Welcome to ETF UNO! Gold has become increasingly popular in recent years, especially after its strong performance in 2025. It’s now a key part of many investment portfolios due to geopolitical tensions and currency fluctuations.

We believe that simply buying and storing gold bars isn’t the best strategy for modern investors. Instead, Gold ETFs offer a practical way to gain exposure to gold prices without the hassles of storing gold or insurance. Today, we’ll explore gold ETFs, top options, riskier mining stocks, and advanced investment strategies. So, grab your favourite weekend beverage, and let’s dive into gold investing!

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🥇Why Gold Remains Popular

Gold has several characteristics that make it unique among assets.

• 📈A Hedge Against Inflation: When prices rise, and currencies lose purchasing power, gold often holds its value. That’s why many investors turn to gold during periods of inflation.

• 🛡️A Safe Haven Asset: When markets become uncertain—due to economic crises, geopolitical tensions, or financial instability—investors often move money into gold.

• 🧩Portfolio Diversification: Gold usually behaves differently from stocks and bonds. Adding a small amount of gold to a portfolio can sometimes reduce overall risk.

When people talk about gold ETFs, they usually mean $GLD ( ▲ 1.58% ) . It is the giant in the room. With a massive asset base, GLD boasts strong liquidity. It is a physically-backed ETF, meaning each share is supported by actual gold stored in London. Its strong reputation makes it popular among both institutional investors and beginners. However, GLD has a higher expense ratio compared to some newer competitors, which can add up for long-term holders.

The Undisputed King: GLD

Several other ETFs also track the price of gold. Some have lower fees, while others offer slightly different structures.

Here are a few well-known alternatives:

• iShares Gold Trust $IAU ( ▲ 1.53% ): Often considered the main competitor to GLD, this ETF is popular because of its lower expense ratio.

• SPDR Gold MiniShares Trust $GLDM ( ▲ 1.58% ): This “mini” version of GLD offers lower fees and smaller share prices, making it accessible to small investors.

• Aberdeen Standard Physical Gold Shares ETF $SGOL ( ▲ 1.57% ): This ETF stores its gold primarily in Swiss vaults, which some investors prefer for geographical diversification.

In practice, these ETFs behave very similarly because they all track the price of physical gold.

Investing in Gold Miners Through ETFs

Let's change the focus. The ETFs mentioned earlier track the price of the metal itself. However, if you're interested in investing in the companies that extract gold from the ground, you'll want to consider Gold Miner ETFs, which we have talked about before.

VanEck Gold Miners ETF (GDX) is the largest gold miners ETF

Investing in mining companies differs from investing in gold itself. Miners offer "operational leverage," meaning if gold prices rise by 10%, their profits could jump by 30% due to stable extraction costs. Consequently, miner ETFs can outperform physical gold in a bull market. However, they also carry higher risks; if gold prices drop or operational issues arise, miner ETFs can fall more sharply than the metal. Thus, they present higher risks and potential rewards.

The "Physical" Twist: ETFs You Can Exchange🪙

Here’s a piece of trivia that often surprises advanced investors: Some gold investment vehicles allow you to exchange your shares for physical gold. While standard ETFs like GLD typically do not permit retail investors to redeem shares for bullion—this privilege is usually reserved for large authorised participants—there are exceptions. One notable example is the Sprott Physical Gold Trust $PHYS ( ▲ 1.55% ) , which is structured as a closed-end fund rather than a standard ETF. It offers a redemption program that allows investors to exchange their shares for physical gold bars, though the minimum threshold to qualify is significant.

Why is this important? Even if you never intend to redeem your shares for a gold bar, knowing that the option exists enhances trust. It confirms that the gold is indeed there, bridging the gap between paper investing and tangible ownership. For those who prefer the convenience of a stock ticker while still having the option for physical redemption, this route is worth considering.

Gold-Backed Bridge: From Paper Shares to Physical Bars

🧩Advanced Knowledge: What the Pros Watch

What sets a savvy investor apart from a beginner is understanding key details—like whether an ETF is physically backed or uses futures contracts. Futures-based funds can have “roll costs” that impact long-term returns. It’s also essential to know the tax implications: physically backed gold ETFs are often taxed as “collectibles,” leading to a higher capital gains rate (up to 28% in the U.S.) compared to miner ETFs or stocks. Additionally, be aware of tracking error—the difference between the ETF’s performance and gold’s actual price—which can reduce your returns due to fees or inefficiencies. A quick check on these factors before buying can save you from surprises later.

Before you press the "buy" button for any of the gold ETFs, keep these core principles in mind:

• 🛟It's Insurance, Not Income: Gold does not pay dividends (unless you buy miners, and even then, they are sporadic). You buy gold to preserve wealth, not to generate cash flow. Think of it as a financial seatbelt, not the engine.

• 🛟Allocation is Key: You rarely want 100% of your portfolio in gold. A common strategy is a 5% to 10% allocation. This is enough to hedge against disaster without dragging down your growth if the stock market rallies.

• 🎢Volatility Exists: Gold is "safer" than crypto, but it isn't risk-free. It can go through years of stagnation. Patience is the primary virtue required for gold investing.

Top Points to Understand When Investing

Gold ETFs Uncovered💛

Gold remains a fascinating asset class, especially after its strong performance in 2025. It offers a unique blend of safety and opportunity that stocks and bonds simply cannot match.

To recap our journey today:

• GLD is the liquid, reputable standard, but IAU and SGOL offer cost and storage alternatives.

• Miner ETFs offer leverage and growth potential but come with higher business risks.

• Physical Redemption options (like PHYS) are available for those who want the ultimate backup plan.

• Taxes and Structure matter deeply; know what you are buying before you buy it.

We hope you enjoyed this weekend reading. Investing should be a journey of curiosity, not confusion. Understanding gold ETFs will help you build a resilient portfolio.

Happy Sunday readings

At ETF UNO, we simplify your investment journey by providing valuable insights and community support. Join us to enhance your ETF knowledge and connect with fellow investors. Happy investing and have a great weekend!

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.

Welcome to ETF UNO, fellow investors! We’re excited to share another edition of our newsletter. If you’re reading this, you’re likely interested in building diversified portfolios with ETFs. With so many funds available, investing can be overwhelming. Today, we’ll highlight a strong option for global diversification: the Dimensional International Value ETF $DFIV ( ▼ 0.66% ) .

In our quest for financial independence, relying only on domestic stocks is like trying to prepare a gourmet meal with just salt and pepper. You need a full spice rack to create a well-balanced dish. International exposure adds that necessary flavour, while value investing provides the substance. In this article, we will explain what DFIV is, why it could be a valuable addition to your portfolio, and the key factors you should consider before hitting the "buy" button. Whether you're a beginner making your first international trade or an experienced investor refining your asset allocation, this in-depth guide is designed for you.

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What is DFIV?

What is the Dimensional International Value ETF? DFIV is an actively managed fund that aims to give investors exposure to non-U.S. developed-market stocks. However, it’s not just a random assortment of foreign companies. The fund specifically focuses on large-cap companies that are trading at a discount to their book value, which is reflected in the "Value" aspect of its name.

The investment objective of DFIV is twofold:

• 📈To achieve long-term capital appreciation.  

• 💰To minimise federal income taxes on returns.  

This dual focus is essential because many investors pursue high returns only to see a significant portion of those returns diminished by tax inefficiencies. Dimensional has designed this ETF to be as tax-efficient as possible, leveraging the unique creation and redemption processes inherent to the ETF structure to manage capital gains distributions effectively.

DFIV carries a prestigious lineage. It was originally launched by Dimensional Fund Advisors in 1999 as a mutual fund. For over two decades, it operated within the mutual fund structure, building a long-term track record. In 2021, recognising the growing demand for tax-efficient and flexible trading vehicles, Dimensional converted the strategy into an ETF. This conversion allowed existing mutual fund shareholders to transition into the ETF structure while opening the door to new investors.

The Prestigious Lineage of DFIV

Notably, recent market analysis highlights DFIV's resilience and capability. It was among the best-performing international ETFs listed on the U.S. markets in 2025. This performance underscores the potential of its active management style to navigate complex global economic environments better than static index funds. For the ETF UNO community, this signals that DFIV is not just a legacy fund, but a competitive modern vehicle.

Investment Strategy📊

Now that we understand what DFIV is, the next logical question is: "Where does it fit?" Implementing DFIV requires a thoughtful approach to asset allocation. It should not be viewed as a standalone solution but rather as a specialised component within a broader ecosystem.

• 📦Core-Satellite Approach: Many investors use a U.S. total market fund as the core of their portfolio, with DFIV as a satellite holding that emphasises international value stocks. A typical allocation for DFIV ranges from 10% to 20% of the equity portion, depending on risk tolerance and confidence in international diversification.

• 🧩Completing the Value Puzzle: If you own a U.S. Value ETF, DFIV is its international counterpart. Value investing assumes that undervalued stocks will return to their mean price. Holding both U.S. and International Value ETFs diversifies your strategy, minimising the risk of a single country's economic downturn affecting your entire value allocation.

• 🏷️Tax-Loss Harvesting Partner: DFIV, being an ETF, allows for intraday trading, making it a great choice for tax-loss harvesting. If your international growth holdings decline while your value holdings are stable (or vice versa), you can switch strategies to realise tax losses while staying invested.

• ⚖️Rebalancing Anchor: International markets often move independently of U.S. markets. When U.S. stocks perform well, international markets may lag, and vice versa. Investing in DFIV naturally rebalances your portfolio. When one part outperforms, you can sell high and buy low in the underperforming section, maintaining your target risk level.

Investment strategies of DFIV

DFIV at a glance

ETF Issuer: Dimensional Fund Advisors

Inception: 1999-04-16 (Listing Date: 2021-09-13)

Asset Class: Equity

Underlying Index: DFIV is an active ETF

Geographical Focus: non U.S. developed markets

Expense Ratio: 0.27% (as of last data point)

Dividend Yield: 2.65% (as of last data point)

Distribution Frequency: Quarterly

Historical Performance

DFIV has a unique historical pedigree that sets it apart from many ETFs. Launched as a mutual fund in 1999, it benefits from over two decades of data on Dimensional's investment approach.

The Dimensional International Value strategy has consistently captured the "value premium," which refers to the excess returns value stocks typically generate over growth stocks. However, this premium varies from year to year. There have been periods, especially during the tech boom of the late 1990s and the 2010s growth surge, when value strategies lagged.

Since it transitioned to an ETF in 2021, the fund has preserved the investment discipline of its mutual fund predecessor while enhancing tax efficiency. This seamless conversion maintained cost basis and continuity for long-term holders. The fund's strong performance, particularly in 2025, suggests that the active management team has successfully avoided "value traps" and focused on companies with real profitability and stability.

DFIV Historical Performance (Since Listing)

www.tradingview.com/x/l4k81AkB

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

DFIV on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Academic Pedigree and Discipline: Dimensional Fund Advisors stands out as an asset manager founded by academics, including David Booth, who worked with Nobel laureates Eugene Fama and Kenneth French. Their investment philosophy relies on decades of peer-reviewed research. By investing in DFIV, you embrace a systematic, rules-based approach rooted in financial science, reducing the impact of human emotional errors on your returns.

2. Superior Tax Efficiency: One key advantage of the ETF structure over mutual funds is tax efficiency. DFIV minimises capital gains distributions by using a patented trading system that allows for the redemption of low-cost-basis stocks while retaining higher-cost-basis stocks in the fund. This approach can lead to significant tax savings in taxable accounts and enhance after-tax returns over time.

3. Access to Profitable Companies at a Discount: The DFIV screening process is selective, focusing on profitable, undervalued stocks rather than just cheap ones. It first filters for strong profitability metrics before applying its value criteria. This ensures that investors engage with high-quality businesses temporarily undervalued by the market, distinguishing DFIV from standard international value indexes.

Top 3 Reasons Not to Invest

1. The Risk of Value Underperformance: Value investing requires patience, as growth stocks can significantly outperform value stocks for long periods. If you invest in DFIV during a "growth bubble," you might see your peers with technology-heavy portfolios thrive while your value holdings lag. For those with a short time horizon or low tolerance for underperformance, the stress of holding value stocks can be challenging.

2. Currency Risk: Investing in non-U.S. developed markets exposes you to foreign currencies. If the U.S. dollar strengthens against the euro, yen, or pound, your DFIV holdings may lose value, even with strong stock performance. While a weaker dollar can boost returns, it adds volatility distinct from the stock market. Hedging this currency risk usually involves extra costs, which DFIV does not cover.

3. Complexity and Overlap: For beginner investors, DFIV can complicate portfolios. If you already have a Total International Stock ETF, adding DFIV may result in overlap, leading to unintended concentration in specific regions or sectors. Those who prefer a simple “three-fund portfolio” might find DFIV’s specific tilts unnecessary for their long-term goals.

🚀DFIV: from Mutual Fund to ETF Powerhouse

DFIV is a sophisticated investment option for discerning investors. It combines the rigorous academic research of Dimensional with the tax efficiency and flexibility of the ETF structure. With a history that dates back to 1999 and a successful conversion to an ETF in 2021, DFIV has established a proven track record in seeking long-term capital appreciation. Its recent recognition as a top performer in 2025 showcases its ability to navigate the complexities of the global market effectively.

While value investing can be effective, it is not a guaranteed solution for everyone. The higher fees, inherent volatility, and currency risks involved mean that it may not be suitable for all investors. It tends to perform best for those who understand the value premium, have a long-term investment perspective, and hold the fund in taxable accounts where they can take full advantage of its tax efficiency.

Investing is a journey of continuous learning. By understanding the nuances of funds like DFIV, you empower yourself to make decisions that align with your financial goals rather than following the crowd.

DFIV: A Strategic Tool for the Informed Investor

We are excited to enhance your investment journey at ETF UNO by providing weekly analyses, portfolio insights, and exclusive investment content. Join our community today by subscribing to our newsletter. Together, let’s build wealth for a brighter future!

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Hello, ETF UNO Community! Welcome to our newsletter, where we explore strategies for building a resilient portfolio. As we’ve discussed, the traditional 60/40 portfolio—60% stocks and 40% bonds—is facing challenges. With persistent inflation, geopolitical tensions, and shifting interest rates, asset class correlations are unpredictable. When stocks drop, bonds may not always provide the expected support.

We're examining a strategy once exclusive to elite hedge funds, now available in an ETF format: the iMGP DBi Managed Futures Strategy ETF $DBMF ( ▲ 1.85% ) . DBMF opens doors for ETF investors to opportunities previously reserved for the ultra-wealthy, functioning differently from standard equity or fixed-income funds. We'll discuss what this ETF does, why it exists, and if it should be part of your investment portfolio.

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What is DBMF?

At its core, the DBMF seeks long-term capital appreciation. However, the path it takes to get there is where the story gets interesting. Unlike a standard S&P 500 ETF that buys stocks and hopes they rise, DBMF employs both long and short positions in derivatives. Primarily, it utilises futures contracts and forward contracts across broad asset classes, including equities, fixed income, currencies, and commodities.

To understand DBMF, you must understand "Managed Futures". Historically, this has been the domain of hedge funds and Commodity Trading Advisors (CTAs). A managed futures strategy is typically trend-following. Imagine a sophisticated algorithm that monitors the momentum of various markets. If gold prices are trending upward, the strategy takes a "long" position to profit from the rise. If the price of crude oil is crashing, the strategy takes a "short" position to profit from the decline.

Why do hedge funds widely use this, but not by ordinary investors? Traditionally, accessing these strategies required high minimum investments, lock-up periods where you couldn't withdraw your money, and opaque fee structures. DBMF democratises this access. It packages a hedge fund-style strategy into a liquid, transparent ETF wrapper that trades on an exchange like any other stock.

DBMF: A Managed Futures Trend-Following Strategy

The most compelling feature of DBMF is its goal to perform regardless of the direction of equity markets. Most investors are "long-only," meaning they only make money if the market goes up. DBMF is "absolute return" oriented. Because it can short assets, it can generate positive returns during bear markets. Its exposure is built through some of the most liquid US-based futures contracts, enabling the fund to enter and exit positions efficiently without significant slippage. In essence, it acts as a diversifier that doesn't necessarily move in lockstep with the S&P 500 or the Aggregate Bond Index.

