Defined outcome exchange-traded funds (ETFs), particularly buffer strategies, have grown in popularity as investors seek ways to manage volatility and reduce downside risk in uncertain markets. These ETFs cap upside potential in exchange for a defined buffer against losses, typically over a 12-month period, allowing investors to stay invested while limiting risk exposure. 

While the trade-off of reduced upside may not appeal to long-term growth investors, recent innovations such as bitcoin-protected ETFs have expanded the reach of these products, offering cautious entry points into riskier assets. 

The market for defined outcome ETFs has expanded rapidly, now exceeding 400 funds with more than $70 billion in assets and $8 billion in net inflows year-to-date. Innovator and First Trust dominate the space, accounting for more than 90% of assets under management, though new entrants like AllianzIM and Calamos are gaining ground with differentiated strategies. 

Finsum: Defined outcome ETFs have evolved from a niche product into a mainstream risk management tool, reflecting rising investor demand and ongoing product innovation.

Infrastructure is emerging as a core allocation for advisors, and BlackRock is seizing the moment with the launch of its first active infrastructure ETF, the iShares Infrastructure Active ETF (BILT). The fund builds on BlackRock’s $10 billion passive infrastructure ETF lineup and the firm’s $183 billion infrastructure footprint, bolstered by its 2023 acquisition of Global Infrastructure Partners. 

Managed by Balfe Morrison, BILT takes an active approach that aims to capture alpha in sectors such as utilities, transportation, energy, and data infrastructure, all of which are seeing heightened demand from AI adoption, digital growth, and shifting supply chains. 

At inception, utilities make up the largest allocation, followed by transportation and oil and gas, with about two-thirds of exposure focused on North America and select opportunities in Europe and Asia. With yields around 3%, infrastructure provides the income and downside protection investors expect, but Morrison stresses that BILT also offers meaningful potential for capital appreciation. 

Finsum: For advisors, the ETF offers diversification, inflation hedging, and exposure to long-term global trends, making infrastructure more relevant than ever in retirement and income-focused portfolios.

After bottoming in April, the stock market has staged an impressive rebound, but Stifel strategist Barry Bannister warns the rally may not last due to stretched valuations. He predicts the S&P 500 could fall as much as 15% to 5,500 but advises investors to stay in the market with a more defensive stance. 

Bannister highlights high-yield dividend stocks as a classic hedge, offering steady income and stability in uncertain conditions. Ellington Financial stands out with an 11.5% yield supported by strong earnings and diversified mortgage-backed investments. 

Meanwhile, Dorian LPG, a global liquefied petroleum gas carrier, offers an 8% yield with analyst support despite recent earnings volatility. 

Finsum: Dividend stocks exemplify how income-focused strategies can help investors weather potential downturns while still capturing meaningful returns.