What You May Have Missed This Week...
Common investing mistakes to avoid, a handful of new JEPI imitators and is the biggest opportunity today in Treasury bonds?
In addition to the regular posts here on Substack, I also publish ETF research and notes over on my blog, ETF Focus.
In case you wanted to catch up on the latest research above and beyond what you’re reading here, this is a quick list of some of the most recent articles from the blog!
Common Mistakes To Avoid With Dividend ETFs
Investing in dividend ETFs comes with the same potential problems as investing in anything else. Even a couple of simple missteps can impact performance significantly. While there's no way to know what an investment will do in the future and even the best laid plans can result in underperformance, there are things you can (and mistakes you can avoid) in order to tip the scales in your favor. Some of the things I'll list below are pretty simple, straightforward and easy to avoid whether you're a seasoned professional or even a first timer!
BALI & PAPI: Two JEPI Clones from BlackRock iShares and Parametric to Watch
Imitation is the sincerest form of flattery, or so the saying goes. Buoyed (or alarmed) by the success of the JPMorgan Equity Premium Income ETF (JEPI), which has since swelled to over $29 billion in AUM, BlackRock and Morgan Stanley have launched their own similar covered call equity ETFs.
The former now offers the BlackRock Advantage Large Cap Income ETF (BALI), while the latter has the Parametric Equity Premium Income ETF (PAPI) listed.
Using High-Yield Credit ETFs To Brace Your Portfolio For A Recession
What’s happening? Well first, the S&P 500 Index does not tell the whole story. It’s high weighting in mega-cap companies such as the magnificent seven (Apple, Amazon, Meta, Alphabet, Nvidia, Tesla and Microsoft) have buoyed its returns. If you look in other pockets of the stock market, such as in the small cap space, you can see more carnage.
But even there, the damage isn’t too bad. In my humble opinion, a recession is bound to happen. The impact hasn’t flowed through to unemployment rates, consumer spending or the stock market YET, but the damage will eventually show up.
"Is It Time To Lock In Rates On Treasury Bills & Bonds?"
"Is it time to "lock in rates"? You can get roughly 5% in treasuries, maybe 6% in investment grade corporate? Is that good enough? How long would you lock it in for?"
Treasuries Are Looking Better Than Stocks Right Now. Is This The Start Of The Big Bond Rally?
With large-cap equities and long-term Treasuries both gaining, which one is telling the right story? Is this a risk-on stock rally or a risk-off bond rally?
It leads me to believe that risk assets have a strong bullish tone behind them, but it might not be as strong as the market wants to believe.
SPYI: Is This High Income ETF A Viable JEPI Competitor?
The bear market of 2022 really sent investors hunting for alternative sources of income when bonds went in the toilet. For once, covered call funds, once relegated to yield-chasers and retirees got some good mainstream attention.
One ETF, the JPMorgan Equity Premium Income ETF (JEPI) swelled to some $29 billon in AUM, with investors pouring inflows into it after noticing its massive monthly distributions and lower volatility.
Today, we have yet again a newer competitor: the NEOS S&P 500 High Income ETF (SPYI). Let's see what makes this unique ETF tick and how it stacks up against JEPI.
Market Cap Weighting vs. Equal Weighting: It Might Be Time To Shift Your Strategy
The AI rally resulted in the “magnificent 7” stocks producing almost all of the market’s gains. Mega-caps and the Nasdaq outperformed the broader market pretty much from day 1 this year and they haven’t relented since.
That trend isn’t going to last forever though. In fact, it’s easy to make the argument that large-caps have outperformed far longer than they should have. As it stands today, smaller company stocks are at their lowest level relative to the S&P 500 since the COVID bear market bottom.
The Two Best Global Equity ETF Alternatives to Vanguard's VT
Such breadth and depth, combined with cost efficiency, makes VT a compelling option for those seeking a one-stop-shop for global equity exposure.
However, while VT is a titan in its space, it's not the sole player, nor is it necessarily the best fit for everyone. Different strokes for different folks, as they say.
Here are two alternatives to VT that deserve a spot on your investment radar.
Buy This, Not That: Better ETF Alternatives to BIL, BND, and VBR
Yet, despite this expansive selection, many investors gravitate towards a small group of notable ETFs with significant assets under management.
This tendency can be attributed in large part to inertia and brand name recognition. Familiarity often breeds comfort, and for many, opting for a well-known fund seems like the safer bet.
However, just like shopping for any other product, browsing the market can unveil more appealing options that offer better value in terms of cost or exposure.
Thanks. Very good analysis.