An Absolute Return Diversifier

DBMF seeks to replicate the performance of large institutional managed futures hedge funds by using liquid US futures contracts across four core asset classes: S&P 500, Treasury, currency, and commodity futures (including energy, metals, and agriculture). Instead of directly purchasing oil, gold, or stocks, the fund leverages futures contracts, which require less capital, allow for easy shorting, and provide efficient market exposure.

This structure makes the ETF capital-efficient and highly liquid. The fund actively adjusts its exposures in response to changing market trends, enabling it to pursue returns in both rising and falling markets without the complications of trading physical assets.

Investment Strategy🛠️

As an ETF investor, you likely wouldn't want DBMF to be the cornerstone of your portfolio. Instead, think of it as a specialised tool in your investment toolbox.

• 🛰️Satellite Approach: A common implementation strategy is the "Core and Satellite" approach. Your "Core" might remain your broad market equity and bond exposure. DBMF would serve as a "Satellite" holding. A typical allocation might range from 5% to 15% of the total portfolio, depending on your risk tolerance and view on market volatility.

• 🛡️Crisis Alpha Role: Investors often include DBMF to obtain "crisis alpha," which refers to assets that prosper when others fail. For instance, during high inflation, stocks and bonds may decline, while commodities such as energy and agricultural futures can rise, offsetting losses elsewhere.

• 🔄Rebalancing Discipline: DBMF's volatility requires discipline. If it excels during a market downturn, your allocation may exceed intentions. A strict rebalancing schedule ensures you sell high and buy low, maintaining your target risk profile. Integrating DBMF adds insurance that pays out during market slowdowns.

Implementing DBMF in Your Portfolio

DBMF at a glance

ETF Issuer: iM Global Partner

Inception: 2019-05-07

Asset Class: Multi-Assets (Derivatives)

Underlying Index: DBMF is an active ETF

Geographical Focus: Global

Expense Ratio: 0.85% (as of last data point)

Dividend Yield: 5.36% (as of last data point)

Distribution Frequency: Quarterly

Historical Performance

When assessing DBMF, it's important to critically evaluate its track record since its launch in early 2019, during turbulent market conditions.

2022 was a standout year for DBMF. As inflation rose and central banks increased interest rates, both stocks and bonds declined, posing challenges for the traditional 60/40 portfolio. In contrast, managed futures strategies like DBMF thrived, delivering strong positive returns during this market downturn. This performance underscored the effectiveness of trend-following strategies in capturing momentum amid macroeconomic changes.

Investors should be mindful of periods of underperformance. In 2020, during the pandemic crash and rapid recovery, trend-following strategies struggled amid market volatility, leading to false signals. This emphasises that DBMF is not a guaranteed solution; it performs best in sustained trending markets and may lag in choppy, range-bound conditions. Although past performance doesn't guarantee future results, the 2022 data highlights the fund's value in a diversified portfolio.

DBMF Historical Performance (5Y)

www.tradingview.com/x/aMaU0pwm

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

DBMF on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. True Diversification: The primary benefit is low correlation. Most ETFs in your portfolio likely rise and fall with the general economic cycle. DBMF operates on a different logic (price momentum). When your equity funds are red, DBMF has the mathematical potential to be green, smoothing out the overall ride of your portfolio.

2. Downside Protection: The ability to short markets is a superpower in a bear market. While you are holding onto your equity positions for the long term, DBMF can actively profit from declining prices in equities or bonds, offsetting some of the paper losses in the rest of your account.

3. Institutional Strategy, Retail Access: Previously, accessing a managed futures program meant wiring money to an offshore hedge fund with a two-year lock-up. DBMF offers daily liquidity, transparency of holdings, and the ease of trading within your existing brokerage account, bringing institutional-grade strategy to the individual investor.

Top 3 Reasons Not to Invest

1. Higher Expense Ratio: Active management and futures trading come at a cost. DBMF's expense ratio is significantly higher than passive index ETFs. Over long periods, these fees can drag on net returns, especially if the strategy goes through a prolonged period of sideways market movement.

2. Tax Complexity: While DBMF issues a standard 1099 (avoiding the dreaded K-1), its use of futures contracts triggers the "60/40 rule"—meaning 60% of gains are taxed as long-term and 40% as short-term, regardless of holding period. This blended treatment differs from standard equity ETFs and can complicate tax planning, so consulting a professional is recommended.

3. Volatility and Drawdowns: Do not mistake DBMF for a bond substitute. It is not a stable source of income. Managed futures strategies can experience volatility and drawdowns. If you are looking for stability and capital preservation in the traditional sense, the DBMF's fluctuating net asset value might cause unnecessary anxiety.

🌊Ride the Trend: DBMF Managed Futures Strategy

The iMGP DBi Managed Futures Strategy ETF (DBMF) offers an innovative option for investors worried about the traditional stock-bond correlation. By utilising long and short positions in equities, fixed income, currencies, and commodities, DBMF aims to generate returns independent of market direction.

We have examined how the trend-following mechanism has historically offered protection during inflationary periods, such as in 2022. While it offers benefits such as diversification and downside protection, it also presents challenges, including higher fees, tax implications, increased volatility, and potential drawdowns.

DBMF is not a substitute for core holdings, but a strategic complement. For disciplined investors willing to allocate a small portion of their portfolio to non-correlated assets, it can help navigate uncertainty with greater confidence.

DBMF: A Strategic Complement for Navigating Market Uncertainty

Thank you for reading this in-depth analysis. If you found this information valuable, we encourage you to subscribe to our newsletter and stay informed about the latest insights in ETF investing. Together, let's create portfolios that are designed not only for today's market but also resilient enough for tomorrow's challenges.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

If you've been following our ETF 101 series, you may remember our previous article on ETF performance, where we explored more than just the one-year return, discussing concepts like total return, risk-adjusted return, tracking error, and dividend yield.

For those joining us today, you might be wondering how to dig deeper without feeling overwhelmed. In this weekend’s session, we'll dive into how to analyse performance numbers and interpret them like a pro, uncovering the insights the data provides about future potential.

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🕰️Time Horizons: The Story Changes Over Time

In our newsletter, we always remind readers that past performance does not guarantee future results. A key reason for this is the time horizon that you choose to consider.

Imagine you are judging a runner. If you watch them sprint for 10 seconds, they might appear incredibly fast. However, if you watch them run a marathon, their pacing tells a completely different story. ETFs operate in much the same way.

A one-year return can often be misleading due to "noise." For example, a sector may have been popular for a few months, or a particular economic event may have temporarily driven up prices. If you choose to buy an ETF because it was the highest performer in the previous year, you might purchase at the peak of a market cycle.

When analysing performance, it's important to consider Rolling Returns. This term refers to evaluating performance over multiple overlapping periods, such as 3-year or 5-year intervals.

• ✅Why is this important? An ETF that consistently performs well over 5 years is often a safer investment than one that has had only one remarkable year.

• 🔍The lesson here: don't limit your review to the "Year-to-Date" figure. Instead, explore the "5-Year" or "10-Year" tabs on your research tool. Consistency over time is a stronger indicator of a solid strategy than a short-term spike in performance.

Why Rolling Returns Matter More Than Last Year's Winner

🍎Comparing Apples to Apples (Benchmarking)

Tracking Error measures how closely an ETF tracks its index, but another aspect to consider is Benchmark Appropriateness.

To understand performance, you must know what the ETF is trying to do.

• Comparing a Technology ETF to a Bond ETF can be misleading; the Tech ETF might have higher returns, but it operates in a different context.

• An ETF that tracks the S&P 500 should be evaluated against the S&P 500, while an active ETF should be compared to other active funds within its sector.

Why Context and Time Matter in ETF Investing

At ETF UNO, we believe context is king. An ETF that returns 8% might look boring until you realise its benchmark only returned 4%. That ETF just doubled the market's performance! Conversely, an ETF that returns 10% is underperforming if its sector returns 15%. Always measure performance relative to its intended goal, not just in a vacuum.

📊Consistency vs. The Home Run

In sports, a player who hits one home run but strikes out ten times is less valuable than one who gets a hit every time at the plate. In ETF investing, consistency often matters more than volatility.

Today, we'll focus on Performance Stability.

Consider these two types of ETFs:

• 🎢The Rollercoaster: An ETF that jumps 20% one year and drops 15% the next.

• 📈The Steady Climber: An ETF that increases by 8% one year and 9% the next.

When reviewing performance history, aim for the "Steady Climber". It's easier to hold investments that don't swing wildly. Analyse the path of returns to see if they were achieved steadily or through a bumpy ride. Did the ETF achieve its returns through a smooth upward trend, or was it a bumpy ride that might have caused you to sell in a panic?

Performance Stability: Why the Path of Returns Matters

🧩Putting It All Together with the Radar Chart

We understand your concerns: "This sounds like a lot of work. Do I really have to check 5-year returns, compare benchmarks, calculate dividend reinvestment, and analyse stability for every ETF?"

The honest answer is that while you should do these evaluations, you don't have to do them manually.

That's why we developed the ETF UNO Radar Chart. As we mentioned in a previous article, this tool is designed to condense detailed metrics into a single, easy-to-read visual format.

• ☑️It accounts for the Time Horizon by giving greater weight to longer-term performance.

• ☑️It respects the Benchmark by evaluating relative strength.

• ☑️It visualises Consistency, allowing you to assess stability at a glance.

Our goal is to simplify the complex. We want you to spend less time crunching numbers and more time enjoying life, confident that your portfolio is built on solid performance data.

The ETF UNO Radar Chart

The Hidden Truths of ETF Performance💎

Before you finish your coffee and start your new week, let's recap what we've learned in this deep dive:

• Look Beyond One Year: Short-term returns can be misleading. It's important to focus on 5-year or 10-year performance data to identify the true trends.

• Contextualise the Return: Always compare an ETF's performance against its specific benchmark or peer group, rather than just against the general market.

• Value Consistency: Choose ETFs that show stable, consistent growth rather than those with erratic spikes and dips.

• Use the Right Tools: Utilise tools like the ETF UNO Radar Chart to visualise these complex data points effectively.

Investing is a journey, and it's always better with a guide. We hope this deep dive into performance has empowered you to look at your portfolio with fresh eyes. There is so much more to uncover, and we are just getting started.

Happy Sunday readings

Subscribe to our newsletter for access to educational resources, exclusive analyses, and connections with like-minded investors. Each week, receive valuable insights in your inbox to stay informed.

Thank you for spending your Sunday with us. Remember, knowledge is power, but applied knowledge leads to wealth. Stay tuned for our next edition on ETFs.

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.

Welcome to this week's ETF UNO newsletter! If you've been exploring the fixed-income landscape, you may have noticed the impact of changing interest rate expectations and widening credit spreads. This raises an important question: Is a passive bond index still the best core holding for your portfolio?

The TCW Core Plus Bond ETF (FIXT) offers an active core-plus bond solution designed to deliver attractive total returns while remaining benchmark-aware and effectively managing risk. It combines traditional, high-quality bonds with higher-yielding "plus" sectors in a disciplined manner.

Is FIXT the right bond ETF for your portfolio? Let's explore.

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What is FIXT?

Launched in June 2025 through the conversion of TCW's established MetWest Intermediate Bond Fund, FIXT represents a thoughtful evolution in fixed-income ETF design. With an expense ratio of 0.40% and approximately $215 million in assets under management, this actively managed ETF pursues total return through TCW's "opportunistic core plus" approach.

What does "core plus" mean? It refers to the ability to go beyond the foundational Bloomberg U.S. Aggregate Bond Index, which is the standard for core fixed-income investments.

FIXT maintains broad exposure to investment-grade government, agency, and corporate bonds as its stable "core." It also allows strategic investments in higher-yielding sectors, such as non-agency mortgage-backed securities, asset-backed securities, and select below-investment-grade credits, when opportunities arise.

Beyond the Core: Adding Opportunistic Higher-Yield Sectors

This systematic flexibility matters profoundly in today's environment. While passive bond ETFs must mechanically hold whatever the index dictates—often overweighting the most indebted issuers—FIXT's managers can shift allocations in response to changing market conditions, tilting toward sectors offering superior risk-adjusted returns.

For example:

• 📈When credit spreads widen, and valuations improve → increase exposure to high yield or structured credit

• 🛡️When recession risks rise → reduce riskier sectors and move toward safer bonds

• 🌍When emerging markets strengthen → selectively add EM debt

The result? Potential for enhanced income and total return, albeit with somewhat higher volatility than a pure core bond fund.

FIXT's key strength for investors today is its proactive approach to interest rate risk. Unlike passive funds tied to their benchmarks, FIXT's managers adjust their interest rate sensitivity in line with their economic outlook.

They shorten duration when rates are expected to rise and extend it when the Federal Reserve signals easing to capture price appreciation.

This strategy was vital during the historic rate shock of 2022, when the Bloomberg Aggregate Index suffered its worst calendar-year loss at -13.01%. Funds that could shorten duration ahead of tightening cycles were able to preserve more capital.

Proactive Bond Management: Flexibility Beyond the Index

FIXT's strategy leverages TCW Group's nearly 50 years of fixed-income expertise. Established in 1971 in Los Angeles, TCW is known for its deep credit research and sector specialisation. Its unique, team-based approach allows specialist groups to provide insights to portfolio managers who make comprehensive allocation decisions. This structure enables FIXT to identify relative-value opportunities that passive funds may miss, such as increasing investments in non-agency mortgage-backed securities (MBS) when spreads widen significantly compared to Treasuries.

Investment Strategy💡

For investors building diversified portfolios, FIXT serves as an ideal substitute for passive core bond exposure. Here are some strategies for implementation:

• 🔄Core Bond Holding Replacement: Replace your traditional aggregate bond ETF allocation with FIXT to maintain similar risk characteristics while gaining the benefits of active management. Due to FIXT's intermediate-duration profile, it integrates naturally with equity allocations in a conventional 60/40 portfolio.

• 💰Income Enhancement Strategy: Combine FIXT with a short-duration ETF to create a barbell structure—utilising the short end for stability and liquidity, while FIXT offers income enhancement and tactical flexibility. Together, these components can create a diversified, income-focused ETF portfolio.

• 🌤️All-Weather Fixed Income Sleeve: For investors seeking a single-bond-fund solution, FIXT's multi-sector flexibility provides diversification across credit types and maturities without requiring multiple ETF purchases.

Given FIXT's active nature, monitor its sector allocations quarterly via TCW's fact sheet. Significant shifts into "plus" sectors (such as high-yield or emerging-market debt) may signal increased risk appetite—useful context for your overall portfolio risk assessment.

Three Ways to Implement FIXT

FIXT at a glance

ETF Issuer: TCW

Inception: 2025-06-16 (Listing Date)

Asset Class: Fixed-Income

Underlying Index: FIXT is an active ETF

Geographical Focus: Global

Expense Ratio: 0.40% (as of last data point)

Dividend Yield: 3.69% (as of last data point)

Distribution Frequency: Monthly

Historical Performance

Because FIXT converted from a mutual fund in June 2025, its ETF-specific track record remains brief. However, its predecessor fund's performance offers meaningful insight:

• 1-Year Return: +7.78%

• 3-Year Annualised: +4.50%

• 5-Year Annualised: +0.97%

• 10-Year Annualised: +2.26%

• Since Inception: +4.26% (annualised)

These figures reflect a strategy designed for full market cycles—not short-term outperformance. Notice how the 5-year return lags the 10-year figure? That captures the brutal 2022 rate shock period. Yet the strategy's discipline through that drawdown positioned it for stronger recent returns as rates stabilised—a reminder that core plus strategies reward patience.

FIXT Historical Performance (Since Listed)

www.tradingview.com/x/KRPALeyZ

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

FIXT on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Active Management at ETF Efficiency: FIXT provides institutional-grade active fixed income management through a transparent, liquid ETF structure, eliminating mutual fund redemption pressures and ensuring daily pricing transparency.

2. Benchmark-Aware Flexibility: Unlike unconstrained bond funds that may venture into speculative territory, FIXT maintains a focus on "benchmark awareness"—anchoring to core fixed income principles while opportunistically enhancing returns. This approach provides reassurance for conservative investors who are cautious of excessive risk-taking.

3. Proven Rate Cycle Navigation: The strategy's 20+ years of history demonstrate its ability to navigate various interest rate environments—from the low-rate era of the 2010s to the drastic repricing in 2022—without significant drawdowns.

Top 3 Reasons Not to Invest

1. Limited Standalone ETF Track Record: Although the underlying strategy has decades of history, FIXT launched in June 2025. Investors who prefer a longer performance record may choose more established active bond ETFs.

