What You May Have Missed This Week...
VOO vs. SPY, reviewing a pair of disappointing dividend ETFs and looking back at my 2023 predictions
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!
Two Dividend ETFs That Have Been Major Disappointments
The ETF universe is as competitive as it gets. While some ETFs strike it rich and attract large investor inflows, others peter out, quietly shutting down due to an inability to attract sufficient assets. Rarely, a few even implode in spectacular fashion, like what happened with various inverse VIX ETPs in 2018 or with Russian equity ETFs in 2022. Still, not all unpopular ETFs are consigned to these fates. Many are capable of lingering for years, even decades, thanks to slick marketing or attractive features that lure unsuspecting investors. When it comes to the latter, an attractive ETF name or yield can entice novice investors into forking over their cash, only to be bitterly disappointed later.
SPY vs. VOO: Which S&P 500 ETF Is Better?
When it comes to investing, no benchmark is more familiar, more used or more quoted than the S&P 500. When people ask, "how is the market doing today", they're talking about this index. You might assume that S&P 500 ETFs are interchangeable. For the most part, they are since they have huge asset bases, they're highly liquid and very tradeable. That means if you want to find any kind of advantage with one versus the other, you really have to dig into the details.
Leveraged 2x Bitcoin Futures ETF Launches
Today marks the debut of the VolatilityShares 2x Bitcoin Strategy ETF (BITX), the first U.S. listed ETF that will leverage the daily performance of the bitcoin futures market. There are about a half dozen ETFs out there already that invest in bitcoin futures contracts, led by the ProShares Bitcoin Strategy ETF (BITO) with more than $1 billion in assets. There's also the ProShares Short Bitcoin Strategy ETF (BITI), which aims to deliver the reverse of the daily performance of bitcoin futures, but none so far have offered leveraged exposure to cryptocurrency.
SPHD: This Low Volatility, High Dividend ETF Has Been a Flop, Here's What I Would Buy Instead
One thing many ETF investors fail to do well is carefully read an ETF's prospectus. For instance, take the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD). On the face of it, an investor would reasonably expect this ETF to deliver above-average yields and lower risk, right? Well, only the former is correct. As of June 26, 2023, SPHD sports a 30-day SEC yield of 4.86%, which is significantly higher than the S&P 500 index. However, since inception, it has failed miserably at delivering on its low-volatility promise, with a higher standard deviation and greater maximum drawdown.
Reviewing My 2023 Financial Market Predictions: The Hits & The Misses So Far
2023 has, so far, started the year with one set of expectations and developed another as the year progressed. In January, the markets believed that the inflation was topping out and the Fed was near ending its rate hiking cycle. With a lot of economic data already indicating a slowdown globally, the table was setting for a potential recession later in 2023 that could potentially usher in another drawdown in equities. Instead, the U.S. economy has proven more resilient than expected.
ARKK vs. QQQ vs. SPY: Which is the Best ETF? (ETF Battles)
In this episode of ETF Battles, it’s a triple-header heavy weight contest between the ARK Innovation ETF (ARKK), the Invesco QQQ ETF (QQQ) and the SPDR S&P 500 ETF (SPY). The judges break down the fast moving self-driving, battery and EV market to see which ETFs are best capturing this major investment trend. Which ETF is the top choice for stock market investors? Each ETF is judged against the other in key categories like cost, exposure strategy, performance and a mystery category. Find out who wins the battle!
JEPI vs JEPQ: Which High-Yield ETF Is Better For Retirement Income?
According to the ETF Central screener, the most popular actively managed ETF in terms of assets under management, or AUM as of June 19 is the JPMorgan Equity Premium Income ETF (JEPI). Since its launch in May 2020, JEPI has become wildly favorable among income and dividend investors, having accrued a massive $26.8 billion in assets under management. JEPI's lesser-known cousin is the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), which employs a similar strategy but tracks a much different underlying portfolio of stocks. Here’s how I would pick between the two if I was looking for an equity holding to plan for retirement income.