Top ETFs to Supercharge Your Portfolio Today!
#MarketTrends
Top ETFs to Supercharge Your Portfolio Today!
The largest sector ETFs, ranked by assets under management (AUM) as of July 9, 2024, offer cost-effective, diversified investment opportunities in technology, healthcare, energy, and other sectors. Invesco’s QQQ leads with $297.4B in AUM. Larger AUM often indicates better liquidity and lower expense ratios.
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The Insight: How To Find The Opportunities
Invest in sector-leading ETFs like Invesco QQQ for technology, Select Sector SPDR for healthcare, energy, and financials, and Vanguard for real estate and telecom.
These ETFs offer diversified exposure, better liquidity, and lower expense ratios, making them attractive options for both new and seasoned investors.
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#QuoteOfTheWeek
“Talking about ETFs is like talking about people. There are good ones, and there are bad ones.” – Jack Bogle
Investing in ETFs requires discernment, similar to evaluating people.
Opt for high-quality ETFs with strong AUM, liquidity, and lower expense ratios.
Research thoroughly to differentiate between well-managed and poorly performing funds.
Focus on reputable sector ETFs for diversified and reliable investment opportunities. Quality over quantity ensures long-term success.
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#News
RBA Rate Hike Speculation Soars with Job Market Booming!
Australia's markets experienced modest gains last week, with the ASX 200 closing 0.2% higher.
Despite an increase in the unemployment rate to 4.1%, job growth has exceeded expectations for the third consecutive month.
This persistent job growth has led to speculation that the Reserve Bank of Australia (RBA) might consider a rate hike in their August meeting.
Real Estate and Consumer Staples sectors posted significant gains, while Materials and Technology sectors lagged.
Earlier this week, the ASX 200 even surpassed 8000 points, driven by expectations of potential interest rate cuts by the US Federal Reserve in September.
S&P 500 and Nasdaq Tumble: What’s Driving the Decline?
Globally, markets displayed mixed results.
In the US, the S&P 500 and Nasdaq recorded notable declines due to concerns over potential tighter restrictions on chip sales to China.
However, the Dow Jones managed to edge up slightly.
Comments from Fed Chair Powell offered some optimism, suggesting that recent data indicates inflation is moving towards the 2% target.
Notably, US Q2 earnings have started strong, with a majority of companies reporting positive Earnings per share (EPS) and revenue surprises.
Fed Eyes Rate Cuts as Inflation Drops to 3%!
Slowing US inflation is boosting the chances of rate cuts.
The market is increasingly betting on a rate cut in September, thanks to inflation trending in the right direction.
Inflation for the year ending June 2024 was 3%, the lowest annual level since March 2021.
This, combined with last week's noted weakness in the labor market, provides the Federal Reserve with sufficient justification to start cutting rates.
According to the CME Fedwatch tool, the odds of three rate cuts by year-end stood at 50% on July 11th.
Skeptics argue that the Fed might avoid rate cuts in November or December to prevent market panic, especially around election time, and because employment data hasn't yet reached "recession territory" to justify more than one cut for now.
Investors Beware: AI Revenue May Take Longer Than Expected!
Revenue from AI investments may be slower to materialize than anticipated. Reports from Goldman Sachs, Barclays, and Sequoia Capital have urged investors to temper their current optimism, providing some sobering numbers.
Although companies collectively are investing hundreds of billions of dollars in AI infrastructure, the segment's largest revenue generator, OpenAI, is only generating $3.4 billion annually.
David Cahn from Sequoia warns that to cover energy costs and achieve margins, companies will need to generate four times the revenue of their investments in Nvidia data centers, which seems highly challenging, at least in the medium term.
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Best Regards,
James Lim, SFA Founder
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