2. Moderate Assets Under Management: With approximately $215 million in assets, FIXT falls below the liquidity threshold for mega-cap bond ETFs. While this amount is sufficient for most individual investors, very large allocations may encounter issues with bid-ask spreads.

3. Active Risk ≠ Guaranteed Outperformance: Active management carries the risk of poor decision-making, which may lead to underperformance against the benchmark. In strong bull markets for core bonds, passive funds can outperform active ones.

🧠Active Bonds Made Simple

FIXT isn't a magic bullet. It won't eliminate interest rate risk or guarantee outperformance in every environment. But in a world where passive bond indices mechanically overweight the most indebted issuers and lack flexibility to capitalise on dislocations, FIXT offers something valuable: intentionality.

For ETF investors who've moved beyond basic index investing and seek smarter fixed-income exposure—without venturing into speculative unconstrained strategies—FIXT offers a compelling middle path. It's core bond exposure with a brain: disciplined enough for the foundation of your portfolio, flexible enough to adapt when opportunities emerge.

Are you eager to explore active fixed-income strategies and gain exclusive insights on ETFs? As active ETFs transform the fixed-income landscape, there are growing opportunities to build smarter, more resilient portfolios. Sign up for the ETF UNO newsletter today and help empower the next generation of ETF investors, one actionable insight at a time.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Hello ETF UNO readers! If you’re looking for a way to generate a steady income without the ups and downs of the market, today’s ETF might interest you. The Invesco S&P 500 High Dividend Low Volatility ETF $SPHD ( 0.0% ) offers a strong mix of income and stability. For those torn between high yields and peace of mind, SPHD is worth considering. Let’s see why this $3.3 billion fund has become a favourite for investors seeking reliable dividends.

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What is SPHD?

SPHD tracks the S&P 500 Low Volatility High Dividend Index—a brilliantly straightforward methodology that applies two filters to the S&P 500 universe.

1. 🤑First, it identifies the 100 highest dividend-yielding stocks. Then, from that universe, it selects the 50 least volatile securities over the trailing 12 months.

2. 💰These 50 stocks are weighted by their trailing 12-month dividend dollars, meaning companies paying more actual cash receive larger allocations.

This dual-screening approach addresses a crucial issue in dividend investing: the "value trap." Many high-yield stocks offer appealing dividends because the market anticipates potential problems, such as declining earnings, excessive debt, or disruptions to the business model. By focusing on low volatility, SPHD effectively eliminates distressed high-yield stocks that might reduce their dividends in the future. The index does not simply seek high yields; it aims for sustainable yields from companies that demonstrate price stability, a proxy for business resilience.

Avoiding the Value Trap with Low Volatility Dividends

The outcome is a focused portfolio of 50 large-cap U.S. stocks, currently offering a trailing 12-month distribution yield of approximately 4%. With an expense ratio of only 0.30%, SPHD provides this advanced screening at a reasonable cost, though it may not be the cheapest option available in the dividend space.

A Focused Portfolio of 50 Large-cap U.S. Stocks

Investment Strategy📊

SPHD should not be your entire equity allocation. Instead, consider it a strategic satellite holding designed for specific purposes within a diversified portfolio.

• ⚓Defensive Equity Sleeve: For investors approaching retirement or with lower risk tolerance, allocate 15-25% of your equity portfolio to SPHD as a volatility dampener. Its focus on utilities, consumer staples, and healthcare provides natural ballast during market turbulence.

• 🌉Income Bridge: Retirees who need a monthly cash flow can pair SPHD (which pays monthly dividends) with bond ETFs to create a reliable income stream without selling principal during downturns. Its 4% yield meaningfully supplements fixed income in today's environment.

• 🎯Tactical Hedge: During periods of elevated market volatility or when valuations appear stretched, temporarily overweight SPHD relative to your core S&P 500 holding. When markets stabilise, rebalance back to your strategic allocation.

• ⚖️Complement to Growth: Younger investors focused on growth stocks can use SPHD as a counterbalance—perhaps 10-15% of their equity portfolio—to reduce overall portfolio volatility without abandoning their long-term growth orientation.

Remember: SPHD's defensive tilt means it will typically lag during strong bull markets dominated by technology and growth stocks. That's not a flaw—it's the trade-off for reduced drawdowns during corrections.

SPHD: Satellite Applications in a Portfolio

SPHD at a glance

ETF Issuer: Invesco

Inception: 2012-10-18

Asset Class: Equity

Underlying Index: S&P 500 Low Volatility High Dividend Index

Geographical Focus: U.S.

Expense Ratio: 0.30% (as of last data point)

Dividend Yield: 3.87% (as of last data point)

Distribution Frequency: Monthly

Historical Performance

Let's evaluate SPHD's performance history in the proper context. Although past performance does not guarantee future results, it illustrates how the strategy responds during various market cycles:

• Past year: 7.64%

• Past 3-year annualised: 7.78%

• Past 5-year annualised: 9.85%

• Past 10-year annualised: 8.66%

Its performances prove that the focus is on consistent, smoother performance.

SPHD often maintains a heavier exposure to sectors like utilities, real estate, consumer staples, energy, and financials, while having less exposure to big tech and high-growth sectors. This distinct sector tilt explains why its performance may lag during powerful, tech-driven market rallies but tends to hold up better in more defensive or volatile market environments.

SPHD Historical Performance (5Y)

www.tradingview.com/x/a5fNf36N

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

SPHD on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Genuine Downside Protection with Income: Unlike bond proxies, which get crushed when rates rise, SPHD's equity nature provides inflation protection, while its low-volatility screening delivers genuine drawdown mitigation. The 4% yield isn't just income—it's compensation for accepting lower growth potential.

2. Automatic Value Trap Screening: The volatility filter does the heavy lifting you'd otherwise need to do with fundamental analysis. Companies with deteriorating businesses often exhibit rising share price volatility before dividend cuts materialise. SPHD's methodology front-runs this risk.

3. Monthly Distributions Enhance Compounding: Receiving dividends 12 times per year (versus quarterly) allows for more frequent reinvestment opportunities—a subtle but mathematically meaningful advantage for long-term compounding, especially in tax-advantaged accounts.

Top 3 Reasons Not to Invest

1. Growth Sacrifice During Bull Markets: SPHD consistently underperforms during technology-led rallies. In 2023, while the S&P 500 gained over 24%, SPHD returned just 1.32%. If you can't stomach lagging the broader market for extended periods, this strategy will test your discipline.

2. Sector Concentration Risk: SPHD's methodology primarily focuses on defensive sectors, such as utilities, consumer staples, real estate, and healthcare, which often make up over 60% of the portfolio. This concentration can leave the sector vulnerable to shocks specific to the sector, such as interest rate spikes that simultaneously affect both real estate and utilities.

3. Fee Consideration Versus Alternatives: At 0.30%, SPHD costs more than broad dividend ETFs like SCHD (0.06%) or $VYM ( ▼ 0.88% ) (0.06%). You're paying for the low-volatility screen—a feature worth evaluating against your specific risk tolerance and income needs.

🧭Build a Calmer Portfolio with SPHD

SPHD serves a vital role in the ETF ecosystem by using a rules-based strategy to select sustainable dividend-paying stocks while avoiding distressed, high-yield stocks. Its combination of high yield and low volatility produces a portfolio that stands apart from both the broader market and traditional dividend funds, especially during times of market stress.

Is SPHD the right investment for you? If you value stability and need a reliable income while being patient during growth periods, consider SPHD as a supplemental investment. However, if you seek maximum returns and can handle significant drawdowns, look elsewhere.

The beauty of ETF investing is in its variety. You can combine SPHD’s defensive dividend profile with core market exposure and a growth approach to build a portfolio that meets your financial goals across market cycles.

SPHD: the Defensive Dividend Play

Excited to discover ETF strategies alongside fellow investors? Join the ETF UNO newsletter! We bring you valuable insights that empower long-term investors. Subscribe today and transform your approach to developing strong, income-generating portfolios for a brighter financial future!

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Have you ever wanted to create a diversified portfolio with just one trade? With multi-asset ETFs, you can get a mix of stocks, bonds, and sometimes commodities with a single click. Professional portfolio managers handle the details, so you can focus on what truly matters: enjoying your life.

Let’s explore why these ETFs exist, why they can make investing easier, and take a look at some of the most interesting multi-asset ETFs you should know.

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Why Multi-Asset ETFs?

Building a truly diversified portfolio from scratch is more challenging than it seems. You need stocks for growth, bonds for stability, and possibly some commodities as a hedge. You could buy three ETFs and manage them manually. But then you must:

• 🔄Rebalance regularly

• 👁️Monitor markets

• 🎚️Adjust risk levels

• 🤔Decide when to shift allocation

For many investors, this becomes time-consuming and stressful.

Building a Balanced Portfolio is not Easy

This is where multi-asset ETFs come in. They may not provide extraordinary returns during a booming market, but they are designed to perform consistently well in various economic conditions. Consider them the dependable sedan of investing: they might not be the quickest vehicle on the road, but they will safely take you through rain, snow, and sunshine without breaking down.

These ETFs typically combine equities, fixed income, and sometimes alternative assets under professional management. The portfolio managers actively adjust allocations based on market conditions—something most individual investors struggle to do consistently (and emotionally). For investors who value simplicity without sacrificing sophistication, multi-asset ETFs offer an elegant solution.

🌟Top Multi-Asset ETFs

Now let’s explore five of the most interesting multi-asset ETFs available today. Each has its own style and personality.

1. Capital Group Global Balanced ETF (CGBL)

Inception: 2023-09-26

Expense Ratio: 0.33%

Provider: Capital Group

Asset Mix: Equity + Bond

The Capital Group Core Balanced ETF offers a flexible asset allocation approach. Instead of a strict 60/40 split, it maintains an equity allocation of 50% to 75% and at least 25% in bonds. This active management allows experienced portfolio managers to seize opportunities or implement defensive strategies as needed.

With decades of institutional expertise, Capital Group uses a fund-of-funds structure that invests in other Capital Group ETFs to meet its balanced objective.

2. SPDR Bridgewater All Weather ETF (ALLW)

Inception: 2025-03-05

Expense Ratio: 0.85%

Provider: SPDR

Asset Mix: Equity + Bond + Commodity

Launched in March 2025, $ALLW ( ▲ 0.61% ) applies Ray Dalio's investment philosophy for everyday investors. Rather than predicting economic scenarios, the All Weather ETF balances risk across four environments: rising growth, falling growth, rising inflation, and falling inflation.

Using a "risk parity" approach, the fund diversifies by economic sensitivity. For instance, when stocks falter during inflation, commodities and inflation-linked bonds may perform better, while long-duration bonds can rally during growth slowdowns. ALLW targets an annualised volatility of 10% to 12% for smoother returns over time. It's like packing for any weather: you might not be perfectly suited for each moment, but you won’t be caught unprepared.

3. iShares Core Growth Allocation ETF (AOR)

Inception: 2008-11-04

Expense Ratio: 0.15%

Provider: iShares

Asset Mix: Equity + Bond

AOR is designed for growth-oriented investors, featuring a "Goldilocks" portfolio with around 60% equities and 40% bonds. It uses a fund-of-funds structure, investing in various iShares ETFs covering U.S. stocks, international markets, emerging markets, and diverse bonds. With a low expense ratio and the expertise of iShares, AOR offers a simple path for investors seeking growth with some safety.

4. Pacer Trendpilot US Large Cap ETF (PTLC)

Inception: 2015-06-11

Expense Ratio: 0.60%

Provider: Pacer ETFs

Asset Mix: Equity + Bond

$PTLC ( ▼ 1.32% ) takes a unique approach by using a rules-based trend-following strategy. It maintains 100% exposure to the S&P 500 when markets are rising and shifts to cash or Treasury bills during downturns.

Think of PTLC as an automatic pilot for your portfolio. While it may not catch every market dip perfectly, it aims to benefit from sustained upswings and reduce exposure during declines. PTLC provides a systematic way to manage downside risk without the emotional pressure of making decisions in difficult market conditions.

5. WisdomTree U.S. Efficient Core Fund (NTSX)

Inception: 2018-08-02

Expense Ratio: 0.20%

Provider: WisdomTree

Asset Mix: Equity + Bond

NTSX may seem complex, but it offers a unique "90/60" exposure: 90% in U.S. large-cap stocks and 60% in U.S. Treasury futures, creating 150% exposure through strategic use of futures contracts. This approach provides increased bond stability while allowing strong equity participation—all within a single fund that rebalances quarterly. NTSX shows that multi-asset investing can be smart without compromising.

🚀Smarter Diversification Starts Here

Multi-asset ETFs aren't about chasing the highest possible returns. They're about building resilient portfolios that help you stay invested through market cycles without losing sleep. Whether you prefer Capital Group's flexible balancing act (CGBL), Bridgewater's economic scenario planning (ALLW), iShares' classic allocation (AOR), Pacer's trend-following discipline (PTLC), or WisdomTree's capital-efficient innovation (NTSX), there's a solution that fits your temperament.

The beauty of these funds? They transform complex portfolio construction into a single decision. No more spreadsheet juggling or quarterly rebalancing marathons. Just thoughtful exposure designed to weather various market conditions—exactly what weekend reading should deliver: insight without overwhelm.

We hope you've enjoyed this relaxed exploration of multi-asset ETFs. Remember, the best portfolio isn't the most complicated one—it's the one you can stick with through thick and thin.

Enjoy the Weekend’s Readings

Ready for ETF insights that cut through the noise and speak to you? Join the investors who read ETF UNO each week. We provide the clear, concise guidance you need for navigating markets with more confidence and less complexity—because understanding your investments should feel empowering, not exhausting.

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.

Greetings to all ETF UNO readers! Welcome to February 2026. In today's ETF landscape, where passive indexing dominates headlines and low-cost beta reigns supreme, an intriguing counter-movement is emerging: the rise of high-conviction active ETFs. A notable example is the Alger 35 ETF $ATFV ( ▼ 2.26% ) , which has a concentrated portfolio, raising a thought-provoking question: Can fewer holdings lead to better investment outcomes?

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What is ATFV?

Launched in May 2021 by Fred Alger Management—a firm with deep roots in growth equity investing since 1964—ATFV represents a bold bet on fundamental research and manager conviction. Unlike the sprawling 500-stock portfolios many investors have grown accustomed to, this ETF deliberately narrows its focus to approximately 35 hand-selected U.S. growth companies across market capitalisations. It's not merely an ETF with a number in its name; it's a philosophy crystallised into a ticker symbol.

Focused Conviction: The Concentrated Growth ETF

To safeguard its investment strategy, the ATFV ETF uses a non-transparent structure. This means that its portfolio holdings are not disclosed daily, which prevents others from copying its trades and enables more strategic positioning. The fund aims for long-term growth by selecting companies that exhibit strong, sustainable advantages, such as competitive moats, innovation, and excellent management.

Protected Strategy, Focused on Long-Term Growth

Dan Chung has served as Alger's Chief Executive Officer and Chief Investment Officer since 2006. He co-manages the ATFV fund alongside George Ortega. Chung's investment philosophy focuses on identifying companies well-positioned to benefit from major secular trends, particularly in artificial intelligence, cloud computing, and digital transformation. He emphasises the importance of rigorous fundamental analysis in this process. In a recent interview, Chung stated, "This is an AI boom, not a bubble," underscoring the team's strong belief in the structural technological shifts driving long-term value creation.

The Alger 35 ETF delivered an impressive 38% return in 2025, significantly outperforming its Large Growth category peers, which averaged a 16% gain. This performance reinforced ATFV's reputation as a high-conviction growth investment.

While mining and precious metals ETFs led the overall market amid a commodities rally, ATFV distinguished itself in the U.S. growth equity space, showcasing the power of concentrated active management over passive indexing.

Dan Chung's team demonstrated expertise in identifying companies poised to benefit from trends such as artificial intelligence and digital transformation. For growth-focused investors, ATFV's 2025 results highlight how fewer, high-conviction ideas can meaningfully outperform when backed by thorough research and timely execution.

The Alger 35 ETF's 2025 Triumph: Focus Over Breadth

Investment Strategy📊

For ETF investors constructing diversified portfolios, ATFV shouldn't serve as a core holding, replacing broad-market exposure. Instead, consider these strategic implementation approaches:

• 🛰️Equity Satellite Strategy: Consider allocating 5–10% of your equity investment to ATFV as a high-conviction satellite position in addition to core holdings. This approach offers concentrated growth opportunities without significantly increasing your portfolio's risk exposure.

