Blackrock Is Soaring As Investors Plow Money Into ETFs

BlackRock said that iShares possessed a total of $2.3 trillion assets during the third quarter of the year where nearly 70% were stock funds. Blackrock’s …

Blackrock Is Soaring As Investors Plow Money Into ETFs

NEW YORK(CNN BUSINESS)- Black rock the owner of the iShares family of exchange-traded funds and the world largest asset supervisor, has grown larger amidst the COVID-19 pandemic. BlackRock said Tuesday that it now manages $7.8 trillion assets, a 12% increase from the previous year.

BlackRock thrives through these volatile times due to the continued allure of passively managed index funds. BlackRock said that iShares possessed a total of $2.3 trillion assets during the third quarter of the year where nearly 70% were stock funds.

Blackrock’s revenue and profit easily crossed the Wall Street’s prediction.

“As investors around the world navigate current uncertainty, including the pandemic and uneven economic recovery, BlackRock is serving clients’ needs with global insights, strategic advice and whole-portfolio solutions,” said BlackRock CEO Larry Fink in a press release.

A surge in BlackRock’s stock by 3% is noticed with an overall growth of 25% in 2020.

On a conference call with analysts, BlackRock Chief Financial Officer Gray Shedlin said “the company was able to very quickly migrate from 16,000 people in 60 offices to 16,000 people in 16,000 offices.” He specified that only 6% to 7% of its staff is working from office.

Fink says he feels “very productive and energizing.” To be working from BlackRock’s New York headquarters at least 3 times a week.

BlackRock seems to be victorious at times when other Wall Street investment banks are struggling.

JPMorgan Chase (JPM), Citigroup, Bank of America and Goldman Sachs are all still in the red zone.

Fink said in a conferee call with an analyst” improving macro backdrop” that had boosted the stock market and brought a spurt in tech stocks –particular over the past few months. Pointing at the concerns about restarting the economy in the US associated with the lag in stimulus ,Fin cautions the investors to keep navigating growing risk in the coming months that my beat up due to the upcoming Presidential election in US.

He also said there seems to be an extended”silent crisis of retirement” in the US, as many existing investors withdraw their support due to lack of financial resources. Fink also states that the older investors need to be more cautious about their retirement savings; as the US Treasury yields are extremely low because the Federal Reserve keeping interest rates at 0.

“There’s no question.. government bonds are going to plat less and less of a role for most retirement portfolios,” Fink said.” You certainly would not use government bonds for income purposes.”

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Plug Power stock up on big investor news

… holding PLUG stock in their portfolio. These names include BlackRock Fund Advisors, The Vanguard Group, Hood River and Pinnacle Associates.

It’s going really well for Plug Power Inc (NASDAQ:PLUG) stock holders as of lately. Even with the market-wide selloff on Thursday PLUG came back during pre-market session on Friday. PLUG shares are up 265% year-to date. Institutional investors who want to jump on the bandwagon have now also become aware of this. It has been announced that the hedge fund DE Shaw has invested in the American fuel specialist.

The hedge fund now holds five percent of the company after stocking up on a stake of 20.2 million shares. DE Shaw is known on the scene as an activist investor.

But this time the entry into Plug Power should be a passive investment. Therefore, there should be no interference with corporate management.

Besides D.E. Shaw some other big name hedge funds are holding PLUG stock in their portfolio. These names include BlackRock Fund Advisors, The Vanguard Group, Hood River and Pinnacle Associates.

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Investment Strategy During Crisis

In this article, I will highlight the main reasons why investing in real estate is the best way to invest your money in times of crisis. [Sources: 17]

The reason why real estate investments are a top choice for investors even in times of crisis is that investors will continue to make money in the long term. Beginners can enjoy great success in real estate investment, owing to low interest rates and low volatility in times of financial crisis. Look for long-term opportunities during a financial crisis because they don’t come around often. Personal Finance Insider writes products, strategies and tips to help you make smart decisions with your money. [Sources: 3, 4, 5, 17]

If you are looking for a passive investment idea that will probably keep 5-9% of your job during a crisis, real estate investments are a top option. Many investors prefer value investments because this strategy can get complicated very quickly, but it has also proven to be very high-yield. Every investment strategy has its advantages and disadvantages, and it is important to do your research and see if investing in the future is the right step for you. Few have passed the crisis test and continue to offer investors long-term returns of more than 10% per year during the financial crisis. [Sources: 1, 17]

For most investors, the trick is not to get in the way of themselves and sell at a loss in difficult times. ETF investors can weather a crisis if they follow the following six steps. The golden rule is that you should not panic-sell quality stocks, for example, and not buy high-risk or low-return stocks with high returns. [Sources: 0, 14]

