IAI: Goldman Sachs Powers ETF To New 52-Week-High; How About The Other Holdings?

seekingalpha07-16

ultramarine5 Financial firms almost seem to be humming in the background these days. These companies aren't hitting the headlines lately, and all the excitement about the future is in regards to ...

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These companies aren't hitting the headlines lately, and all the excitement about the future is in regards to ...</p>\n\n<a href=\"https://seekingalpha.com/article/4704255-iai-goldman-powers-etf-to-new-52-week-high-how-about-the-other-holdings\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>IAI: Goldman Sachs Powers ETF To New 52-Week-High; How About The Other Holdings?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIAI: Goldman Sachs Powers ETF To New 52-Week-High; How About The Other Holdings?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-16 18:18 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4704255-iai-goldman-powers-etf-to-new-52-week-high-how-about-the-other-holdings><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ultramarine5 Financial firms almost seem to be humming in the background these days. These companies aren't hitting the headlines lately, and all the excitement about the future is in regards to ...</p>\n\n<a href=\"https://seekingalpha.com/article/4704255-iai-goldman-powers-etf-to-new-52-week-high-how-about-the-other-holdings\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4512","symbol_name":"苹果概念","start_time":0,"source_url":"https://seekingalpha.com/article/4704255-iai-goldman-powers-etf-to-new-52-week-high-how-about-the-other-holdings","article_id":"2451967169","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/640267784/image_640267784.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2451967169","pubTimestamp":1721125080,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"ultramarine5 Financial firms almost seem to be humming in the background these days. These companies aren't hitting the headlines lately, and all the excitement about the future is in regards to chipmakers (it's not Pringles!","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4512":"苹果概念","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","BK4549":"软银资本持仓","BK4582":"ESG ETF-MSCI","BK4548":"巴美列捷福持仓","JEF":"杰富瑞","LU2347655156.SGD":"JPMorgan Investment Funds - Global Income A (icdiv) SGD-H","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","BK4554":"元宇宙及AR概念","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","IAI":"iShares Dow Jones U.S. Broker De","BK4553":"喜马拉雅资本持仓","MKTX":"MarketAxess Holdings","IE0034235303.USD":"PINEBRIDGE US RESEARCH ENHANCED CORE EQUITY \"A\" (USD) ACC","LU0077335932.USD":"FIDELITY AMERICAN GROWTH \"A\" INC","GS":"高盛","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","MSFT":"微软","AAPL":"苹果","IE00B5TLWC47.USD":"BNY MELLON LONG-TERM GLOBAL EQUITY \"B\" (USD) ACC","LU1599440770.SGD":"FIDELITY GLOBAL DIVIDEND \"A\" (SGDHDG) INC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","IPO":"Renaissance IPO ETF","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","IE00BN29S564.USD":"JANUS HENDERSON BALANCED \"A3\" (USD) INC","IE0034235295.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"A\" (USD) ACC","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","BK4543":"AI","LU0912757837.SGD":"JPMorgan Investment Funds - Global Income A (mth) SGD-H","NVDA":"英伟达","LU1791807156.HKD":"BGF WORLD FINANCIALS \"A2\" (HKDHDG) ACC","IE00BHPRN162.USD":"BNY MELLON BLOCKCHAIN INNOVATION \"B\" (USD) ACC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","IE00B19Z9505.USD":"美盛-美国大盘成长股A Acc","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU0079474960.USD":"联博美国增长基金A","LU1989772840.SGD":"CPR Invest - Climate Action A2 Acc SGD-H","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","GB00B4QBRK32.GBP":"FUNDSMITH EQUITY \"R\" (GBP) INC","FDN":"First Trust Dow Jones Internet I","LU1989772923.USD":"CPR Invest - Climate Action A2 Acc USD-H","CME":"芝加哥商品交易所","GB00B4LPDJ14.GBP":"FUNDSMITH EQUITY \"R\" (GBP) ACC","LU2089284900.SGD":"Allianz Global Sustainability Cl AM Dis H2-SGD","LU0061474960.USD":"天利环球焦点基金AU Acc","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","IE00BJLML261.HKD":"HSBC GLOBAL EQUITY INDEX \"HCH\" (HKD) ACC","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC"},"translate_title":"IAI：高盛推动ETF创52周新高；其他持股怎么样？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MKTX":1,"IAI":1,"GS":1,"IPO":1,"CME":1,"FDN":1,"JEF":1,"MSFT":0.6,"NVDA":0.6,"AAPL":0.6},"content_text":"ultramarine5 Financial firms almost seem to be humming in the background these days. These companies aren't hitting the headlines lately, and all the excitement about the future is in regards to chipmakers (it's not Pringles!) supporting AI and the industries most likely to benefit from solutions driven by artificial intelligence. There's a mindset, from some, that the tech sector is single-handedly carrying markets higher these days. Those people might be surprised to see the below chart. Seeking Alpha Financial stocks are, for the most part, outperforming the S&P 500 over the past year. Let's recall for the moment that the 3 largest constituents of the S&P 500 are high-flyers Microsoft (MSFT), Apple (AAPL) and NVIDIA (NVDA). Yet financials are outperforming the broad stock index. (On the topic of NVIDIA, I'll surely never write an article about this company, but