• 🏋️Barbell Approach: Combine ATFV with a low-volatility ETF on one side and broad market exposure on the other. This creates a risk-return barbell, capturing gains from Alger's concentrated picks while reducing overall portfolio volatility.

• 🔀Thematic Overlay: If you believe in the potential of U.S. growth equities and want active management to navigate valuation extremes, ATFV can enhance passive growth ETFs by helping to avoid overvalued stocks through active security selection.

• ⚖️Rebalancing Discipline: Given ATFV's concentrated nature and higher volatility profile, implement strict rebalancing rules—perhaps quarterly—to prevent the position from drifting beyond your intended allocation during strong performance periods.

ATFV at a glance

ETF Issuer: Fred Alger Management

Inception: 2021-05-03

Asset Class: Equity

Underlying Index: ATFV is an active ETF

Geographical Focus: Global

Expense Ratio: 0.55% (as of last data point)

Dividend Yield: 0.21% (as of last data point)

Distribution Frequency: Annual

Historical Performance

ATFV's performance history reflects its focused investment strategy. This outperformance illustrates the potential rewards of high-conviction positioning in strong-growth market environments.

However, concentration has its downsides. During market corrections or shifts away from growth stocks, ATFV has experienced sharper declines compared to more diversified peers. As of late 2025, its three-year annualised return is in the mid-teens—respectable but not extraordinary. This highlights how concentrated strategies can deliver impressive short-term results while struggling to maintain consistency throughout full market cycles.

The fund's expense ratio of 0.55% sits above passive alternatives but remains competitive within the active ETF space. For context, this is less than half the cost of many actively managed mutual funds pursuing similar strategies—a meaningful advantage for long-term compounding.

ATFV Historical Performance (Since Inception)

www.tradingview.com/x/OhwauB88

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

ATFV on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Manager Conviction Without Mutual Fund Frictions: Dan Chung and George Ortega manage significant personal assets alongside client assets, aligning their interests. Unlike traditional mutual funds, which face daily liquidity demands and tax inefficiencies, ATFV operates as an ETF, offering intraday liquidity, tax efficiency through in-kind transactions, and no minimum investment requirements.

2. Secular Growth Exposure with Active Risk Management: While passive growth ETFs hold every company in their index regardless of valuation, ATFV's team can adjust positions by trimming excessive holdings or increasing investment in strengthening companies. This flexibility was valuable during the 2022 growth stock correction, allowing active managers to redeploy capital at attractive entry points.

3. Focused Portfolio Amplifies High-Conviction Ideas: The ETF contains around 35 high-conviction holdings, unlike the hundreds in typical active funds. There are no "closet index" fillers to dilute performance. When Alger's research identifies a strong opportunity, it carries significant weight, potentially enhancing returns if the thesis proves correct.

Top 3 Reasons Not to Invest

1. Performance Chasing Danger: Strong recent returns tempt investors to buy at cyclical peaks. Growth stocks have historically experienced violent mean reversion. ATFV's strategy works brilliantly in growth-favourable environments but can underperform significantly during value rotations or rising rate environments.

2. Limited Track Record: Launched in May 2021, ATFV hasn't yet navigated a full market cycle independently. While Alger's firm has decades of experience, this specific ETF structure and concentrated mandate lack the multi-cycle validation many prudent investors require before meaningful allocation.

3. Opacity Creates Blind Spots: The non-transparent structure that protects Alger's strategy also prevents investors from knowing their exact exposure. You cannot assess sector concentration, overlap with other holdings, or position sizing until quarterly disclosures are available—potentially creating unintended concentration risks in your broader portfolio.

🚀Fewer Holdings, Bolder Bets

The Alger 35 ETF represents an intriguing evolution in active management—merging the depth of fundamental research with the structural advantages of ETFs. It's not a "set-and-forget" core holding, nor should it replace diversified market exposure. But for investors with high risk tolerance, long time horizons, and conviction in U.S. growth equities, ATFV offers a compelling satellite option backed by experienced management.

Success with concentrated strategies demands emotional discipline: the ability to hold through volatility, resist performance-chasing impulses, and maintain appropriate position sizing. As with any high-conviction investment, ATFV works best when understood not as a magic bullet, but as one specialised tool within a thoughtfully constructed portfolio.

Overall Rating of 5-star among Large Growth Funds

Are you excited to explore beyond just the basics of returns? In the ETF UNO community, we dive into the fascinating intricacies of ETF construction and management. Join us to uncover the factors driving performance and connect with fellow investors who value strategic thinking as much as achieving results!

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Hello, ETF UNO readers! Ever noticed how the world's most consequential innovations often emerge from unexpected places? The internet began as a military communications project. GPS was built for precision weaponry before guiding your morning coffee run. And today, a new wave of technological transformation is unfolding within the defence sector—one that's reshaping everything from artificial intelligence to autonomous systems. Enter the Global X Defence Tech ETF $SHLD ( ▲ 2.99% ) , a specialised vehicle positioning investors at the intersection of national security and cutting-edge innovation.

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What is SHLD?

Launched in 2023, SHLD provides targeted exposure to around 50 pure-play defence technology companies across both developed and emerging markets. Unlike broad industrial ETFs that treat defence as a secondary focus, SHLD prioritises defence—tracking the Global X Defence Tech Index with exceptional precision. The portfolio includes traditional aerospace giants, cybersecurity specialists, AI integrators, and next-generation drone manufacturers. Think of it as your gateway to the companies that are shaping the security landscape of tomorrow.

SHLD: Defence Tech ETF — Pure-Play Security Portfolio

Let’s address the elephant in the room: defence was a standout sector in 2025, with several defence-focused ETFs delivering impressive returns amid increased global tensions. However, past performance does not guarantee future success; the focus should be on structural demand drivers.

Defence spending follows a different rhythm than consumer markets. While retail sales fluctuate with economic confidence, military budgets are driven by strategic needs, such as deterrence and technological gaps. When inflation impacts household budgets, governments typically accelerate, rather than cut, defence spending. This counter-cyclical nature makes defence a valuable portfolio diversifier during tough times for consumer sectors.

SHLD's holdings reflect this evolution beyond traditional "big iron." Yes, you'll find Lockheed Martin (8.2%) and RTX (7.5%) anchoring the portfolio—companies building fifth-generation aircraft and missile systems. But look deeper: Rheinmetall (7.2%) pioneers autonomous ground vehicles; Palantir (6.7%) applies AI to battlefield decision-making; and numerous smaller positions focus on satellite communications, electronic warfare, and cyber defence.

Defence: Software Over Steel

Global defence budgets are shifting significantly. NATO members are striving to meet their 2% GDP commitment, while European nations rebuild arsenals depleted by support for Ukraine. Indo-Pacific allies are rapidly modernising their military capabilities. The Congressional Budget Office predicts a 22% year-over-year increase in U.S. defence spending for weapons procurement in fiscal 2026. With $3.6 trillion in global defence expenditures creating consistent demand, companies involved in this sector deserve investor attention, regardless of future peace or conflict.

Investment Strategy📊

Before you rush to allocate 20% of your portfolio to defence tech, let's discuss thoughtful implementation. SHLD isn't a core holding—it's a tactical satellite position designed for specific purposes:

• 🛰️Thematic Satellite Approach (Recommended): Allocate 3–7% of your equity portfolio to SHLD within a broader thematic sleeve. Pair it with complementary themes such as cybersecurity, space infrastructure, or industrial automation. This creates a "technological sovereignty" mini-portfolio reflecting nations' push for supply chain resilience and strategic autonomy.

• ⚖️Defensive Diversifier: During late-cycle economic environments, when consumer discretionary stocks weaken, consider a 5% SHLD position to offset cyclicality. Its government-contract revenue model provides visibility into earnings when corporate spending freezes. Rebalance annually—this isn't a "set and forget" holding.

• 🌍Geopolitical Hedge: If your portfolio lacks exposure to non-U.S. defence contractors (BAE Systems, Thales, Rheinmetall represent meaningful SHLD weights), this ETF provides instant global diversification within the theme. European defence budgets are projected to grow at high single-digit to low double-digit rates in 2026, favouring local contractors.

💡Critical reminder: SHLD has a 0.50% expense ratio—reasonable for a specialised thematic ETF but higher than that of broad-market funds. Ensure the strategic rationale justifies the cost. Never let a compelling narrative override portfolio discipline.

SHLD at a glance

ETF Issuer: Global X

Inception: 2023-09-11

Asset Class: Equity

Underlying Index: Global X Defense Tech Index

Geographical Focus: Global

Expense Ratio: 0.50% (as of last data point)

Dividend Yield: 0.47% (as of last data point)

Distribution Frequency: Semi-Annual

Historical Performance

Let's be transparent about performance. SHLD delivered strong returns in 2024–2025 as global defence sentiment improved.

However, thematic ETFs experience volatility—sharp rallies followed by consolidation periods when geopolitical headlines fade. SHLD's trajectory will depend less on daily news cycles and more on three structural factors:

1. Budget execution: Will approved defence budgets actually convert to contractor orders?

2. Technology adoption curves: How quickly will AI, autonomy, and directed-energy weapons move from prototypes to fielded systems?

3. Geopolitical persistence: Will strategic competition remain elevated beyond election cycles?

SHLD Historical Performance (Since Inception)

www.tradingview.com/x/4rQQlODP

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

SHLD on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Structural Budget Growth, Not Cyclical Spikes: Global defence spending is not just rebounding; it is adjusting to a higher baseline. After years of cuts following the Cold War, countries now face urgent modernisation needs: replacing outdated platforms, addressing new threats, and ensuring domestic production amid supply chain vulnerabilities. This is not a temporary surge, but the start of a multi-year investment cycle.

2. Technology Inflexion Points: Defence is undergoing a rapid digital transformation. Technologies like AI for target recognition, autonomous drones for logistics, and quantum-resistant encryption are being implemented now, not just in science fiction. SHLD offers exposure to companies profiting from these developments before they become mainstream.

3. Global Exposure Beyond U.S. Contractors: While U.S. firms dominate defence news, SHLD has notable exposure in Europe and Asia, as non-U.S. defence budgets are growing faster. Companies like Rheinmetall, BAE Systems, and Thales will benefit from European rearmament, independent of U.S. policy changes. This geographic diversification is hard to replicate elsewhere.

Top 3 Reasons Not to Invest

1. Valuation Sensitivity at Current Levels: After a strong 2025, many defence contractors are trading at elevated multiples amid sustained budget growth. However, if execution disappoints—if budgets are approved but procurement is delayed—these multiples could compress sharply. Investing after a rally of over 70% requires acknowledging that you are paying for optimism.

2. Concentration Within a Concentrated ETF: SHLD has about 50 stocks, making it relatively concentrated for a thematic ETF, with the top 10 holdings comprising over half the portfolio. This concentration means your returns will largely depend on Lockheed, RTX, and General Dynamics, highlighting the importance of recognising this risk for true diversification.

3. Ethical Considerations and ESG Exclusions: Many ESG-focused investors exclude defence contractors entirely. If your investment philosophy incorporates concerns about weapons manufacturing, SHLD fundamentally conflicts with those values—regardless of financial merits. Portfolio construction must align with personal principles.

Defence After the Rally: Is SHLD Still a Buy in 2026?🤔

Viewing SHLD as an investment in national security infrastructure is more insightful than seeing it as a geopolitical bet. Like investments in transportation, energy, and digital infrastructure, defence technology is crucial for safeguarding economic activities.

While SHLD shouldn’t replace your core equity holdings or dominate your portfolio, it offers targeted exposure to companies benefiting from defence modernisation, with awareness of potential risks.

The defence sector's performance in 2025 was driven by actual budget changes and technological advancements. The trajectory for 2026 depends on effective execution, not headlines. As an investor, focus on positioning yourself thoughtfully for plausible scenarios rather than trying to predict geopolitical events.

SHLD: Investing in Security Infrastructure

If the perspective of viewing defence tech as critical infrastructure resonated with you, then a deeper dive awaits. The ETF UNO newsletter provides ongoing analysis and strategic context to help integrate thematic satellites thoughtfully into a broader portfolio. We deliver weekly research and direct team insights to help you build with conviction, not reaction. Subscribe to ensure your next investment decision is well-informed.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Happy weekend, ETF UNO family! Welcome back to our ETF 101 series, where we simplify investing concepts. Today, we’ll discuss using ETFs for retirement planning.

If you've ever wondered how investment vehicles can help you relax after retirement, you’re in the right place. Although retirement may seem far off when you start your career, beginning your planning early with the right tools can make your journey to that beach chair much smoother.

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👉Why ETFs Are Retirement's Best Friend

Let's start with the basics: Retirement investing isn't about chasing the hottest stock or predicting tomorrow's headlines. It's about building a system — one that grows with you, adapts over time, and provides dependable income when you eventually stop working.

The good news?

Thanks to the variety of ETFs available today, investors can create a retirement portfolio that is simple, diversified, low-cost, and flexible. Some ETFs are designed specifically for retirement, allowing you to set them up and let them grow over time, providing value when needed.

Building a Retirement System with ETFs

You might be asking, "Isn't retirement investing just regular investing for a longer time?" That's a great question! While they share similarities, retirement investing has unique features that set it apart.

• ⏳The Time Horizon Changes Everything: Retail investors often buy ETFs to save for a house down payment in five years or a child's education in ten years. In contrast, retirement planning typically involves a 20- to 40-year timeline, which significantly affects your ETF selection strategy.

• ⚖️Income Needs Shift Dramatically: While working, you're in accumulation mode, aiming to grow your ETFs. In retirement, you shift to distribution mode, requiring your investments to generate income and preserve capital, which calls for a different ETF strategy.

• 🛡️Risk Tolerance Evolves: Young investors can take on more risk because they have more time to recover from downturns. As retirement approaches, risk tolerance decreases, so ETF allocations should become more conservative.

• 💰Tax Efficiency Becomes Critical: In retirement, every dollar counts, as you rely on your savings. While ETFs are usually more tax-efficient than mutual funds, it's essential to consider whether to hold them in taxable accounts or tax-advantaged retirement accounts.

More Than Just Holding

🔄Adjusting Your ETF Strategy as Time Marches On

One of the key benefits of ETFs for retirement is their flexibility. Unlike some investment products that lock you into a strategy, ETFs allow you to adjust your approach as your life changes. Here’s how to adapt your ETF strategy through different life stages:

1. 🟢Aggressive Growth Phase (20s-40s): Focus on growth-oriented ETFs like broad market, sector, and international funds to build a strong foundation.

2. 🟡Balanced Transition Phase (40s-50s): Gradually shift to a mix of dividend and bond ETFs for both growth and stability.

3. 🟠Safety-First Preservation Phase (50s+): Prioritise protecting savings with high-quality bond, dividend, and low-volatility ETFs.

Adapting Your ETFs Through Life

Are Current ETF Trends Meaningful for Future Retirees?

The ETF landscape is evolving rapidly, and many of these developments are particularly relevant for retirement investors. Let's look at some key trends:

• Factor Investing ETFs: These ETFs target specific factors such as value, momentum, quality, or low volatility. For retirees, quality and low-volatility factors are especially beneficial for preserving capital while earning returns.

• ESG ETFs: The rise of sustainable investing isn't just a trend – it's becoming a fundamental consideration for long-term investors. For retirement investors with a long time horizon, this future-focused approach can be particularly valuable.

• Active ETFs: Active ETFs are growing in popularity. These combine the transparency and tax efficiency of ETFs with the potential benefits of active management. For retirees seeking income or specific market exposures, active ETFs can offer unique opportunities.

• Thematic ETFs: From artificial intelligence to clean energy, thematic ETFs allow investors to participate in long-term structural trends. For retirement portfolios with a decades-long horizon, these can provide exposure to the innovations that will shape our future.

🏖️Retire Smarter with ETFs

As we wrap up today's exploration of ETFs for retirement, let's recap the key points:

• ETFs offer valuable benefits for retirement planning, including diversification, low costs, and flexibility.

• Retirement investing is distinct due to its long time horizon, changing income needs, evolving risk tolerance, and the importance of tax efficiency.

• As you move from accumulation to preservation, your ETF strategy should become more conservative and income-focused.

• Current trends like factor investing, ESG criteria, active management, and thematic options provide powerful tools for retirement investors.

Retirement planning is about building sustainable wealth over time, not getting rich quickly. ETFs are ideal for this, offering long-term market growth, disciplined investing, and diversification.

