In this week’s ETF & Markets video, we look at…

• Surging thematic ETF flows
• Record levered ETF usage
• The case for the Low Vol factor

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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 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.

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.

Trading Volume - Measures the total number of shares, contracts, or units of an asset traded during a specific period (e.g., a day, hour, or minute). It is a vital indicator used by traders to gauge market activity, liquidity, and the strength of a price movement.

Levered / Inverse ETF - Leveraged and inverse ETFs are specialized, high-risk financial instruments designed to track the daily performance of an underlying index or asset, but with amplified or opposite results. Because they are designed to reset their exposure daily, they are primarily used by sophisticated traders for short-term tactical plays rather than long-term investing. 

Thematic ETF - A specialized investment fund that focuses on a specific, forward-looking trend, industry, or concept rather than a broad market index. It groups together a basket of stocks representing companies aligned with that theme, like artificial intelligence, renewable energy, cybersecurity, or genomics.

Thematic Tech ETF - Tracks a specific, long-term technological trend or "megatrend" (such as AI, cybersecurity, or cloud computing) rather than a broad market index or traditional industry sector.  

Quality Factor - Investment strategy and factor premium that targets companies with durable business models, strong balance sheets, and consistent, high profitability.

Momentum Factor - Refers to the empirically observed tendency for assets that have performed well in the past to continue outperforming in the near future, and for poor-performing assets to continue lagging.

Low Vol Factor – Targets stocks with steadier prices and smaller historical fluctuations. Aims to deliver market-like returns over the long term but with fewer sudden dips or "drawdowns" during bear markets. 

SPLV - The Invesco S&P 500® Low Volatility ETF (Fund) is based on the S&P 500® Low Volatility Index (Index). 

QUAL - The iShares MSCI USA Quality Factor ETF seeks to track an index composed of U.S. stocks with high return on equity, stable earnings, and low debt.

SpaceX - Short for Space Exploration Technologies Corp.) is an American public-traded aerospace manufacturer, launch provider, and satellite communications company.

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