In the face of record inflation, the Virtus Real Assets Income ETF (VRAI) has done extraordinarily well, up 19% year-to-date, and significantly beating the S&P 500, which is up 14%. On top of this, the ETF generates compelling income of 3%, well above the 10 Year US Treasuries at 1.5%.

Investing in real assets is a winning strategy in an inflationary environment because tangible assets such as real estate, natural resources and infrastructure have intrinsic value. VRAI is the first ETF focused on real assets. Additionally, because of VRAI’s focus on income-generating real assets, VRAI also generates attractive income.

In terms of ETF construction, VRAI is designed to be one-stop solution for real asset exposure. VRAI consists of 90 US-traded companies, equally divided between real assets, natural resources, and infrastructure. Companies are filtered based upon market capitalization and selected based upon dividend yield. All stocks are equally weighted to ensure portfolio diversification.

Finally, in terms of costs, VRAI is very competitively priced at 55 bps (0.55%). This stands stark contrast to most energy and real estate ETFs and mutual funds, which typically cost over 100 bps (or 1%).

For more information on the investment case, check out this research piece produced by Virtus

n.b. This is sponsored content and not FINSUM editorial

2024 has seen the stock market make 17 closing, all-time highs. Despite this strength, many are noting some reasons to be cautious about equities due to some concerning developments under the surface.

In essence, the strong performance of the indexes and mega-cap technology stocks is masking hidden weakness. This is reflected in the Dow Jones Transportation Average failing to confirm the new highs of the Dow Jones Industrial Average which is a ‘non-conformation’ according to Dow Theory. Dow Theory warns that a new high by the Industrials but not by transportation stocks is prone to failure. Similarly, riskier parts of the market like high-yield bonds and high-beta stocks are also underperforming Treasuries and low volatility stocks, respectively. 

The leader of this bull market has been technology due to excitement around AI and strong earnings growth from leading tech companies. However, there are signs of exhaustion as the relative ratio of the S&P 500 tech sector has failed to confirm the breakout in the S&P 500. According to David Rosenberg, the founder and President of Rosenberg Research, “These were the most important stocks for the market, and no longer look to be in control.” He believes that the longer these measures fail to confirm the new highs in the S&P 500, the larger the risk of a reversal. 

Finsum: 2024 has been a strong year for the stock market with the S&P 500 making new highs. Yet, there are some signs that the rally may be nearing exhaustion. 

Category: Eq: Total Market 

Keywords: #S&P 500; #bull market; #tech; #equities; #risk; 

Single-stock ETFs were introduced in Europe in 2018 and last year in the US. Now, there are nearly 50 single-stock ETFs with the majority of them tracking mega cap tech stocks like Microsoft, Nvidia, Amazon, and Tesla. Collectively, they have $3.3 billion in assets. Providers include Direxion, AXS, GraniteShares, and YieldMax and strategies fall under option income, bull, or bear.

The largest one is the Direxion Daily TSLA Bull 1.5x Shares which has over $1 billion in assets and tracks the underlying stock with leverage by using swaps and other derivatives. The second-largest at $841 million in assets is the YieldMax TSLA Option Income Strategy ETF. This category of single-stock ETFs will sell call options on the underlying stock to generate monthly income. 

The recent success of these ETFs isn’t surprising given the strong performance of tech stocks this year with many hitting all-time highs. According to Rich Lee, the head of ETF trading at Robert W. Baird & Co., more single-stock ETFs will be hitting the market due to strong demand for these products, and he expects more innovation as well.

The current crop of single-stock ETFs are more suited for short-term speculation rather than long-term investing given higher costs. In August, the SEC issued a warning about these products, “Because leveraged single-stock ETFs in particular amplify the effect of price movements of the underlying individual stocks, investors holding these funds will experience even greater volatility and risk than investors who hold the underlying stock itself,” which encapsulates the risks. 

Finsum: Single-stock ETFs are a small but fast-growing category. While they’ve performed well due to the bull market in tech, they remain unsuitable for long-term investors. 

Congress continues to look for ways to fund the $1.85 trillion bill that aims to spend on social and climate policy. While they have already considered objectives that would align the U.S. with the G20’s global minimum tax rate, the current bill will also affect wealthier individuals’ retirement vehicles. Congress will put limits on large accounts for individuals or couples with $10 million dollar retirement balances. The newest Build Back Better bill also eliminates the ‘backdoor’ Roth IRA by minimizing rollovers and conversions. The date for the former rule change isn’t until Dec. 31, 2028 but the backdoor loophole is set to close Dec. 31st of this year in the current bill.

FINSUM: Substantial changes to savings and retirement could be coming in the upcoming legislation, and investors should be aware of how these changes could affect their retirement vehicles.

The European Stockxx 600 was up .5% on Friday driven by earning releases in the banking sector. That trend followed around the globe as Asia-Pacific’s Taiex index boosted 2% and Wallstreet’s S&P was up 2%. It was strong financial earnings in U.S., and semiconductors in the East pushing the Taiex. All of this happens as inflations concerns continue in the U.S. as consumer prices rose 5.4% on the year, but the Euro areas are seeing the opposite results as monthly inflation was negative in France. The common price thread is definitely in energy prices as Brent crude hit $84.40 a barrel.

