ETFs & Markets with Todd Sohn: Concentration Risk for Growth ETFs

06/21/2024

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Strategas Asset Management ETF Strategist Todd Sohn begs the question of how much growth to own and unravels vital stats about the Tech sector and a few important Fixed Income ETFs that caught his attention.

Definitions:

Growth ETFs focus on investing in fast-expanding, and often more volatile, companies in hopes of realizing above-average returns.

Fixed Income Exchange-Traded Funds (ETFs) are investment products that give you exposure to the performance of a diversified basket of bonds.

Fixed income mutual funds are those mutual fund schemes whose underlying assets are fixed-income securities, such as - government securities, debentures, corporate bonds, and other money market instruments. These funds are also broadly known as debt funds.

“Weighted” is a description of adjustments to a figure to reflect different proportions or "weights" of components that make up that figure.

Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Essentially, it is the relationship between the prices of different assets.

“Core ETFs” typically refer to a group of exchange-traded funds that help form the foundation of a portfolio. These ETFs are designed to provide exposures to a market, asset class, or sector in which the investor holds a high conviction.

A mutual fund is a type of investment that pools money from many people to invest in a variety of assets like stocks, bonds, or other securities.

An exchange-traded fund (ETF) is a pooled investment security that can be bought and sold like an individual stock.

Performance dispersion is the distribution of medium-term price trends in any chosen investment universe.

The Technology Select Sector SPDR® Fund (XLK) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Technology Select Sector Index (the “Index”) The Index seeks to provide an effective representation of the technology sector of the S&P 500 Index.

This communication was prepared by Strategas Asset Management, LLC ("we" or "us" or “our”). This communication represents our views as of 06/18/2024, which are subject to change, and are presented for illustrative purposes only. The information contained herein has been obtained from sources we believe to be reliable, but no guarantee of accuracy can be made. 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. 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 is an SEC Registered Investment Adviser affiliated with Strategas Securities, LLC, a broker-dealer and FINRA member firm, and an SEC Registered Investment Adviser. Both 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.