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

-Changing leadership and shifting flows

-The reset for AI-adjacent areas

-Notable small-cap charts

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.

A cyclical sector ETF is a pooled investment fund that tracks a basket of stocks from industries whose revenues and share prices rise and fall closely with the health of the broader economy

A defensive sector ETF hold companies in non-cyclical industries—businesses that sell essential goods and services that people continue to buy regardless of economic conditions.

A tech sector ETF is a basket of stocks that tracks companies in the technology sector, such as software providers, semiconductor makers, hardware manufacturers, and cloud or cybersecurity firm

An energy sector ETF (exchange-traded fund) holds a basket of stocks representing companies involved in the production, exploration, refining, and distribution of oil, gas, coal, and consumable fuels, as well as energy equipment and services.

Industrial ETFs holds basket of stocks from companies in the manufacturing, construction, aerospace, defense, and transportation sectors.

A materials sector ETF tracks a basket of stocks belonging to companies involved in discovering, developing, and processing raw materials.

A consumer discretionary sector ETF tracks an index of companies producing non-essential or luxury goods and services

A consumer staples Sector ETF tracks a basket of stocks from companies producing or selling essential, everyday goods

A healthcare ETF holds a basket of stocks from companies operating within the healthcare sector.

A utilities sector ETF tracks a basket of stocks belonging to companies in the utilities sector, providing diversified exposure to public service providers like electric, gas, water, and renewable power companies.

A real estate sector ETF holds a diversified basket of real estate-related securities.

A communications sector ETF tracks a benchmark index of companies operating within the communication services industry

A financial sector ETF tracks a basket of stocks belonging specifically to the financial industry, trading live on national stock exchanges just like an individual stock

The Russell 2000 Index is a stock market index that measures the performance of approximately 2,000 small-capitalization (small-cap) companies in the United States.

A small-cap ETF is an investment fund that holds a basket of stocks from publicly traded companies with relatively small market capitalizations—generally between $300 million and $2 billion (though some indexes stretch up to $3 billion or higher).

An intra-year drawdown is the largest peak-to-trough market decline that happens within a single calendar year.

Bloom Energy (BE) is an American public company founded in 2001 and headquartered in San Jose, California, that designs and manufactures solid oxide fuel cells (SOFCs) for on-site power generation.

Rebalance means to adjust or restore balance to something so that no part has excessive weight, power, or proportion.

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.