Your weekly update on top ETF trends
 | TUE, SEP 17, 2019 | | | | | | YOUR WEEKLY UPDATE ON TOP ETF TRENDS | | | | Careful on diving into Energy ETFs. It's tempting with oil rocketing up 12% on Monday to buy into oil ETFs, but be careful. Appearing on ETF Edge, both Todd Rosenbluth, head of ETF and Mutual Fund Research at CFRA, and Tom Lydon who runs etftrends.com, expressed caution about buying into this rally, since it isn't clear that the price rise will last or that it will even lead to a longer-term rise in profits. Rosenbluth also noted that due to the dramatic decline in prices for many exploration and production, drilling, and oil service stocks in the last year, the largest energy ETF, the SPDR Energy Select (XLE), is now dominated by two names: 45% of the fund is ExxonMobil and Chevron. That is a dangerous concentration. Passive (indexed) equity mutual funds are now bigger than actively managed mutual funds. Even mutual funds are seeing more interest in passive investing. Assets under management in passive equity mutual funds topped $4.27 trillion in August, surpassing the money in actively managed equity funds, at $4.25 trillion, according to Morningstar. Over the past 10 years, active U.S. equity mutual funds have had $1.3 trillion in outflows and their passive counterparts nearly $1.4 trillion in inflows, Morningstar noted. For more analysis and actionable insights, watch me live on Mondays at 1pm ET on ETF Edge. |
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