The key is to start now. Whether you're 25 or 55, beginning your retirement portfolio with ETFs today means that even small, consistent contributions can grow into something significant.

We hope you enjoyed this edition of our ETF101 series! Retirement investing can be empowering and exciting with the right approach.

Enjoy the weekend readings!

If you found this article helpful and want to learn more about ETFs in a friendly way, join the ETF UNO newsletter. We aim to make ETF investing simple and enjoyable for everyone. Let's embark on this journey toward financial empowerment together!

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.

Hello, ETF UNO friends! Today, we’re looking east across the Atlantic to explore one of the most efficient ways to gain exposure to Europe’s diverse markets. Whether you’re an experienced ETF investor or just starting to diversify beyond U.S. borders, the Vanguard FTSE Europe ETF $VGK ( ▼ 0.71% ) presents a compelling opportunity that deserves our attention. What drives this European powerhouse, and why could it be the missing piece in your global investment strategy? Let’s break it down the ETF UNO way: simple, practical, and just a little entertaining.

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What is VGK?

When investing in Europe, we often think of London’s finance, Paris’s luxury, Swiss engineering, and Germany’s industry. VGK offers a low-cost way to tap into this diverse landscape. Since its launch in March 2005, VGK has become the go-to ETF for investors seeking broad exposure to European equities without the hassle of picking individual stocks or targeting specific countries.

VGK stands out in the ETF market due to its remarkable efficiency, featuring an expense ratio of just 0.06%. This makes it one of the most affordable ways to access European markets, offering diversification across over 1,000 individual securities that would be costly to replicate through individual stock purchases.

VGK: Low-Cost, Diversified Access to European Equities

VGK aims to replicate the FTSE Developed Europe All Cap Index, which includes large-, mid-, and small-cap companies across major developed European markets. By holding each security in proportion to its market weight, VGK minimises tracking error, ensuring investors receive the true market return of European equities, minus a low expense ratio. Additionally, VGK provides excellent diversification by spreading risk across various sectors, geographies, and company sizes.

VGK provides exposure to major European economies, including the UK, France, Switzerland, Germany, and the Netherlands. Notably, its top 10 holdings account for less than 20% of total assets, well below the average of similar funds. This low concentration ratio reflects VGK's strong diversification, reducing the risk that any single company will significantly impact your overall returns.

VGK: European Full-Replication with Deep Diversification

• 🌍Broad exposure across developed Europe

• 🧪Full-replication approach (a purist’s method)

• 🧩Over 1,000 holdings = real diversification

You’re not only buying the famous names, but you’re also getting broader industrial supply chains, mid-caps, and smaller firms powering the European economy.

Investment Strategy📊

VGK is a tool that the smartest investors use intentionally. Here are several practical ways ETF UNO readers can implement it in their ETF portfolio:

• 🌐Global Core Satellite Strategy: For investors looking to implement VGK in their portfolios, the most straightforward application is as a core satellite holding within a globally diversified equity portfolio.

• 🔷Simplified Three-Fund Blueprint: Investors using a three-fund portfolio can include VGK as the international equity component alongside a U.S. total market ETF and a bond ETF. A typical allocation is 60% U.S. stocks, 20% international stocks (via VGK), and 20% bonds. However, given current valuation discounts in Europe, some investors may increase their VGK allocation to 25-30%.

• 🔺Complete International Triad: Sophisticated investors might pair VGK, which covers developed Europe, with ETFs for Asian developed markets and emerging markets to gain comprehensive international exposure. This approach prevents overexposure to any one region while capturing global growth opportunities.

• 💱Natural Currency Hedge Advantage: VGK offers a way to diversify currency exposure. While it’s U.S. dollar-denominated, its holdings earn revenue in euros, Swiss francs, British pounds, and other European currencies. This provides a hedge against dollar weakness without the complexities and higher fees of currency-hedged ETFs.

VGK at a glance

ETF Issuer: Vanguard

Inception: 2005-03-04

Asset Class: Equity

Underlying Index: FTSE Developed Europe All Cap Index

Geographical Focus: Europe

Expense Ratio: 0.06% (as of last data point)

Dividend Yield: 2.77% (as of last data point)

Distribution Frequency: Quarterly

Historical Performance

No analysis of VGK is complete without examining its historical performance. Like other regional equity investments, VGK has experienced notable volatility over its nearly two-decade history, influenced by Europe's economic cycles and geopolitical challenges.

Looking at recent performance data, VGK delivered impressive returns in the recovery period following the pandemic-induced market crash. The ETF achieved a remarkable 36% return over the past year. This strong performance demonstrates Europe's resilience and the potential for catch-up growth when valuations are attractive.

Over longer time horizons, VGK's performance tells a more nuanced story. The ten-year annualised return of 8.8% provides perspective on the fund's ability to generate consistent returns despite Europe's economic challenges over the past decade, including Brexit, banking sector stresses, and energy crises.

It's important to note that European companies tend to have higher dividend payout ratios than their U.S. counterparts, making the total return picture more attractive when dividends are reinvested.

VGK Historical Performance (5Y)

www.tradingview.com/x/RkBi9o41

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

VGK on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Ultra-Low Cost Access to European Markets: VGK has an expense ratio of just 0.06%, significantly lower than the category average of 1.04%, making it a cost-effective way to invest in European equities. Over time, a 1% fee difference on a $10,000 investment can result in thousands of dollars in lost returns over 20 years. Vanguard's scale and indexing expertise allow it to pass these savings on to investors.

2. Exceptional Diversification in a Single Ticker: VGK features over 1,200 holdings across various countries and sectors, providing instant diversification that's hard to match with individual stock purchases. Its low concentration ratio prevents any single company or industry from dominating your European exposure, helping to reduce specific risks while capturing overall growth in European economies.

3. Exposure to Europe's Economic Transformation: European markets are trading at notable discounts compared to U.S. equities, offering potential value opportunities. Many companies in Europe lead in high-growth industries like renewable energy, luxury goods, pharmaceuticals, and industrial automation. Investing in VGK allows you to tap into these growth trends while benefiting from Europe's strong regulatory framework and commitment to sustainability.

Top 3 Reasons Not to Invest

1. Europe's Structural Growth Challenges: European economies are facing significant challenges, including ageing populations and slower productivity growth compared to the U.S. and some Asian markets. These factors may limit long-term growth and lead to underperformance against other developed markets. Consequently, investors should anticipate lower returns than those of U.S. equities over the next decade.

2. Geopolitical and Regulatory Uncertainty: Europe faces significant challenges, including the fallout from Brexit, tensions with Russia, immigration pressures, and evolving EU regulations. These uncertainties can create volatility and negatively impact corporate profitability. For example, energy price shocks after Russia's invasion of Ukraine and regulatory hurdles in technology and finance illustrate these challenges, leading to periods of underperformance that can test investor patience.

3. Concentration in Traditional Industries: VGK is well-diversified but heavily invested in traditional sectors such as financials, consumer staples, and industrials, with less exposure to high-growth technology companies than U.S. indices. This reflects Europe's economic structure but may lead to underperformance during tech-driven bull markets, making VGK less appealing to growth-focused investors than U.S.-focused ETFs.

🛡️VGK: Your European Gateway Awaits

The Vanguard FTSE Europe ETF provides a cost-effective way for investors to access Europe’s developed markets. With an expense ratio of only 0.06% and coverage of over 1,200 companies, VGK offers market returns efficiently.

While Europe faces genuine challenges that warrant careful consideration, the region also offers compelling opportunities for long-term investors. Valuation discounts, strong dividend yields, leadership in sustainable industries, and natural currency diversification make a strong case for strategic allocation to European equities through VGK.

For ETF investors, the key takeaway is that global diversification remains essential for building resilient portfolios. VGK isn't about betting on Europe's outperformance tomorrow; it's about participating in Europe's economic journey over the next decade while reducing your portfolio's dependence on any single region's success.

VGK: Europe's Long-Term Case for Diversification

Patience and discipline often yield better results than timing and speculation. View VGK as a core holding for steady exposure to Europe's economic potential, allowing you to focus on your life and financial goals.

Join the ETF UNO community, where we share knowledge and support each other in building better portfolios. Whether you’re a seasoned investor or new to ETFs, there’s a place for you here.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Hello, fellow ETF enthusiasts! Welcome to another edition of ETF UNO, where we simplify the world of ETFs and help you build smarter, more resilient portfolios. Today, we will explore one of the most intriguing sectors of the market—real estate—by examining the iShares U.S. Real Estate ETF $IYR ( ▼ 1.16% ) . Whether you are a seasoned investor or just starting your ETF journey, understanding how real estate can enhance your portfolio is essential in today's economic landscape. Let’s take a closer look at why this ETF is worth your attention.

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What is IYR?

IYR is one of the earliest real estate ETFs in the U.S. market, designed with precision and purpose. This fund aims to track the investment results of the Dow Jones U.S. Real Estate Capped Index (USD), providing investors with exposure to a concentrated yet diversified portfolio of approximately 60 to 70 U.S. real estate companies and REITs (Real Estate Investment Trusts). As of early January 2026, IYR has nearly $4.1 billion in net assets, making it a significant player in the real estate ETF space.

Real estate offers a unique combination of growth and income potential that sophisticated investors often seek. Unlike bonds, which provide fixed income, or growth stocks that focus solely on capital appreciation, real estate investments—especially through Real Estate Investment Trusts (REITs)—can offer both benefits. The real estate sector's distinctive role in the economy allows it to appreciate in value during inflationary periods while also generating steady rental income. This dual nature makes real estate an excellent hedge against inflation and a valuable diversification tool in a well-constructed investment portfolio.

Real Estate's Advantages

The share of REITs in IYR is significant; as essential tools in the real estate industry, REITs offer structural advantages that enhance both income and tax efficiency.

• 📈Mandatory High Dividend Yield: REITs are required to distribute at least 90% of taxable income to shareholders as dividends. This creates a strong, reliable income stream that typical real estate stocks often do not provide.

• 🔄Consistent Income Focus: This structure prioritises consistent dividend payments. In contrast, traditional real estate companies may reinvest profits in the business for growth rather than distribute them.

• 🛡️Tax-Advantaged Efficiency: REITs operate as pass-through entities. By meeting their distribution requirements, they generally avoid corporate income tax, making them a potentially more efficient vehicle for generating investor income than traditional real estate stocks.

The Structural Edge of REITs: Income & Tax Efficiency

Investment Strategy📊

To strategically include IYR in your ETF portfolio, consider your investment goals, risk tolerance, and current asset allocation.

• 🧱Conservative Core for Income: For conservative investors seeking stable income, IYR can enhance bond allocations by offering higher yields and inflation protection. Consider allocating 5-10% of your portfolio to IYR as part of an income-focused strategy alongside dividend-growth ETFs and Treasury securities.

• 🧩Moderate Diversification Tool: Investors can use IYR alongside broad market ETFs to diversify their portfolios. A 3-7% allocation to IYR offers exposure to real estate's unique risk-return profile while maintaining balance. View IYR as a component of a broader investment strategy rather than a standalone option.

• 🚀Growth Complement: IYR can be paired with sector-specific ETFs in technology, healthcare, and consumer discretionary to create a dynamic portfolio that captures multiple economic cycles. However, even growth-oriented investors should limit real estate exposure to no more than 15% of their total portfolio to avoid sector concentration risk.

• 🎯Tactical Allocation Leverage: A tactical approach might involve increasing IYR allocation during rising inflation or when interest rates peak, as real estate tends to perform well then. Conversely, consider reducing exposure during aggressive Federal Reserve tightening.

The beauty of ETFs like IYR is their flexibility—you can easily adjust your allocation as market conditions change without the transaction costs and complexity of buying individual real estate stocks or properties.

IYR at a glance

ETF Issuer: iShares

Inception: 2000-06-12

Asset Class: Real Estate

Underlying Index: Dow Jones U.S. Real Estate Capped Index (USD)

Geographical Focus: U.S.

Expense Ratio: 0.38% (as of last data point)

Dividend Yield: 2.46% (as of last data point)

Distribution Frequency: Quarterly

Historical Performance

Let's examine IYR's track record to understand its historical performance patterns. Over the past year, IYR has generated a solid 3.38% return, demonstrating resilience in changing market conditions.

The long-term performance tells an even more compelling story. IYR has achieved an annualised return of 8.25% since inception, demonstrating steady growth despite market volatility.

Income investors will appreciate IYR's dividend profile. The ETF's yield has been relatively stable, indicating consistent income generation capability.

IYR's performance is often cyclical, influenced by interest rates and economic conditions. It saw significant volatility during the 2020 pandemic but rebounded strongly as the economy reopened. This pattern emphasises the need for a long-term perspective when investing in real estate ETFs.

IYR Historical Performance (5Y)

www.tradingview.com/x/WPLW5ryv

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

IYR on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Diversified Real Estate Exposure with Concentration Benefits: IYR offers a strong balance of diversification and concentration with around 65 holdings, providing broad exposure across residential, commercial, industrial, and specialised real estate sectors. This structure helps investors benefit from real estate expertise while avoiding overexposure to any single property type or region.

2. Attractive Income Generation with Tax Efficiency: REIT dividends are often taxed more favourably than ordinary income, making them appealing for taxable accounts. The quarterly payments provide regular cash flow that can be reinvested or used as supplemental income. Real estate dividends can grow with property values and rental rates, helping to hedge against inflation. This income and growth potential make IYR attractive to retirees and income-focused investors seeking to preserve purchasing power.

3. Inflation Hedge and Portfolio Diversification Benefits: IYR's focus on U.S. real estate provides this inflation protection within a liquid, transparent ETF structure. The fund's low correlation with traditional stock and bond markets enhances portfolio diversification, potentially reducing overall volatility and improving risk-adjusted returns.

Top 3 Reasons Not to Invest

1. Interest Rate Sensitivity and Economic Cyclicality: Real estate investments, like IYR, are very sensitive to interest rate changes. Rising rates increase borrowing costs for property developers and REITs, which can reduce profit margins and property values. The sector is cyclical, performing well during economic expansions but struggling during recessions when vacancy rates rise and rental income drops.

2. Sector Concentration and Limited International Exposure: IYR provides strong exposure to U.S. real estate but lacks international diversification, which may limit growth opportunities in emerging markets. Its concentration in the sector also makes it vulnerable to downturns, such as the retail crisis and pandemic effects on office demand.

3. Dividend Tax Treatment and Income Volatility: REITs offer attractive dividend yields, but these dividends are typically taxed as ordinary income, resulting in higher tax bills for investors in higher brackets. Moreover, real estate dividends can be volatile, as REITs may cut distributions during economic downturns to preserve capital. Unlike more stable dividends from utilities or consumer staples, real estate dividends fluctuate based on property occupancy rates, maintenance costs, and financing conditions.

🏠IYR: Unlock Real Estate Wealth

The iShares U.S. Real Estate ETF (IYR) represents a sophisticated tool for investors seeking diversified exposure to America's real estate market. With its focus on the Dow Jones U.S. Real Estate Capped Index, low 0.38% expense ratio, and attractive 2.46% dividend yield, IYR offers a compelling combination of income generation, inflation protection, and portfolio diversification benefits.

However, like any investment, IYR comes with important considerations. Its sensitivity to interest rates, sector concentration, and exposure to economic cycles requires careful portfolio integration and risk management.

The fund works best as part of a diversified ETF portfolio rather than a standalone holding, with allocations typically ranging from 3-15% depending on individual risk profiles and investment objectives.

Building a Smarter Real Estate Allocation

As we navigate an increasingly complex investment landscape, having access to expert analysis and community insights becomes invaluable. That's why we invite you to join the ETF UNO community today! Whether you're building your first ETF portfolio or optimising an existing one, ETF UNO provides the tools and insights you need to succeed.

Remember: successful investing isn't about timing the market—it's about time in the market. By understanding funds like IYR and incorporating them strategically into your portfolio, you're taking important steps toward building lasting wealth that can weather any economic storm. Until next time, keep investing smartly!

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Our ETF 101 series is returning! In this series, we will clarify investment concepts. Previously, when we discussed ETF expenses, we uncovered the basics: expense ratios, hidden costs, and the idea that “cheap” doesn’t always equate to better. Today, we're going deeper—much deeper—into the hidden economics that most investors never see.

Consider this your exclusive insight into ETF expenses. We will examine how small fees can accumulate significantly over decades, why some ETFs have higher fees but offer greater value, and the hidden money-making strategies that fund companies employ behind the scenes.

