In this week’s ETF & Markets video…

• Updating a our favorite chart
• Sector flows are “all-in” on Tech
• Measuring High vs. Low Beta performance
• Levered ETF activity usage on the rise

Thank you for your support of Strategas.

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).

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.

Average - a single value that represents the middle, typical, or expected outcome of a set of numbers or quantities.

Rolling performance is a method of evaluating an investment's average annualized performance by continuously shifting the start and end dates over a designated timeframe, rather than looking at a single fixed period.

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 leveraged ETF is an advanced investment fund that uses financial derivatives (like swaps and futures) to multiply the daily return of an underlying benchmark. While a standard fund tracks its index 1:1, a leveraged ETF typically aims for a 2:1 or 3:1 ratio.

Trading volume measures the total number of shares, contracts, or units of an asset exchanged between buyers and sellers during a specific timeframe. It indicates the overall market interest and liquidity of an asset.

The Russell 1000 Index is a stock market index that tracks the performance of the largest 1,000 publicly traded U.S. companies, representing about 90% of the total U.S. equity market capitalization.

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.

A semiconductors industry ETF is designed to track the financial performance of companies involved in the semiconductor (chip) ecosystem.

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.

Utilities Sector – A Utilities sector ETF is an exchange-traded fund that tracks a basket of stocks within the utilities industry, providing instant diversification.

Consumer Discretionary Sector – A Consumer Discretionary Sector ETF is an exchange-traded fund that tracks a basket of stocks belonging to companies that sell non-essential, "luxury" goods and services.

Real Estate Sector – A Real Estate Sector ETF is an exchange-traded fund that tracks a basket of real estate stocks. It allows you to gain diversified exposure to the real estate market through a single tradable asset, completely avoiding the need to directly own or manage physical properties.

Communications Sector - A communications sector ETF is an exchange-traded fund that tracks the performance of stocks involved in telecommunications, media, entertainment, and digital platforms.

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.