Active Management

Decades of data across global markets reach the same verdict: the more frequently retail traders trade, the worse they perform. The infrastructure has never been more inviting. The losses have never been more documented. Here are some key statistics we will dive into further.

It seems to be the end of the Great Moderation Era for the U.S. economy. The Great Moderation Era—which marked most of the two decades leading up to the COVID-19 pandemic—is drifting away into what we call the new Temperamental Era.

Investors must determine what the AI capital-spending surge means for long-term business durability.

Markets are embracing the idea that we are in an AI supercycle. Investors are betting on a multi-decade technological shift, similar to the internet, that will transform industries, computing, and infrastructure.

Something unusual is happening in the US equity market. AI infrastructure winners continue to power market gains, yet more stocks are moving against the S&P 500. That doesn’t necessarily signal widespread fundamental weakness, though it may reflect AI-driven market imbalances creating opportunity beyond today’s leaders.

Halfway through the year, the U.S. equity market performance is broadening. That said, market concentration remains incredibly high, while equity and bond correlations sit in positive territory — conditions that scream a call for diversification. Investors are heeding that call, many with alternatives ETFs.

Entering Wednesday, the Russell 2000 and S&P SmallCap 600 indexes were up an average of 20.8% year-to-date, confirming small-cap stocks are back with a vengeance. Arguably overlooked in that scenario, some vibrant ETFs represent higher-quality approaches to smaller stocks.

On July 15, Direxion launched the Direxion Daily SK Hynix Bull 2X ETF (SKHL), seeking to replicate double the daily performance of the South Korean semiconductor manufacturers Sk Hynix (SKHY). The fund provides leveraged exposure to the world’s leading supplier of high-bandwidth memory chips. It boasts an expense ratio of 97 basis points.

As the forces shaping bond markets become more local, the opportunities become more global. From energy stress to fiscal policy to advances in AI, today’s defining market forces are likely to play out differently across regions, sectors and issuers.

Tax-aware long-short strategies are no longer the exclusive domain of institutional investors. As separate account delivery has expanded access, more advisors are asking whether tax-aware long-short belongs in their clients’ portfolios. Here are five practical considerations to help you decide.

The good news is real. The easy trade is not. Growth has held up, artificial intelligence investment is showing up in earnings and capital spending, and fixed income is offering yields that create serious cushion for portfolios.

Small-cap stocks remain the cheapest corner of the U.S. market. That’s true even after posting their best first-half performance in more than three decades, according to Morningstar’s Q3 2026 stock market outlook.

The rules governing global commodity markets are starting to witness a profound shift, which is putting critical minerals at the forefront of policy. On a recent episode of ETF Guide’s Metals in Motion, Justin Tolman, Senior Portfolio Manager and Economic Geologist at Sprott Asset Management, discussed this dynamic.

A hawkish pivot by the Federal Reserve and resilient U.S. growth could keep the dollar strong, but its gains could be limited by any narrowing of the U.S. interest rate advantage.

Friday, July 10, may have been ordinary for those outside the investment community, but for folks engaged with the market, it marked an opportunity to gain exposure to the second most valuable company in South Korea. On Friday, SK Hynix (SKHY) became available to U.S. investors via the Nasdaq.

This paper presents the case for emerging market (EM) allocations within the broader context of global investment strategy. In a period of heightened geopolitical complexity—spanning the 2026 US-Iran conflict, challenges to globalization, political transformation and ongoing great power competition—we believe the case for engaged emerging markets exposure has never been stronger.

The Q2 earnings season is off to a rollercoaster start. The big banks collectively reported strong numbers, boosted by active capital markets and another impressive set of sales & trading revenue. And it was the usual chorus of bank CEO macro commentary:

In June we pointed out that Health Care looks cheap. Even though it has been rallying hard of late, the sector continues to trade at a 59% price-to-sales discount to the S&P 500, despite having an 18% return on equity (ROE) that is just a hair below the 19% ROE accorded the S&P 500.

For decades, traditional index-based ETFs have served as the low-cost foundational anchor for core allocations, consistently demonstrating that outperforming a broad market index is an uphill battle.