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⚡Why Tiny Fees Deserve Big Attention

While most investors check expense ratios like they're comparing grocery prices, the real story happens over time. A 0.50% difference might seem trivial today, but over 30 years? It could cost you a down payment on a house—or fund your early retirement.

Let's start with something magical yet terrifying: compound math. Imagine two identical portfolios:

• Portfolio A: Pays 0.03% in fees (like some ultra-cheap index ETFs)

• Portfolio B: Pays 0.75% in fees (typical for some actively managed or niche ETFs)

Both earn 7% annual returns before fees. After 30 years:

• Portfolio A: $10,000 grows to $76,123

• Portfolio B: $10,000 grows to $57,435

That's a $18,688 difference from fees alone. But here's where it gets interesting—this math only tells half the story.

The High Cost of Small Fees

However, the key insight is that understanding advanced expense dynamics goes beyond merely avoiding fees. It's about recognising situations where paying more can actually yield greater profits. Astute investors focus not only on minimising costs but also on maximising value.

Sometimes, higher fees buy you something valuable:

• 🧾Better tax efficiency: some ETFs structure holdings to minimise capital gains distributions

• 🎯Superior tracking: closer alignment with the index benchmark

• 🗝️Access to unique strategies: like smart beta or factor investing

The key isn't avoiding fees—it's ensuring every basis point you pay delivers proportional value.

🎯Specialty ETFs: When Fees Tell a Different Story

Not all ETFs play by the same rules. Let's explore three categories where traditional fee analysis falls short:

📊Leveraged & Inverse ETFs

These complex instruments use derivatives to amplify returns or hedge against markets. Their expense ratios can seem shocking—1.00% or higher—but that's not the full picture.

Why do they charge more?

• Daily rebalancing creates constant trading costs

• Derivatives contracts have embedded fees

• Higher operational complexity

These ETFs aren't designed for long-term holding. Their compounding math works against you over time, making the expense ratio almost irrelevant compared to their structural decay. For these ETFs, understanding their mechanics matters more than their fees.

🌱Thematic & ESG ETFs

Interested in investing in clean energy, AI, or blockchain? These popular ETFs typically have expense ratios ranging from 0.60% to 0.80%, which are considerably higher than those of broad-market ETFs.

Why do they cost more?

• Research-intensive portfolio construction

• Smaller asset bases (no economies of scale)

• Marketing costs to attract niche investors

Ask yourself: "Am I paying for legitimate expertise, or just a marketing story?" Many thematic ETFs underperform their hype. The best ones have clear methodologies and proven track records—not just catchy names.

The High Price of Trendy ETFs

🏦Bond ETFs: The Hidden Yield Game

Bond ETFs often have higher expense ratios than stock ETFs (0.15-0.50% vs. 0.03-0.20%), which seems unfair since bonds are "boring." But there's method to this madness.

Many bond ETFs generate additional income through securities lending. This involves temporarily lending their bond holdings to short-sellers in exchange for a fee. This income can often cover most or all of the ETF's expenses.

When evaluating an ETF, it's important to consider its "net yield," which is the yield after fees, rather than focusing solely on the expense ratio. Interestingly, some high-fee bond ETFs may deliver better net income than their lower-cost counterparts.

🕵️‍♂️The Hidden Costs Nobody Talks About

Beyond the expense ratio, three subtle costs quietly erode returns:

1. Portfolio Turnover Costs: When an ETF buys or sells securities, it incurs costs such as bid-ask spreads, market impact, and commissions, which are not included in the expense ratio but are part of the tracking difference. Thus, an ETF with a 0.10% expense ratio and high turnover can be more expensive than a 0.20% ETF with low trading activity.

2. Cash Drag: ETFs holding cash for redemptions or dividends earn minimal returns while charging full fees. This isn't a big issue in high-interest environments, but in low-rate conditions, it can be significant. For example, a 2% cash position might yield only 0.5% while costing 0.20% in fees, resulting in a net loss.

3. Index Rebalancing Tax Drag: Some indices rebalance frequently, causing ETFs to sell winners and buy losers, which creates taxable gains. This "tax drag" can result in an annual loss of 0.30-0.50% on compounding, in addition to the expense ratio.

Be cautious when ETFs advertise temporary fee waivers to attract investors. These rates often expire after a few years or when the fund reaches a certain size, leading to unexpected cost increases. Always consider the fund's permanent "gross expense ratio" to understand the true long-term costs.

Beware the Fee Waiver Trap

🛡️Becoming an Expense Ninja

Great investors shift their mindset: view ETF fees not as costs to minimise, but as strategic investments in your outcomes.

Sometimes, paying 0.50% for an ETF that perfectly executes your strategy beats paying 0.03% for one that doesn't. The goal isn't the cheapest ETF—it's the ETF that delivers the best risk-adjusted returns for your specific goals.

We've journeyed beyond basic expense ratios into the hidden economics that shape your long-term returns. You've learned:

• How tiny fees compound into massive differences over time

• Why speciality ETFs have unique cost structures worth understanding

• The hidden costs that lurk beyond the expense ratio and fee waivers

The true power of ETF investing isn't just access to markets—it's understanding exactly what you're paying for and why. When you master expense dynamics, you transform from a passive investor into an active architect of your financial future.

This week, select one ETF from your portfolio and conduct a detailed analysis of its expenses. You might be surprised by what you find.

Enjoy the weekend readings!

Until next time, invest wisely, think critically, and remember: in the world of ETFs, knowledge is not just power; it's profit.

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.

Hello ETF UNO readers. As global markets evolve and the distinction between developed and emerging markets blurs, investors are reconsidering how to access growth beyond the traditional boundaries of the U.S. and Europe.

Today, we focus on the Capital Group New Geography Equity ETF (CGNG). Launched in June 2024, this actively managed equity ETF aims to capitalise on growth opportunities in developing economies while effectively managing the volatility that has historically affected this asset class.

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What is CGNG?

Traditional emerging markets ETFs have long promised high growth potential but often delivered high volatility and disappointing risk-adjusted returns. CGNG seeks to change this narrative by pursuing superior, long-term, risk-adjusted results through broad exposure to developing-country opportunities. The fund's strategy is elegantly simple yet sophisticated: it invests primarily in common stocks of companies with significant exposure to developing countries and markets.

The CGNG strategy is notable for its unique dual approach to capturing growth in emerging markets. Here’s what makes it compelling:

• ✔Dual Investment Approach: CGNG invests not only in companies based in emerging markets but also in multinational companies with significant operations in these developing countries.

• 🌍Twofold Exposure to Growth: Investors gain access to local champions (leading companies in emerging markets) as well as global giants (multinationals benefiting from high-growth regions).

• 📈Long-Term Investor Benefits: The fund aims to deliver returns characteristic of emerging markets while maintaining the volatility typical of developed markets—making it ideal for investors looking for growth without extreme fluctuations.

This innovative strategy offers a smoother path to capturing the potential of emerging economies.

🌍CGNG: Two Routes to One Goal📈

The foundation of this strategy is Capital Group's renowned research team, which has decades of experience in navigating global markets. This actively managed fund leverages Capital Group's high-quality research capabilities and proven investment process, providing individual investors with access to professional management within an ETF structure.

Capital Group: The Research-Driven Active ETF Strategy

Investment Strategy📊

For ETF UNO readers looking to incorporate CGNG into their portfolios, there are several strategic approaches to consider:

• 🔗Core-Satellite Approach: CGNG can serve as a key component in emerging markets, providing an alternative to traditional passive ETFs. Its active management makes it suitable for a 5-10% allocation in a diversified global equity portfolio for investors seeking emerging market exposure.

• 🛡️Volatility Reduction Strategy: For investors seeking to reduce volatility in traditional emerging markets, CGNG offers a solid alternative. Investing in local companies and multinationals with emerging market exposure provides diversification that can stabilise returns. Consider replacing 50-100% of your current emerging market allocation with CGNG to reduce volatility while maintaining growth potential.

• ⚡Growth Enhancement Tactic: By pairing CGNG with a developed markets ETF, investors can unlock greater global exposure and significantly boost growth potential, making this combination a powerful choice for aggressive, growth-oriented portfolios.

• 🧱Dollar-Cost Averaging Implementation: Launched in June 2024, CGNG offers a great opportunity for dollar-cost averaging. Start with a small position (1-2% of your portfolio) and gradually increase it over 12-18 months to manage entry point risk while benefiting from this innovative strategy.

CGNG at a glance

ETF Issuer: Capital Group

Inception: 2024-06-25

Asset Class: Equities

Underlying Index: CGNG is an active ETF

Geographical Focus: Global

Expense Ratio: 0.64% (as of last data point)

Dividend Yield: 0.66% (as of last data point)

Distribution Frequency: Annual

Historical Performance

While CGNG is a relatively new ETF, its early performance metrics are worth examining. As of December 2025, the fund has delivered an impressive >25% year-to-date return.

What's particularly encouraging is the fund's ability to capture upside while limiting downside. With approximately $1.3 billion in assets under management and more than 200 holdings, CGNG has attracted significant investor interest since its launch, suggesting confidence in Capital Group's approach.

CGNG Historical Performance (Since Inception)

www.tradingview.com/x/ezuPPAhP

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

CGNG on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Institutional-Quality Active Management at ETF Prices: CGNG harnesses Capital Group's esteemed institutional research for ETFs. Unlike passive emerging market ETFs that just track indexes, CGNG employs experienced portfolio managers who use fundamental and quantitative analysis to find undervalued opportunities and avoid troubled markets. This active approach is particularly effective in emerging markets, where inefficiencies can create value.

2. Diversified Exposure to Emerging Market Growth: The fund's innovative strategy provides exposure to emerging market growth through various channels. Key holdings include Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), Tencent Holdings, and even Microsoft. This approach captures growth from both local leaders and global firms, creating a more resilient portfolio that isn't reliant on any one market.

3. Volatility Management Through Strategic Diversification: Traditional emerging markets ETFs often struggle with concentration risk and political volatility. CGNG mitigates these issues by including multinational companies with exposure to emerging markets, offering diversification. These global firms typically demonstrate better governance and risk management than pure-play emerging market companies. Consequently, CGNG can deliver emerging market-like returns with lower volatility, benefiting long-term investors.

Top 3 Reasons Not to Invest

1. Limited Track Record and New Strategy: Launched in 2024, CGNG lacks sufficient historical data to evaluate its long-term performance and risk management. While early results appear promising, investors should be cautious about relying on short-term performance. The strategy of combining local emerging market companies with multinationals is relatively untested in an ETF format, creating uncertainty about its performance in various market cycles.

2. Higher Expense Ratio Than Passive Alternatives: CGNG's expense ratio is much higher than that of passive emerging markets ETFs. While active management can justify higher fees, investors should assess if the potential performance benefits outweigh the extra costs over time. For cost-conscious investors, this premium may be hard to justify without a longer performance history.

3. Active Management Risks and Style Drift: As an actively managed fund, CGNG relies on the Capital Group investment team for decision-making, which can sometimes lead to style drift and increased risk. With a turnover rate of nearly 50%, the high trading activity may result in higher transaction costs and tax inefficiencies compared to passive strategies. Investors need to trust that the managers will maintain their discipline during market fluctuations.

🧭CGNG: Where Global Growth Really Happens

CGNG represents a thoughtful evolution in emerging markets investing. By combining exposure to local emerging market companies with multinational corporations that benefit from these high-growth regions, CGNG aims to deliver the best of both worlds: emerging market growth potential with developed market stability.

CGNG offers ETF investors several benefits, including institutional-quality active management and strategic diversification that reduces volatility. However, it has a limited track record, higher fees than passive alternatives, and inherent uncertainties of active management.

CGNG works well as a strategic satellite holding in a diversified portfolio, particularly for those hesitant to invest in emerging markets due to volatility concerns. Start with a modest allocation and monitor its performance against traditional emerging market and global benchmarks.

Weighing the Pros and Cons of the CGNG Strategy

Are you ready to elevate your ETF investing? Join the ETF UNO community for exclusive insights, portfolio strategies, and expert analysis that can help you build wealth. Subscribe to our weekly newsletter for actionable ETF strategies and market insights. Let’s navigate the world of ETFs together! This is ETF UNO—your trusted guide to the ETF universe.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

As we approach the final days of 2025, the ETF UNO team would like to extend our warmest holiday wishes to all our readers and fellow investors. Thank you for being a part of our journey this year. While the markets never rest, this season serves as a reminder to pause, reflect, and appreciate the valuable lessons—both rewarding and humbling—that investing teaches us.

The year 2025 has been far from dull. While 2024 centred on momentum and enthusiasm, 2025 has emphasised rotation, realism, and risk management. The impressive returns of gold and silver, along with the resilience of defensive bond strategies, have shown that strategic ETF allocation is one of the most effective ways to build wealth in modern portfolios.

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A Year of Rotation: “What’s Hot” to “What Holds Value”

In 2025, the main theme was rotation. Investors shifted from speculative growth stocks to assets with tangible value, income, or defensive traits. ETFs showcased their adaptability, allowing quick responses to changing macroeconomic conditions.

Here are the key storylines that influenced ETF flows and investor sentiment this year:

🥇Precious Metals Shine: Gold and Silver Steal the Spotlight

If there were an award for "Most Consistent Winner" in 2025, precious metals ETFs would definitely win it. Silver stole the spotlight in 2025 with a 132% surge, leaving gold behind as supply shortages, green demand, and massive ETF inflows reshaped the metals market.

• Why metals worked in 2025: Metals gained resilience as an asset class due to ongoing geopolitical uncertainty and central banks' efforts to stabilise holdings. Persistent inflation concerns and a focus on tangible real assets further fuelled this demand. Gold ETFs provided strong, steady returns, while silver ETFs benefited from both safe-haven demand and critical industrial uses in the energy transition and electronics sectors.

• Key takeaway: Gold and silver reminded investors that in uncertain environments, old-school hedges still matter—and ETFs remain the easiest way to access them.

❄️Crypto’s Coldest Year: Massive Outflows from Crypto ETFs

Following the excitement surrounding spot crypto ETFs in previous years, 2025 brought a harsh reality check for digital assets.

• What went wrong: In 2025, the cryptocurrency market faced significant challenges, leading to underperformance. Prolonged price declines eroded investor confidence. Cryptocurrencies struggled to compete with low-risk yields from cash and Treasuries, leading to sustained outflows from crypto-focused ETFs and reversing earlier optimism.

• Key takeaway: Crypto ETFs remain innovative—but 2025 proved they are high-beta instruments, best suited for investors who truly understand volatility.

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🏦The Comeback of Cash & Bonds: Income Is Cool Again

One of the most underestimated stories of 2025 was the revival of fixed-income ETFs.

• Why bonds came back: Bond ETFs achieved a 20% growth in assets, the highest among all investment vehicles, as investors sought stability amid equity market turbulence. Defensive assets proved valuable during equity declines, underscoring their role in portfolio construction. Throughout the year, short-duration Treasury ETFs, ultra-short bond ETFs, and dividend-focused strategies attracted significant inflows.

• Key takeaway: After years in the shadow of equities, income ETFs reclaimed relevance, especially for conservative and retirement-focused investors.

🤖AI Grows Up: From Hype to Infrastructure

Artificial intelligence didn’t disappear in 2025; instead, it matured.

• Why AI ETFs evolved beyond simple hype: ETF investors have shifted their focus from chasing headline-grabbing applications to investing in sectors such as semiconductors, data centers, cloud infrastructure, and power and cooling solutions. While broad tech ETFs continued to perform, their returns have become more selective compared to previous years.

• Key takeaway: AI remains a long-term megatrend—but 2025 showed that infrastructure often wins after hype fades.

✨Active ETFs Take Centre Stage: 2025 Marks a Breakout Year

In 2025, while passive ETFs remained essential, actively managed ETFs saw a surge in investor demand due to increasing market complexity and greater dispersion across sectors, styles, and regions.

• What fueled the boom: The growth of active ETFs in 2025 was driven by rising macroeconomic uncertainty, which led investors to seek more flexible, risk-controlled options. Skilled portfolio managers added value through effective duration management, careful security selection, and tactical asset allocation. This combination of ETF transparency and mutual fund expertise attracted significant inflows.

• Key takeaway: In 2025, a structural shift occurred—ETFs are no longer just passive tools. Active management has discovered its most efficient vehicle, and investors are embracing this change.

