In this week’s ETF & Market video…

• High vs. Low beta performance at historical extreme
• Flows have been “all-in” on Tech since March low
• Low bar for Low Vol

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.

A Quality Factor ETF is an investment fund that tracks an index of companies selected based on strong fundamental metrics rather than just size or sector. These ETFs focus on financially healthy businesses with proven track records to minimize risk and volatility.

A momentum factor ETF is an investment fund that tracks a basket of stocks exhibiting strong recent price performance, based on the principle that "winners tend to keep winning" in the near term. These ETFs use rules-based strategies to systematically buy assets moving upward and sell those losing value.

A Low Volatility Factor ETF is an investment fund designed to track a basket of stocks that exhibit smaller day-to-day price fluctuations and lower overall risk than the broader market.

Beta - The beta factor describes the extent to which the price of a stock follows the development of an index – i.e., whether it performs better or worse than the market. A stock with a beta factor larger than 1 is more volatile than the market; a beta factor smaller than 1 indicates that the stock is less volatile than the market.

Decile - A decile is a statistical measure that divides a dataset into 10 equal parts. To find the deciles, the data is first ranked from lowest to highest.

The Russell 1000 Index is a stock market benchmark that tracks the 1,000 largest publicly traded companies in the U.S. It represents roughly 93% of the total market capitalization of the entire U.S. stock market and is widely used by investors as a bellwether for large-cap investing.

Rolling returns offer insight into an investment's average annual performance over specific time periods, smoothing out short-term volatility.

Tech Sector - Tracks the performance of a specific index of technology-related stocks. These funds trade on major stock exchanges like regular shares, allowing investors to gain targeted exposure to companies involved in software, hardware, semiconductors, cloud computing, and IT services.

Semiconductor stocks (or "chip stocks") are shares in publicly traded companies that design, manufacture, or supply materials for computer chips.

Energy Sector - The energy sector is the segment of the economy comprised of companies involved in the exploration, production, refining, and distribution of fuel and electricity, covering both fossil fuels (oil, natural gas, coal) and renewable sources (wind, solar, hydro). It provides the essential infrastructure to power modern society and industries.

Consumer Staples Sector - An investment fund that tracks a basket of stocks within the consumer staples sector. Also known as consumer non-cyclicals, these companies produce essential, everyday goods—such as food, beverages, household products, and personal care items—that people continue to buy regardless of economic conditions.

Healthcare Sector - A healthcare sector ETF is an exchange-traded fund that tracks a basket of stocks focused entirely on the medical and health-related industries.            

Financials Sector - A Financials Sector ETF is an exchange-traded fund that tracks a basket of stocks belonging to the financial services industry. These funds allow investors to gain diversified exposure to companies that manage money, credit, and risk—such as banks, insurance companies, asset managers, and payment processors

Materials Sector - A Materials Sector ETF is an exchange-traded fund that pools money to invest in companies involved in the discovery, development, and processing of raw materials. This includes industries like chemicals, metals and mining, forestry, and construction materials.

Industrials Sector - An Industrials Sector ETF is an exchange-traded fund that tracks a basket of stocks within the industrial sector. This includes companies that manufacture machinery, provide commercial and logistics services, and operate in aerospace, defense, and transportation.

Diversification is the strategy of spreading investments across various financial assets, industries, or geographic locations to reduce overall portfolio risk and minimize the impact of any single investment's failure.

GICS - The Global Industry Classification Standard (GICS®) is a four-tiered, hierarchical industry framework developed by MSCI and S&P Dow Jones Indices in 1999 to categorize publicly traded companies globally. It is used by investors and analysts to classify firms into 11 sectors, 25 industry groups, 74 industries, and 163 sub-industries based on principal business activity, such as revenue.

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. 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 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.