FINSUM: The trickling earning reports have generally exceeded expectations. That trend looks to continue, and global portfolios are not only diverse but are outperforming.

The U.S. had two consecutive quarters of negative growth meeting the technical requirements of a recession, and for the first time in over 40 years that coincided with very high inflation. Tasked with generating high returns in a stagflation environment investors are turning to an odd place, emerging markets. While some EM has suffered as a result of a stronger dollar and Fed tightening, pockets are promising to bring big returns in higher growth environments abroad. Countries relying on exports will have a difficult time, but countries like India, Malaysia, and Indonesia all have fairly robust domestic consumer demand and are quick-growing economies. The last country is an oddball but China has continued to deliver stimulus throughout the pandemic and may put itself in a good position to capture investor attention.

Finsum: Equities abroad are ultra-low, finding the right countries with domestic consumer support could be very profitable.

Active ETFs have officially outnumbered their passive counterparts in the U.S. for the first time, with 2,069 listed funds as of mid-June. While passive ETFs still hold the lion’s share of assets under management, investor interest is clearly shifting—active strategies have attracted nearly 40% of total ETF inflows this year. 

Many investors are turning to active ETFs for more agile, hands-on approaches in navigating today’s unpredictable markets, particularly in fixed income and equity sectors. The SEC is also weighing changes that would allow mutual funds to launch ETF share classes, a move that could dramatically expand access to active strategies and boost tax efficiency. 

However, this flexibility may come at a cost for asset managers, as ETFs typically can't turn away new investors like closed mutual funds can, potentially limiting a manager's control over fund size and strategy execution. 

Finsum: With U.S. ETF assets reaching $11 trillion in May, these structural shifts could fuel continued growth and reshape the way investors access actively managed portfolios.

As ETFs continue to evolve, new “enhanced” or actively structured ETFs are emerging as thoughtful alternatives to traditional passive strategies, especially in today’s volatile market. 

Fidelity leaders emphasized how these hybrid ETFs aim to maintain core market exposure while improving on passive models through modest, research-driven security selection. Amid rising concerns like U.S. tariffs and potential recession risks, investors were advised to stay cautious but open to market rebounds following short-term shocks.

Fidelity’s Craig Ebeling noted that passive index tracking can lead to unintended exposures, while enhanced ETFs allow for greater alignment with investor goals by avoiding certain stocks. The Fidelity Enhanced Large Cap Core ETF (FELC), for instance, leverages a quantitative system to actively select large-cap equities and has returned 9.78% since inception. 

Finsum: Investors remain optimistic about long-term opportunities, particularly with enhanced ETFs designed to improve benchmark outcomes.

Clients often face unexpected personal setbacks, and advisors should be prepared to offer support without overstepping. Asking thoughtful, respectful questions during reviews can help uncover early warning signs, such as increased withdrawals or halted contributions. 

If something feels off, gently probing with intuitive questions may reveal issues like family medical concerns or caregiving challenges. When a problem surfaces, framing it with empathy and context, like noting how common it is, can make clients feel less isolated and more receptive. 

However, it’s crucial to gauge whether the client welcomes involvement or views it as intrusive; their response should guide your next steps. 

Finsum: Being present during hard times, not just the good ones, is what builds lasting trust and loyalty.

Gold prices surged to an all-time high as investors sought safe-haven assets amid escalating U.S. tariff concerns. Spot gold climbed 1.3% to $2,794.42 per ounce, briefly touching $2,798.24, while U.S. gold futures settled 1.8% higher at $2,845.20. 

Market uncertainty grew following White House plans to impose steep tariffs on Mexico and Canada, with potential levies on China also under consideration. A weaker U.S. dollar and declining Treasury yields further bolstered gold’s appeal to investors. 

Meanwhile, the Federal Reserve maintained interest rates, signaling no urgency for further cuts despite slowing economic growth. Traders now await the upcoming inflation report for insights into future monetary policy.

Finsum: We will see some wild moves in commodities prices in the coming weeks given the retaliation already spiking in the trade wars. 

Blackstone has officially closed its fourth energy-transition-focused private equity fund, BETP IV, at its hard cap of $5.6 billion—marking a 33% increase over its previous fund. The firm’s Energy Transition Partners platform targets scalable investments that promote cleaner, more reliable, and affordable energy solutions across global markets. 

BETP has received multiple industry honors, including being named Private Equity International’s Energy Private Equity Firm of the Year for three consecutive years and winning IJ Investor’s 2024 Market Innovation of the Year for North America. David Foley, who leads the platform globally, highlighted strong investor confidence and the growing demand for electricity and grid efficiency as key drivers behind the fund’s momentum. 

Notable portfolio companies include Energy Exemplar, Sediver, Lancium, and Trystar—each playing a role in boosting grid resilience, energy modeling, and infrastructure. Blackstone has over $23.5 billion deployed globally.

Finsum: Private equities investment in energy solutions is something to keep an eye on in the new administration.