In this week's ETF & Markets video...

• Checking on equity ETF flows as indices hit new highs
• Contrast among cyclical sectors
• One thematic ETF chart you should know about

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).

Standard deviation is a measure of how spread out a set of values is, indicating how much each value typically differs from the mean (average).

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.

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.

Quintile - A quintile is a statistical term that divides a sorted dataset into five equal, sequential groups, with each group representing 20% of the total data.

Lookback - Refers to a sliding window or a specific historical timeframe.

A rolling sum - The continuous sum of a sequence of numbers across a specific, predetermined time frame or data window. As the "window" shifts forward, the newest value is added to the total and the oldest value is dropped.

Sharpe Ratio - The Sharpe ratio is a financial metric used to evaluate an investment's return relative to its risk. Developed by Nobel laureate William F. Sharpe, it tells you how much "excess return" you are receiving for every unit of volatility or risk you endure. Higher ratios generally indicate better, more efficient risk-adjusted performance.

Annualized Return - An annualized return is the geometric average amount of money earned by an investment each year over a given time period, adjusted to a standard 12-month timeframe. It measures compound growth and allows investors to easily compare the performance of investments held for different durations.

A cyclical sector ETF is an exchange-traded fund that tracks companies whose revenue is highly sensitive to broader economic conditions. These funds outperform during periods of economic expansion and generally contain industries like consumer discretionary, financials, industrials, and technology.

A Defensive sector ETF is an investment funds designed to protect portfolios from market volatility and economic downturns. They achieve this by holding assets that are historically stable, such as shares in companies that produce everyday essentials, low-volatility stocks, or high-quality bonds, helping you preserve capital during market turbulence.

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.

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.

Thematic ETFs are investment vehicles that focus on specific rather than tracking broad market indices like the S&P 500. They allow you to invest in a "basket" of companies tied to transformative movements, allowing for targeted exposure.

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.