What were the key takeaways from last month’s numbers? Our corporate bond specialists look back at the market’s performance and provide incisive commentary to help you make sense of what drove the market—and what may be on the horizon for fixed income investors.

Investors should consider where in the capital structure they are best compensated for risk. Equity may offer income with upside potential from active asset management, whereas debt may offer income with downside mitigation.

When it comes to space stocks, Elon Musk’s SpaceX (SPCX) is clearly the big kahuna. After all, the company just completed the largest initial public offering (IPO) in history, rapidly joining the $1 trillion-plus market capitalization club in the process. However, the broader space economy extends beyond a single company.

LPL Research examines how sticky inflation, Fed leadership changes, and AI-driven borrowing are shaping the fixed income outlook for 2026.

Historically, many in the pension industry viewed funding above the "plan termination level" as having little incremental value. Once a plan reached “plan termination level”, thought of as roughly 110% funding, conventional wisdom suggested additional surplus had little economic value because it is effectively "trapped capital."

It has been an eventful six months, and we are delighted that the Equity Dislocation Strategy has risen to the occasion. The Strategy generated a 9.05% net return in the first half of 2026, compared with a 1.3% return for MSCI ACWI Value minus MSCI ACWI Growth, a broad proxy for the value-growth spread.

After a wild last 12 months in a technology stock boom – and more recent volatility – the question du jour, in our view, is not whether AI is transformative.

Fixed income investors continue to grapple with an uncertain macro environment, dominated by higher-for-longer interest rates and a new-look U.S. Federal Reserve, in which rate hikes may be forthcoming. Rather than make a directional bet on interest rates to combat duration risk, consider floating-rate ETFs, a compelling option.

Given how crucial the fixed income sleeve can be to one’s portfolio, the recent concerns over inflation have caused many advisors and investors to rethink how they go about their exposure. This includes debating over active and passive funds, and reevaluating the type of bond duration that is most attractive at this moment.

Morningstar data shows most active strategies lag passive indexes, but selective active fixed income ETFs can generate alpha.

The Federal Reserve’s plans for interest rates in the second half of 2026 appear very much up in the air. That said, advisors and fixed income investors may want to renew their focus on short duration bonds and related ETFs.

What makes this earnings setup truly unique is the behavior of Wall Street analysts over the last 90 days. Because corporate guidance tends to be conservative, analysts historically cut estimates ahead of time.

For investors using direct-indexed equity strategies, tax-loss harvesting becomes a major focus, as it may help improve after-tax returns—but we think the calendar for tax-loss selling can make a big difference. Weekly tax-loss harvesting, in our view, offers the potential for more efficient tax-loss harvesting and more effective index tracking in turbulent markets.

Markets enter the second half of 2026 facing a familiar wall of worry—geopolitical conflict, oil prices, inflation, Federal Reserve policy, and questions around the durability of an AI-led equity rally. Yet the economic backdrop still looks resilient: growth remains solid, inflation has moderated, unemployment is reasonable, and market leadership appears to be broadening.

For investors who have been tracking this space, the signing is a continuation of a policy architecture that has been assembling with surprising speed.

The Great Moderation has given way to a more volatile era, where inflation shocks and market dispersion favor flexibility and diversification.

Chief Investment Officer Sean Taylor reviews a strong second quarter for emerging markets, where AI and reindustrialization were key drivers of investor returns.

Investors are often drawn to healthcare for its innovation and long-term growth potential. Yet in practice, allocations are often concentrated in a few large pharmaceutical companies, whether through direct stock picking or index weightings.

The small-cap stock rally we highlighted back in April has continued over the past few months, driven by factors such as robust U.S. economic growth disproportionately benefiting smaller, domestically focused businesses and the AI capital spending boom spreading to smaller tech and energy companies.

For much of the last decade, investing felt relatively one dimensional. Falling inflation, near zero interest rates and abundant liquidity rewarded long duration growth assets, compressed dispersion and made passive exposure difficult to challenge.

The capital markets have become an increasingly complex space for investors, complexities that are heightened by the sheer number of ways one can invest.

