The fallout from the Silicon Valley Bank debacle continues. The markets have rarely seen such a wide weekly dispersion: tech up 6%, banks down 12%, with cyclical sectors like Industrials, REITs and Materials signaling an economic slowdown. A lot is in the hands of the Federal Reserve when they meet next week, but the ETF industry is not waiting. Join us Monday at 1:10 pm ET on ETF Edge when our guests will be Dave Mazza, Chief Strategy Officer at Roundhill Investments, who will brief us on his new Big Bank ETF launching Tuesday; Greg Bassuk, CEO of AXS Investments, who will discuss the fallout from the SVB failure on the "innovation economy" and the ETFs around that space and Todd Rosenbluth, Head of Research at VettaFi, who will discuss the impact of the SVB failure on the ETF industry.
Following the ETF flows. Just back from moderating a panel with the heads of major stock exchanges in Florida at the FIA's Annual International Futures Industry Conference, and they've all seen volumes exploding in options and futures over the past week due to the market volatility. Same story with ETFs – heavy volume and inflows into gold, technology stocks, short-term Treasuries. On the flip side, we'd seen huge outflows from corporate and junk bond ETFs and bank ETFs – especially the SPDR S&P Regional Banking ETF (KRE) – earlier in the week. But Thursday's news of massive bank bailouts did manage to spark a hefty rebound across the board. Money also poured out of energy ETFs, as crude oil prices suffered their biggest weekly declines since December – though there are signs that some investors might be starting to buy on the dip heading into the weekend.
Speaking of banks, there's a new bank ETF in town… Amid all the buzz around regional banks this month, Roundhill Investments is gearing up for the launch of its brand-new BIG Bank ETF (BIGB) next week. The fund will offer concentrated exposure to the top six banking leaders in the U.S. – aiming to focus on the largest, most liquid banks with strong balance sheets compared to smaller regional institutions. "In the wake of banking failures at Silicon Valley Bank, Signature Bank of New York, and Silvergate, individuals and institutions alike are migrating banking relationships to the institutions deemed too big to fail," says Roundhill's Dave Mazza. "BIGB allows investors to achieve exposure to these money center banks potentially without being exposed to smaller financial services companies such as regional banks, brokerages, and insurance companies." Pretty straightforward approach – holding the big money-center banks: Bank of America, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley and JPMorgan Chase.
More opportunities to bet on China. J.P. Morgan Asset Management just rolled out its new Active China ETF (JCHI) this week – its newest active ETF aimed at offering a "best ideas" portfolio of Chinese equities, relying on a bottom-up stock-picking approach amid some of China's fastest-growing industries. Given China's struggling growth dynamics (some of which the IMF laid out last month), some investors might want to opt for a more nimble way to invest in the Chinese stock market, regardless of all the macro noise. Top holdings include Tencent, China Merchants Bank, Alibaba and Ping An Insurance.
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