ETF Investor Lessons from 2025📚

Looking back, 2025 delivered a few timeless investing reminders:

• 🔄Rotation matters more than prediction

• 🛡️Diversification beats conviction during uncertainty

• 💰Income is powerful when growth slows

• 🧩ETFs shine when flexibility is needed most

ETF Investor Lessons from 2025

Cheers to the Year Ahead🥂

As this remarkable year comes to a close, it's clear that ETFs are the most adaptable tool in investing. They allow investors to respond thoughtfully to changes in metals, cryptocurrency, income, and global markets.

On behalf of ETF UNO, thank you for reading, learning, and investing with us this year. We wish you and your loved ones a joyful holiday season and a prosperous start to 2026.

We appreciate your trust in us as your ETF investment partner throughout 2025. Here's to another successful year in ETF investing! 🎉

Reflecting on 2025, Looking to 2026🎉

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

In recent years, the investment landscape has shown that inflation can quietly erode purchasing power. One year, your grocery bill may feel manageable, but the next year it could be 15% higher. For long-term investors, this gradual increase can be just as damaging as a market downturn. That's where inflation-protected assets come into play.

We will examine the Vanguard Total Inflation-Protected Securities ETF (VTP), designed to protect investors from unexpected inflation while providing stability through U.S. government-backed securities. This article will outline how VTP works, its purpose, and its role in a diversified ETF portfolio.

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What is VTP?

VTP aims to track the performance of the ICE U.S. Treasury Inflation Linked Bond Index, which measures the performance of U.S. dollar-denominated sovereign debt issued in the U.S. domestic market, commonly known as TIPS (Treasury Inflation-Protected Securities).

TIPS are indexed to inflation. As inflation rises:

• The bond's principal value increases.

• Interest payments, based on that principal, also rise accordingly.

When inflation decreases, the principal can adjust downward; however, investors are guaranteed to receive at least the original principal at maturity, assuming there is no default, which is highly unlikely with U.S. Treasuries.

VTP: A TIPS Fund for Inflation Protection

VTP stands out from shorter-duration TIPS funds due to its comprehensive exposure across the entire yield curve. It invests in TIPS with at least one year until maturity and a minimum face value of $300 million, offering robust market coverage. With an average duration of 6.5 years and an average maturity of 7.2 years, VTP carries greater interest rate risk but also presents the potential for higher total returns. This makes it ideal for long-term investors who can handle short-term volatility for more effective inflation protection.

VTP: A Long-Duration TIPS Fund for Higher Returns

Investment Strategy📊

VTP isn’t designed to replace your entire bond allocation — and it’s certainly not a substitute for equities. Instead, it plays a specific supporting role within a well-constructed ETF portfolio. For ETF investors building diversified portfolios, consider these implementation approaches:

• 🛡️Core Inflation Hedge: For most long-term investors, allocating 5-10% of fixed-income holdings to VTP provides substantial protection against inflation without being overly sensitive to interest-rate changes. This strategy is especially effective when combined with nominal Treasury ETFs, as it creates a balanced bond allocation that protects against both inflation and deflation.

• 🔒Retirement Income Foundation: Investors nearing or in retirement should consider VTP as a key part of their income portfolio. TIPS provide real returns above inflation, ensuring future purchasing power—a vital consideration when withdrawing funds. Combining VTP with dividend growth stocks and short-term Treasuries can create an effective strategy for maintaining purchasing power during retirement.

• ♟️Tactical Inflation Overlay: For experienced investors, VTP can act as a tactical hedge during rising inflation expectations. When breakeven inflation rates are low relative to historical averages, increasing the VTP allocation can help protect against unexpected inflation spikes.

• 🌐Complete Portfolio Solution: Advanced ETF portfolios may incorporate VTP as part of a "permanent portfolio" strategy, alongside gold, stocks, and cash. This approach aims to perform well in various economic conditions, with VTP specifically protecting against inflation, which typically harms conventional bonds and cash holdings.

VTP at a glance

ETF Issuer: Vanguard

Inception: 2025-07-07

Asset Class: Fixed-Income

Underlying Index: ICE U.S. Treasury Inflation Linked Bond Index

Geographical Focus: U.S.

Expense Ratio: 0.05% (as of last data point)

Dividend Yield: 1.56% (as of last data point)

Distribution Frequency: Quarterly

Historical Performance

VTP serves its purpose by closely aligning with inflation while carrying interest rate risk. It has historically performed well during inflationary periods, preserving real value and offering better inflation-adjusted returns than nominal bonds or cash. However, its longer duration means it can temporarily decline when real interest rates rise rapidly. Therefore, it’s best to assess VTP over multiple years, focusing on its inflation-adjusted returns, and to consider it within a diversified portfolio. Patience is key with this fund.

VTP Historical Performance (Since Inception)

www.tradingview.com/x/8y9LNXbG

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

VTP on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Authentic Inflation Protection: VTP’s underlying TIPS adjust their principal value based on changes in the Consumer Price Index (CPI), ensuring your investment keeps pace with inflation and preserves purchasing power. In an era of higher inflation targets set by central banks globally, this protection is essential for long-term wealth preservation.

2. Full Market Exposure at Minimal Cost: VTP provides broad access to the U.S. Treasury Inflation-Protected Securities (TIPS) market, capturing inflation protection across all durations and ensuring diversification. With Vanguard's low 0.05% expense ratio, VTP maximises inflation protection for each dollar invested—a key advantage in today's low-yield environment.

3. U.S. Government Backing: Every security in VTP's portfolio is backed by the U.S. government, meaning there is no credit risk. Unlike corporate inflation-linked bonds, the only risks with Treasury Inflation-Protected Securities (TIPS) are inflation and interest rate fluctuations. Thus, VTP offers one of the most effective forms of inflation protection for retail investors.

Top 3 Reasons Not to Invest

1. Interest Rate Sensitivity: With an average duration of 6.5 years, VTP is highly sensitive to interest rate changes. Rapid rate increases, like those in 2022, can lead to significant short-term volatility and drawdowns. Longer-maturity TIPS funds also carry these risks, making them difficult for risk-averse investors to hold. This volatility demands strong resolve and a long-term investment perspective.

2. Underperformance in Low-Inflation Environments: When inflation is low, or deflation occurs, Treasury Inflation-Protected Securities (TIPS) often underperform nominal Treasury bonds. Because TIPS offer lower coupon payments, serving as an "insurance premium" for inflation protection, this may not always be advantageous. Extended periods of low inflation can result in disappointingly low returns.

3. Limited Protection Against Short-Term Inflation Spikes: VTP provides strong long-term inflation protection but may not react quickly to sudden short-term inflation shocks. While CPI adjustments are monthly, market prices can overreact before these changes take effect. Additionally, VTP's longer duration might cause it to underperform shorter-duration TIPS funds during initial inflationary surges.

🔥Inflation-Proof Your Portfolio

The Vanguard Total Inflation-Protected Securities ETF (VTP) is an effective option for investors looking to preserve purchasing power over the long term. With complete exposure to U.S. Treasury inflation-protected securities and a low expense ratio of just 0.05%, VTP leverages Vanguard's expertise to provide strong inflation protection.

However, it's important to recognise that VTP isn't suitable for everyone. Its longer duration results in higher volatility, making it better suited to multi-year holds than to short-term trading.

Given that inflation has become a persistent concern, using a tool like VTP is essential for maintaining long-term purchasing power. While it can't solve all investment challenges, VTP effectively addresses the risk of declining money value due to rising prices.

VTP: A Long-Term Inflation Hedge for Purchasing Power

If you found this article insightful and would like more practical, balanced, investor-focused information on ETFs, we invite you to join the ETF UNO community. Subscribe, share, and continue building smarter ETF portfolios with us!

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Welcome back to ETF UNO, where we analyse the most interesting ETFs. Income investing has evolved from simply purchasing dividend stocks. The current ETF market features innovative strategies that provide regular cash flow, often utilising options previously limited to professional traders.

One of the latest entrants is the Innovation-100 0DTE Covered Call Strategy ETF $QDTE ( ▼ 1.49% ) , which combines:

• Exposure to innovative companies.

• An aggressive options strategy for generating frequent income.

In this article, we’ll discuss what QDTE is, how it operates, why it’s gaining investor interest, and why it might not be suitable for everyone.

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What is QDTE?

QDTE is an actively managed ETF aimed at generating weekly income while maintaining exposure to the Innovation-100 Index's price movements.

The Innovation-100 Index (or Nasdaq-100 in other ETFs) is a globally recognised benchmark that tracks the 100 largest non-financial companies listed on Nasdaq. These companies cover technology, communications, consumer discretionary, healthcare, and other innovation-driven sectors.

Mag 7: Major Components of the Index

This index includes many businesses that are shaping modern life, such as cloud computing, artificial intelligence, semiconductors, digital payments, and biotechnology. While these companies have strong long-term growth potential, they also experience significant volatility, with prices that can fluctuate sharply in either direction. This volatility is precisely what QDTE aims to capitalise on.

The key characteristic of QDTE is its use of zero days to expiry (0DTE) call options:

• 📈The ETF maintains exposure to the Innovation-100 Index.

• 🪫Each trading day, it sells call options that expire on the same day.

• 💰The premiums collected from selling these options are distributed to shareholders on a weekly basis.

0DTE options represent the most liquid segment of the U.S. options market, featuring exceptionally narrow bid-ask spreads. Since these options expire within hours rather than weeks or months, QDTE allows traders to consistently collect option premiums in a very short period of time. You can think of it like renting out a highly desirable property every day instead of just once a month.

The Engine Behind QDTE’s Income: 0DTE Covered Calls

Investment Strategy📊

QDTE is not a traditional "buy-and-hold" growth ETF, nor is it a conservative bond substitute. Instead, it occupies a unique space between income generation and equity exposure.

• 🗂️Income Sleeve in an ETF Portfolio: One of the most common ways to utilise QDTE is through an income allocation in a diversified ETF portfolio. In this capacity, QDTE's weekly distributions can help stabilise overall portfolio cash flow, particularly for investors who prioritise regular income over capital appreciation.

• ⚖️Complement to Growth-Heavy Exposure: Investors with Nasdaq-focused or growth ETFs might use QDTE to hedge against volatility partially. While it carries equity risk, the option premiums can help offset minor declines or sideways trading. However, QDTE should not be seen as protection against severe bear markets; it is primarily a tool for harvesting volatility, not a crash shield.

• 🎯Tactical or Opportunistic Allocation: QDTE's income potential is tied to market volatility, prompting some investors to use it as a tactical holding. They may allocate more during periods of high volatility and less during periods of market stability. This strategy requires discipline but highlights the ETF's flexibility compared to traditional income products.

QDTE at a glance

ETF Issuer: Roundhill

Inception: 2024-03-07

Asset Class: Equity (with derivatives)

Underlying Index: QDTE is an active ETF

Geographical Focus: U.S.

Expense Ratio: 0.97% (as of last data point)

Dividend Yield: 38.35% (as of last data point)

Distribution Frequency: Weekly

Historical Performance

QDTE is a new ETF, so its long-term performance record is still developing. However, early trends offer insights into its strategy.

QDTE offers a distinctive feature: weekly cash distributions to shareholders, providing faster cash flow than ETFs that pay monthly or quarterly. Importantly, this income comes not from corporate dividends but from premiums collected through the fund's option-selling strategy. Although these distributions can be substantial, they are variable and not guaranteed, often rising during periods of increased market volatility and fluctuating from week to week.

From a performance perspective, QDTE's structure creates a distinct trade-off. In strong bull markets, selling call options limits upside potential, causing QDTE to lag behind the Innovation-100 Index and pure growth ETFs. However, in sideways or mildly volatile markets, option premium income can boost total return. Yet, during sharp market sell-offs, this income may offer some protection, but QDTE still faces significant equity risk and potential losses.

QDTE Historical Performance (Since Inception)

www.tradingview.com/x/MLbT1cKI

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

QDTE on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Weekly Income Is Rare—and Powerful: Most income ETFs pay monthly. Some pay quarterly. QDTE pays weekly, which can be especially attractive for investors who rely on cash flow for living expenses or reinvestment strategies. Weekly income also allows for faster compounding if distributions are reinvested.

2. Access to Advanced Options Strategies: Trading 0DTE options manually requires experience, constant monitoring, and emotional discipline. QDTE packages this complex strategy into a simple ETF wrapper, making it accessible to everyday investors.

3. Monetising Volatility in Innovative Stocks: Growth-oriented companies tend to be volatile, and volatility increases option premiums. QDTE effectively turns market uncertainty into income—something traditional growth ETFs cannot do.

Top 3 Reasons Not to Invest

1. Limited Upside Participation: The biggest trade-off with covered call strategies is capped upside. If the Innovation-100 Index rallies sharply, QDTE will not fully participate in those gains.

2. Distributions Can Be Tax-Inefficient: Option-based income is often taxed differently than qualified dividends. For investors in taxable accounts, this can reduce after-tax returns. QDTE may be more suitable for tax-advantaged accounts, depending on individual circumstances.

3. Income Is Not Guaranteed: While weekly payouts sound appealing, they are variable. In lower-volatility environments, option premiums shrink, and so can distributions. Investors expecting stable, bond-like income may be disappointed.

Chasing Weekly Income with QDTE ⏱️

QDTE represents a bold evolution in income-focused ETF design. By combining exposure to innovative Nasdaq-listed companies with ultra-short-dated option strategies, QDTE offers something genuinely different:

• Weekly income

• Active volatility harvesting

• Equity exposure with defined trade-offs

However, QDTE is not a one-size-fits-all solution. It shines brightest for investors who:

• Prioritise income over growth

• Understand the mechanics of covered calls

• Appreciate active, rules-based strategies

For long-term growth investors chasing maximum upside, QDTE may play only a supporting role—or none at all. As always, the key is portfolio fit, not headline yields.

QDTE: A Weekly Income ETF for Active Investors

If you found this deep dive useful, consider joining the ETF UNO community, where we continue to explore ETFs that challenge conventional investing ideas—clearly, truthfully, and without exaggeration. You can find us from the button below, the ETFUNO.com website, and our X.com account @etfuno.

Until next time, invest wisely and remain curious.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Welcome back to ETF UNO's "Legendary Portfolio" series, where we explore great investors and ask: "If they could only buy ETFs today, which ticker symbols would they choose?"

Today, we're featuring Sir John Templeton. Grab your coffee (or a weekend mimosa) as we create the "Templeton 2025 ETF Portfolio" with five funds, each described in a single sentence, to enhance your brokerage account.

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🧭The Mind of a Contrarian: Templeton's Core Philosophy

Sir John Templeton was a Kentucky-born Rhodes Scholar and British knight recognised for his contrarian investment strategies. Often called the "greatest global stock picker of the century," he pioneered the principle of "buy low, sell high." In the 1960s, when most investors focused on the U.S. and Europe, Templeton explored emerging markets, buying undervalued stocks in Asia and Latin America, an approach many considered reckless at the time.

His Templeton Growth Fund achieved an impressive average annual return of about 15% over 38 years, delivering returns across various market conditions. This success led to the creation of Franklin Templeton, now a highly respected investment firm.

John Templeton was both smart and disciplined. His strategy of buying during "points of maximum pessimism"—like borrowing to invest in 104 struggling companies at the start of World War II—built his fortune. His core principles remain valuable for ETF investors today.

Here is a breakdown of John Templeton's investing style in bullet points:

• 🏦Invest, Don't Gamble: Treat the market as a place for building long-term wealth, not a casino for short-term bets. Success comes from patience and research, not luck.

• 💎Seek Value and Quality: Look for companies that are leaders in their field, have strong finances, and have trusted brands. Buy the stock, not the overall market trend.

• ☂️Buy When Others Despair: Be a contrarian. The best bargains are found when pessimism is at its peak. As he said, "If you want to have a better performance than the crowd, you must do things differently from the crowd".

• 🛡️Focus on Real Returns: Always account for the erosive effects of taxes and inflation on your profits. The true goal is to increase your purchasing power over time.

• 🌐Diversify Globally: Spread your investments across different countries and sectors. The future is always uncertain, and diversification is your best defence against the unforeseeable.

• 🚪Stay Open-Minded: Be ready to invest anywhere in the world where value exists. There is no single asset or country that is always the best investment.

Visualising Templeton's Wisdom

📊The Templeton-Inspired ETF Portfolio

If Sir John Templeton were constructing a portfolio today using only ETFs, he would likely emphasise low-cost, rules-based funds that align with his core principles of global value, quality, and dividend income. Below are five ETFs that embody his philosophy, along with the specific Templeton principle each one represents.