let it be said I bought and patiently owned NVDA back in 2011. I'll withhold the selling trade details, unless you want to DM me. Let's just say I own a castle in an alternative universe;) Back to financials, and specifically the iShares U.S. Broker-Dealers & Securities Exchanges ETF (NYSEARCA:IAI). The ETF is up nearly 32% over the past year, and was recently bolstered by Goldman Sachs' (GS) excellent Q2 report released July 15th. Let's investigate the ETF below. Constituents of IAI IAI has everything to do with markets including:  Brokers that handle your investment orders Institutional trades desks IPO Underwriters Stock Exchanges (including Bitcoin exchanges like Coinbase) Ratings Agencies  I've always found these business areas appealing. For starters, there are a lot of deeply-engrained monopolistic qualities. If you're a unicorn trying to arrange your upcoming IPO, you'll want one or more of the largest investment banks involved. If you're an individual stock trader, your orders will ultimately route through one of the main stock exchanges. If you're a company or government entity issuing debt, you'll surely want the services of one of the major rating agencies. The companies held within the IAI ETF are synonymous with markets and financial transactions, and as long as financial transactions continue to occur and continue to grow, these companies will be a part of it. Barron's Investors will likely recognize most of the top-25 holdings of IAI, if not all of them. Two of the companies I'm most interested in on this list are #7 CME Group (CME) and #21 MarketAxess (MKTX). I've written a recent article on MKTX, in fact, called MarketAxess May Be The Future. What I like about both CME Group and MarketAxess is the prospect for growth, through new client capture. Few mainstream investors trade individual bonds, and even fewer take positions in futures. While the stock market may always be the most popular market for investors, I expect a bright future for bond trading and futures, especially as more and more investors realize that their equity positions are best handled via an index fund. CME and MKTX are also 2 of the stocks here that can be bought for less than a 52-week high. Data by YCharts Interest Rate Decreases And Volatility Getting back to the broader group of holdings within IAI, I expect many of these firms to benefit from a decline in interest rates (which almost everyone expects) and increased market volatility (which I expect: see here, and here). The Initial Public Offering (IPO) space tends to struggle with rising and high interest rates, as prospect private companies understand that they're less likely to command top dollar for their firms in these environments. So they tend to hold off, waiting for a more favourable interest environment during which to conduct their IPO. Ernst & Young The IPO market has been weak in recent years. The especially poor 2024 numbers may be indicative of an anticipation for rate cuts in the foreseeable future. And yes, lower interest rates are almost certainly coming: TradingEconomics.com Firms like Goldman Sachs (GS), Morgan Stanley (MS) and Jefferies Financial Group (JEF), no relation to me, seem destined to benefit from a pickup in the IPO market once interest rates begin moving downwards. With regards to market volatility, this usually comes hand-in-hand with greater volumes and spread advantages for the big financial institutions. Many of these companies have the capital, smarts, and connections to take advantage of opportunities a volatile market may present. Furthermore, ratings agencies (of which S&P and Moody's are both within the top-10 of IAI) may find their services in greater demand. Valuation Sounds great, but does the valuation make sense? After all, this has been an ETF on a tear, and yours truly tends to be a contrarian investor. Data by YCharts Looking at the top 8 constituents of IAI, there's definitely been some movement in the valuation multiples these firms carry. And obviously investors are paying a higher price now than they were at the beginning of 2023 after the horrendous market performance in 2022. If my math is correct, the weighted average trailing P/E for the top 8 holdings is 32.36x. Pricey: yes. Prohibitive: not necessarily. Let's remember that the S&P 500 itself is trading at a TTM P/E of nearly 30x. Meanwhile, this group of brokers, dealers, and securities exchanges really does have some tailwinds to look forward to. And with Goldman having been the first of this group to report their Q2, we may see more strong reports buttressing this ETF. I thus offer IAI a Buy Rating. My recommendation for patient investors here might be to purchase a 1/2 position in IAI, and wait for any potential pullback in the ETF before establishing a full position. Risks / Considerations A primary risk to an investment in IAI would be a scenario where the Federal Reserve doesn't lower short-term interest rates, or decreases them at a slower pace than the market expects. The latter scenario might catalyze a pullback for investors looking for a dip.  I'm certainly also expecting U.S. Dollar weakness over the next year. In trying to warm up my thinking cap here, I can't immediately see why the group of companies constituting the IAI ETF would be harmed by a weakening USD, unless of course any of them hold unhedged currency exposures.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2451967169"}