying benchmark by 2x or 3x.

An inverse ETF (also called a "short" or "bear" ETF) is a type of exchange-traded fund designed to rise in value when a target market index or asset falls.

Trading volume is the total number of shares, contracts, or units of a financial asset (such as stocks, bonds, options, or crypto) traded during a specific period

A drawdown is the peak-to-trough decline in the value of an investment, asset class, or entire stock market over a specific time frame.

A cyclical sector ETF is a pooled investment fund that tracks a basket of stocks whose performance is closely tied to the ups and downs of the broader economic cycle

A defensive sector ETF is a basket of securities that tracks companies providing essential goods and services.

A tech ETF is a basket of stocks that tracks companies in the technology sector—such as software, hardware, semiconductors, and IT services

A percentile is a statistical measure that indicates the percentage of values in a dataset that fall at or below a specific value.

A fixed income ETF investsin a basketof debt securities—such as U.S. Treasuries, corporate bonds, municipal bonds, or international debt.

A derivatives-based ETF(exchange-traded fund) is a fund that uses financial instruments like futures contracts, options, swaps, or forward contracts—rather than directly holding physical assets like stocks or bonds—to achieve its investment goals.

A quintile is any of four values (or the five resulting groups) that split a statistical distribution or data set into five equal parts, where each part represents 20% (one-fifth) of the total population or sample.

The semiconductor industry is the aggregate of companies that design, fabricate, test, and package semiconductor materials, devices, and integrated circuits (microchips).

The Russell 1000 Index is a market-capitalization-weighted index that tracks the approximately 1,000 largest U.S. public companies, representing about 93% to 98% of the total investable U.S. equity market.

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 Baird Strategas, LLC, a broker-dealer and FINRA member firm and an SEC Registered Investment Adviser. Information regarding market or economic trends, or the factors influencing historical or future performance, reflects the opinions of management as of the date of this communication, and are subject to change. 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. The information contained herein has been obtained from sources we believe to be reliable, but no guarantee of accuracy can be made. 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 Baird Strategas, 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.