1. Putnam Focused Large Cap Value ETF (PVAL)

$PVAL ( ▼ 1.56% ) is a thoughtfully curated portfolio consisting of 30 to 40 deeply undervalued U.S. stocks. It is built on a multi-factor model that emphasises disciplined, quantitative approaches to acquiring stocks at low prices. PVAL reflects Templeton's commitment to investing in undervalued companies by focusing on U.S. stocks that are trading below their intrinsic value. This makes it a contemporary interpretation of traditional value investing.

2. Franklin International Low Volatility High Dividend ETF (LVHI)

$LVHI ( ▼ 0.58% ) offers affordable access to high-quality, dividend-paying companies in developed markets outside the U.S., combining income with international diversification. LVHI embodies Templeton’s global perspective by providing diversified international exposure that underlines steady income and reduced volatility.

3. Franklin Templeton Core Bond ETF (FLCB)

$FLCB ( 0.0% ) serves as a core holding of U.S. corporate bonds, providing stability and income that helps safeguard the portfolio's real return from market volatility. This investment enhances the portfolio's overall stability and aligns with Templeton's belief that effective diversification should include high-quality bonds alongside equities.

The Templeton Touch, Institutionalised

It's important to note that PVAL, LVHI, and FLCB are all ETFs managed by Franklin Templeton. Several investment selections should come from this firm, which carries his name. These ETFs embody Templeton's investment philosophy of seeking value and quality, institutionalised into modern, accessible strategies.

4. Vanguard FTSE Emerging Markets ETF (VWO)

This ETF provides direct and comprehensive exposure to the growth potential of emerging markets, which are considered the new frontier for investors looking for value. VWO embodies the core principles of Templeton, offering broad access to markets where long-term growth potential and investment opportunities remain available.

5. Schwab U.S. Dividend Equity ETF (SCHD)

SCHD invests in 100 high-quality U.S. companies that have a strong history of sustainable dividends. It focuses on financial health and reliable income, which aligns with Templeton’s long-term investment strategy of selecting quality companies that provide investors with consistent and growing dividends over time.

Boring Beats Brilliant: The Templeton Way

Lessons from the Original Global ETF Investor🌍

Sir John Templeton's story teaches us that successful investing is less about predicting the future and more about adhering to a disciplined, principled approach. It's about having the courage to be different and the patience to let compounding work.

By combining these ETFs, you create a portfolio with a distinctly Templeton flavour:

• A global scope (through LVHI and VWO)

• A focus on undervalued and quality assets (through PVAL and SCHD)

• A defence against inflation and volatility (through FLCB and SCHD's dividends)

• All wrapped in the low-cost, diversified structure of ETFs

This blend seeks not just growth, but thoughtful growth designed to build real wealth over time.

Happy Weekend Investment Reading

We hope you enjoyed this simple weekend reading and feel inspired to view your investments through the perspective of one of history's greats.

Would you like more insights like this? The journey to smarter investing is more enjoyable within a community. Join the ETF UNO family to receive valuable insights, simplified strategies, and weekly deep dives delivered directly to you. Let's continue learning from the legends and work together to build better portfolios.

Happy weekend, happy bargain-hunting, and see you in the next edition!

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.

Today, we're highlighting a new player in the fixed-income space: the BondBloxx Private Credit CLO ETF (PCMM). This actively managed ETF allows retail investors to access the historically institutional-only private credit market. For those seeking income while prioritising capital preservation, PCMM offers an appealing entry into an asset class traditionally dominated by endowments and pension funds.

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What is PCMM?

We previously introduced the PCMM in our private credit quicklist article. Launched by BondBloxx on December 2, 2024, this actively managed exchange-traded fund focuses on capital preservation and current income, targeting investors who seek yield without excessive risk.

Typically, PCMM invests at least 80% of its net assets in private-credit collateralised loan obligations (CLOs). CLOs are a type of securitisation that pools payments from multiple middle-sized and large business loans into tradable securities. These structures group diverse securities into risk tranches, each representing different levels of risk and return, and can be sold to investors. By investing in a CLO tranche, investors gain exposure to a diversified pool of loans rather than a single corporate loan or bond.

Gaining Diversified Loan Exposure Through CLO Investments

Private credit strategies, particularly middle-market lending via CLOs, typically offer higher interest payments than comparable corporate bonds or leveraged loans. There are a few reasons for this:

• 🛡️Resilience in Rising Rates: The underlying loans are typically floating-rate, meaning their interest payments adjust with benchmark rates, providing a built-in hedge against inflation.

• 💰Attractive Yield Premium: By focusing on middle-market companies, these loans often command higher credit spreads than those for large corporations, leading to greater potential returns.

• 🧩Built-in Diversification: Each CLO holds a portfolio of dozens or even hundreds of individual loans, which structurally mitigates the risk from any single borrower's default.

By investing in PCMM, retail investors can access potential benefits, including higher yields and diversification, without needing to source or underwrite private loans individually.

The Resilience and Returns of Private Credit Investing

The U.S. private credit market has grown substantially, now accounting for about 21% of the leveraged finance market, compared to 40% for high-yield bonds—a shift that highlights its growing importance in the credit ecosystem.

Investment Strategy📊

Given its structure and objectives, PCMM can play multiple roles in a diversified ETF portfolio. Here’s how you might think about it:

• 🏗️Core or satellite fixed-income allocation: Investors seeking yield beyond traditional investment-grade bonds (or U.S. Treasuries) might use PCMM as a core holding — or as a satellite to supplement a core bond sleeve.

• 🚀Yield booster: In a broader, balanced portfolio (e.g., equities + bonds), PCMM could serve as the “income leg,” providing higher yield while still preserving some diversification.

• ⚖️Rate-hedge/floating-rate complement: Because CLOs often feature floating-rate features, PCMM may offer some resilience in periods of rising interest rates. Thus, it can complement longer-duration bond holdings vulnerable to rate increases.

• 🔓Alternative credit exposure: For investors seeking exposure to private credit and middle-market corporate debt — historically hard to access directly — PCMM provides a liquid, ETF-based solution that democratises an institution-style asset class.

PCMM at a glance

ETF Issuer: BondBloxx

Inception: 2024-12-02

Asset Class: Fixed Income

Underlying Index: PCMM is an active ETF

Geographical Focus: U.S.

Expense Ratio: 0.68% (as of last data point)

Dividend Yield: 6.47% (as of last data point)

Distribution Frequency: Monthly

Historical Performance

Even though PCMM is a relatively young ETF, we already have some performance data worth noting. Key metrics (as of late 2025) include:

• Since inception (Dec 2024 to Sept 2025): 5.45% total return.

• YTD (2025) performance: 5.67% through early December 2025.

• Dividend distribution schedule: The ETF distributes dividends monthly.

Because PCMM launched only in late 2024, there is no long-term (5+, 10-year) track record yet — but early results suggest the fund is delivering on its income objective.

PCMM Historical Performance (Since Inception)

www.tradingview.com/x/d5dDgCLM

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

PCMM on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Professional Management with Strong Protections: Private credit investments typically offer stronger investor protections, with better covenants and collateral structures than public market alternatives. BondBloxx's active management approach allows the team to navigate the complex CLO market, selecting securities with the most attractive risk-reward profiles while maintaining focus on capital preservation.

2. Access to Institutional-Grade Private Credit: PCMM provides retail investors with access to private credit strategies, specifically middle-market lending, which has a history of superior risk-adjusted returns compared to public markets. The ETF invests in loans to private middle-market companies, offering exposure to an otherwise difficult-to-access asset class.

3. Attractive Yield in a Rising Rate Environment: PCMM offers a 6.47% dividend yield, ideal for income generation amid a low traditional fixed-income environment. Its floating-rate CLOs benefit from rising interest rates, as coupon payments increase over time. This makes PCMM appealing in a macroeconomic landscape where central banks are likely to keep interest rates high for longer periods.

Top 3 Reasons Not to Invest

1. Limited Performance History: With an inception date of December 2, 2024, PCMM lacks a long-term track record across various market cycles. Investors don't yet have evidence of how the fund might perform during significant economic downturns or periods of severe credit stress. This limited history makes it challenging to fully assess the fund's risk management capabilities and downside protection.

2. Credit and Default Risk Exposure: Private credit borrowers are generally riskier than those in public markets, like high-yield bonds and leveraged loans. Middle-market companies that utilise private credit often have weaker financial profiles and less diversified business models, making them more vulnerable to economic downturns. Therefore, investors should be aware that private credit carries higher risks than public market options.

3. Liquidity Mismatch Concerns: PCMM trades daily like other ETFs, but the underlying private credit CLO market can be highly illiquid during periods of stress. This can create a mismatch between the ETF's daily liquidity and its assets' liquidity, leading to notable price discounts or premiums relative to net asset value during market crises. With assets of around $186 million, the fund has reasonable scale, though smaller ETFs may struggle with liquidity in volatile markets.

Riding the Private Credit Wave🌊

PCMM offers an innovative approach to ETF investing by making private credit strategies accessible to a wider range of investors, rather than just institutional ones. With a focus on private credit collateralized loan obligations (CLOs), the fund delivers attractive yields, capital preservation, and diversification benefits. Its expense ratio is 0.68%, and it has demonstrated solid performance since its December 2024 inception.

However, investors should consider the fund's limited track record, the complexity of CLO structures, and the risks associated with private credit. As with any specialised ETF, PCMM should be part of a diversified portfolio rather than a standalone investment.

Democratising Private Credit: The PCMM CLO ETF

Are you ready to explore innovative ETF strategies? Join the ETF UNO community today for exclusive insights, portfolio construction guidance, and early access to our analysis of emerging ETF opportunities. Don't miss out on the future of ETF investing—become a part of ETF UNO and transform your approach to portfolio construction in today’s dynamic markets.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.

Welcome back to ETF UNO, where we showcase the best opportunities in ETFs. Today, we’re focusing on the KraneShares Artificial Intelligence & Technology ETF (AGIX), one of the most exciting thematic ETFs in recent years. If you’re looking for diversified exposure to the rapidly growing AI sector—covering everything from chips and software to innovative disruptors—this article is for you. We’ll discuss what makes AGIX both interesting and risky, how it operates, its recent performance, and how to incorporate it into your ETF portfolio effectively.

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What is AGIX?

Launched on July 17, 2024, AGIX uses a unique strategy to capture the growth potential of artificial intelligence. It invests at least 80% of its net assets in securities from the Solactive Etna Artificial General Intelligence Index while being actively managed as an ETF. The selection process relies on a proprietary "AI Exposure Score" that assesses each company's AI relevance and AI readiness. This hybrid approach allows portfolio managers to seize opportunities outside the index while maintaining a disciplined stock selection framework.

AGIX aims to address the entire AI value chain, divided into three main categories: hardware, infrastructure, and applications.

• 🏿Hardware: the chips, semiconductors, and physical compute power that underpin AI workloads.

• 🛜Infrastructure: cloud, data-centre, networking, and other backbone services that enable AI deployment at scale.

• ✨Applications: software, platforms, and services — including AI tools, services, and end-user applications.

This multi-layered exposure helps AGIX capture value irrespective of whether AI growth comes via breakthrough semiconductors, better infrastructure, or viral adoption of AI-powered apps.

AGIX: Full-Stack AI Exposure

AGIX stands out for its investment in private AI companies. Uniquely for a retail ETF, it includes holdings in private unicorns like xAI (Elon Musk's venture) and Anthropic (creators of Claude AI). This access to private markets, typically for institutional investors, gives AGIX shareholders a notable advantage in early-stage AI innovations.

AGIX Holdings. Source: KraneShares website

Investment Strategy📊

Given its profile, AGIX can serve different strategic roles in an ETF-based portfolio, depending on your risk appetite and time horizon. Here are some typical approaches:

• 🎯Core satellite with AI tilt: Use a broad low-cost index ETF (e.g., broad US equity or global equities) as the “core,” and add a position in AGIX as a “satellite” holding to tilt your portfolio toward high-growth AI exposure.

• 🧩Thematic allocation: If you believe AI will reshape multiple sectors over the coming decade, you might allocate a portion of your equity exposure to AGIX instead of or alongside other thematic or sector funds (e.g., technology, cloud, software).

• 🔥Risk-return enhancer: For more growth-oriented portfolios, AGIX can be a high-conviction active bet — acknowledging that with higher growth potential comes higher volatility.

• 🌠Long-term “moon-shot” allocation: Given its exposure to private AI ventures and emerging technologies, AGIX might appeal to investors willing to hold for many years, hoping that some private holdings explode in value.

Because AGIX includes private holdings and emerging-market-like volatility, it’s generally best as a diversified complement, not as the foundation of a portfolio.

AGIX at a glance

ETF Issuer: KraneShares

Inception: 2024-07-17

Asset Class: Equity

Underlying Index: AGIX is an active ETF

Geographical Focus: Global

Expense Ratio: 0.99% (as of last data point)

Dividend Yield: 0.31% (as of last data point)

Distribution Frequency: Annual

Historical Performance

Since AGIX launched in July 2024, its history is brief. As of November 30, 2025, AGIX’s price has increased by approximately 44.7% since its inception. Even within this short timeframe, this return emphasises AGIX’s potential for significant growth, likely fuelled by overall enthusiasm for AI and the incorporation of promising private AI companies.

AGIX Historical Performance (Since Inception)

www.tradingview.com/x/YFcFXcBK

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

AGIX on the Radar

For each domain, higher scores indicate better suitability for investment

Top 3 Reasons to Invest

1. Comprehensive AI Ecosystem Exposure: Unlike many AI-focused ETFs that target only semiconductor companies or application developers, AGIX offers broader exposure across the entire AI value chain. It includes hardware manufacturers such as NVIDIA, infrastructure providers such as Microsoft's Azure, and application developers such as Meta's AI research. This approach allows investors to capture innovations across the AI ecosystem while minimising the risk of missing out on breakthroughs in any specific segment.

2. Unprecedented Access to Private AI Markets: Accessing private AI companies has often been challenging for retail investors due to high minimum investments and strict accreditation requirements. AGIX overcomes these barriers by investing in leading firms like xAI and Anthropic, enabling investors to benefit from the growth phase before a public offering and achieve returns typically inaccessible to individual investors.

3. Active Management in a Rapidly Evolving Sector: The AI landscape evolves rapidly, with constant breakthroughs and challenges. AGIX's active management allows portfolio managers to quickly adjust investments, increasing exposure to promising areas while reducing it in struggling segments. This adaptability is crucial in emerging technologies, where index-based strategies may lag behind new developments.

Top 3 Reasons Not to Invest

1. High Expense Ratio: AGIX has an expense ratio of 0.99%, which is higher than most broad market ETFs and sector-specific funds. This reflects the specialised investment strategy and costs of accessing private markets. While the unique exposure may justify the higher fees, investors should carefully weigh these costs against expected returns, particularly as passive strategies become more attractive in a rising interest rate environment.

2. Concentration Risk in the Technology Sector: AGIX focuses heavily on the technology sector, with major holdings in the Magnificent Seven. This concentration poses significant sector-specific risks due to potential regulatory changes or economic downturns. Investors should maintain sector diversification to mitigate these risks.

3. Liquidity Concerns with Private Holdings: Access to private companies provides advantages but also brings liquidity challenges. Private investments are less liquid than public securities, which can create redemption pressures during market stress. Furthermore, their valuation relies on periodic appraisals rather than real-time market prices, potentially leading to discrepancies between the ETF's net asset value and the market value of its holdings during volatile periods.

📈Betting Big on the Future of Intelligence

AGIX offers a unique investment opportunity with broad exposure to the AI value chain and access to private AI companies. While its strong early performance supports the investment thesis, potential investors should consider its high expense ratio, sector concentration and liquidity issues.

AGIX is best viewed as a satellite holding in a diversified portfolio, allowing investors to tap into AI's growth potential while managing risk. It is particularly suitable for those with a long-term horizon who can handle market volatility.

As with any investment, thorough research is essential. We encourage you to explore AGIX's holdings and strategy to see how they align with your investment goals.

Balanced AI Investment Outlook

Are you ready to dive deeper into the world of ETF investing? Join the ETF UNO community today for exclusive insights, portfolio strategies, and expert analysis that can transform your approach to ETFs. Visit ETFUNO.com to subscribe and enhance your ETF investing experience—because in the realm of ETFs, knowledge is power.

DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.