Royce Investment Partners: In this second quarter recap, Francis Gannon discusses how US small-and micro-cap stocks have continued to lead the US equity market in a robust period for equities.

Stocks staged a powerful recovery in Q2. The S&P 500 gained 15% and closed near record highs as oil round-tripped back to pre-conflict levels, AI enthusiasm returned, and the rally broadened well beyond the handful of names that led the market for three years.

Global equities rebounded in the second quarter as confidence in the AI investment cycle strengthened. As the third quarter begins, we believe markets have become priced for a smooth and profitable AI build-out, leaving little margin for error. June’s sharp sell-off in the Magnificent Seven stocks underscored how quickly sentiment can shift when crowded AI trades are priced for near-flawless execution.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

The S&P 500’s recent advance is masking a more dynamic story for US equity investors. Market winners remain confined to a tight clique of AI-related technology stocks, yet more companies are showing attractive fundamentals. For active equity investors, we believe this points to a more diversified and differentiated opportunity set ahead.

Close to 40 years ago, I moved from Canada to the U.S. after acquiring a controlling interest in U.S. Global Investors. I’ve built my entire life and career here, and in all that time, I’ve never stopped marveling at my adopted country.

The U.S. Treasury launched the Trump Accounts for childhood wealth building. Discover the five low-cost index ETFs anchoring the program.

While the Federal Reserve left interest rates unchanged at the latest meeting, investors increasingly speculate that rate hikes are on the table in 2026.

Six months is enough time for a lot to change. Your income, your expenses, your goals, and even the broader economy may look different than they did at the start of the year. And a plan that made sense in January might not fit the reality you're living in now.

Most global investors are not attuned to what can be seen on the horizon, not far from shore. After the Great Financial Crisis, Europe was slow to address the underlying capital issues. Rather than guillotining the problems, they allowed a slow bleed to take place.

The war in Iran has delivered an oil shock into a bond market that had not fully shaken inflation pressures. Higher energy prices have revived concerns about the path of inflation just as central banks were edging toward rate cuts, forcing a reassessment of what investors require to hold long-term bonds. That reassessment is now playing out in higher long-term yields and steeper yield curves globally.

The strong run by the Nasdaq-100 and the S&P 500 the last few years has loaded portfolios with heavy concentration risk. As a tiny group of mega cap tech giants shapes the market, finding meaningful diversification has become a priority for advisors. Data from last week’s VettaFi Mid-Year Market Outlook Symposium confirms that wealth managers are actively looking down the market-cap spectrum to rebalance risk.

Productivity is an essential component of economic success. It allows for growth without inflation; compensates for demographic deficits; and helps nations attract investment.

U.S.-listed ETFs locked in a record-breaking first half of the year. Read the analysis on active ETFs, fixed income shifts, and equity flows.

The Mag 7 has been the single largest driver of the stock market’s performance three straight years, accounting for over 20% of the S&P 500’s performance. However, there is a performance divergence happening in 2026 as the S&P 500 continues to go up, while the Mag7 go down.

A look at the resilient global economy, evolving market opportunities, and key risks shaping the investment outlook.

At first glance, allocating to emerging markets appears to add diversification to a portfolio. Look more closely, and the reality is more nuanced. In the late 1990s, the MSCI EM index was dominated by materials and telecoms, driven by the growth of mobile telephony and the internet bubble.

There’s no doubt the most important aspect to the June FOMC meeting was the fact that policymakers kept the Fed funds rate unchanged and removed its prior easing bias. But, this was not just your normal, run-of-the-mill policy gathering. It was Kevin Warsh’s first meeting as Fed Chair and instead of being a ‘rubber stamp’ for rate cuts, as some market observers were opining, the new FOMC leader put his stamp on the Fed in a different way.

Markets may have ended the first quarter with a thud, but stocks put another record run in the books to close out the first half of 2026. The U.S. ETF market had already shattered records, crossing the $15 trillion threshold and cruising past $1 trillion in net inflows right before summer officially began.

It’s been a long time coming for the asset management world, but ETF share classes are now a reality. Fidelity Investments has joined that movement, with the launch of its first ETF share classes for some of its mutual funds.