None of the above is a perfect hedge, but they all buy you some sort of safety margin. Given that the market can misjudge in any direction, and that none of them is a perfect hedge, the easiest way to make money during a downturn is to take long cash or equivalent. There is no good time to invest in a recession, just as there is during any recession. [Sources: 4, 9]

A better strategy for recession is to invest in well-managed companies with a long-term track record and strong balance sheets. Some investors may consider developing a strategy based on a combination of long cash, short stocks and long bonds, as well as short equity. [Sources: 12]

Remember to hold defensive assets so you can weather a financial crisis without selling shares. However, you should keep a few funds on hand before you go public. This includes investing in broad-based stock index funds or selecting individual stocks that are believed to perform well in a stock market crisis. [Sources: 0, 3, 5]

This can be difficult when faced with an investment strategy for the future and short-term uncertainties. Some investors remain invested in the market to mitigate downside risk, but this risk is increased during periods of heightened risk, such as a financial crisis or economic downturn. [Sources: 8, 15]

Many investors who have worked all their lives to save for retirement think that this has happened in past recessions like the GFC. Those who foresee a crisis coming can implement a short-term strategy to benefit from a falling market, but such investment strategies will be wrong if the market continues to slide downwards, as we saw with the 2008 financial crisis. Don’t let the short-term terror of the stock market tempt you into making the decision to move your money out of shares and into cash. [Sources: 6, 7, 11, 16]

If you want to invest in a financial crisis, you should take a well-thought-out approach. To manage your assets well and effectively in times of crisis, it is important to take a long-term perspective, define an investment strategy, adhere to a set of guidelines, and diversify your portfolio across asset classes, so that you do not, in simple terms, put all your eggs in one basket. Investment strategies during recessions should be aligned with your expertise so that you can guarantee a solid level of participation. [Sources: 2, 10]

In order to manage your assets profitably and effectively in the times of COVID-19, you must first of all reassess your financial goals and investment goals. Do not let the current financial crisis deter you from pursuing your long-term financial goal. Stay focused on your goals, whether it’s maximizing your IRA or investing for retirement or retirement. Besides finding niche ideas and expertise that suit people like you, a basic principle is when you want to invest in a financial crisis. [Sources: 2, 10, 13]

Stocks tend to suffer during recessions, so you’ll probably want to choose growth stocks primarily. Investing in stocks with a long-term, high-yield, low-risk portfolio may not be exciting, but it is an important step toward building a solid portfolio that can weather a recession or stock market crisis. If your portfolio contains value and growth stocks, it will help you discover profitable stocks to get through the long periods of decline that markets are experiencing. There are a lot of investment strategies for young people and you don’t want to have to sell your shares in a falling market. [Sources: 1, 3, 16]

Sources:

(0): https://www.justetf.com/uk/news/etf/can-your-etf-portfolio-withstand-a-crisis.html

(1): https://www.greedyrates.ca/blog/is-value-investing-a-good-strategy/

(2): https://fundsup.co/how-to-invest-during-a-financial-crisis-a-quick-investors-guide/

(3): https://investorjunkie.com/investing/invest-during-a-crisis/

(4): https://catanacapital.com/blog/investing-during-recession-economic-downturn/

(5): https://www.businessinsider.com/personal-finance/money-saved-to-invest-during-financial-crisis-opportunity-fund-2020-4

(6): https://economictimes.indiatimes.com/mf/analysis/can-you-always-make-money-by-investing-in-a-falling-market/articleshow/75042059.cms

(7): https://russellinvestments.com/us/blog/risks-fleeing-cash-crisis

(8): https://www.janushenderson.com/en-us/advisor/article/after-crisis-finding-long-term-value-in-small-cap-stocks/

(9): https://www.financialsamurai.com/how-to-make-lots-of-money-during-the-next-downturn/

(10): https://www.financialexpress.com/money/how-to-manage-wealth-effectively-during-the-covid-19-crisis/1994142/

(11): https://www.investopedia.com/articles/investing/041415/investing-crisis-high-riskhigh-reward-strategy.asp

(12): https://www.investopedia.com/ask/answers/042115/whats-best-investing-strategy-have-during-recession.asp

(13): https://havenlife.com/blog/how-to-financially-prepare-for-recession/

(14): https://www.theglobeandmail.com/investing/investment-ideas/article-three-strategies-to-avoid-in-crisis-conditions-rosenbergs-no/

(15): https://8020consulting.com/capital-investment-strategies-covid-19/

(16): https://abcnews.go.com/Business/story?id=4260434&page=1

(17): https://www.mashvisor.com/blog/real-estate-investment-best-strategy-crisis/

Should iShares Morningstar SmallCap Growth ETF (JKK) Be on Your Investing Radar?

Looking at individual holdings, Match Group Inc (MTCH) accounts for about 2.82% of total assets, followed by Alteryx Inc Class A (AYX) and Quidel …

Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the iShares Morningstar SmallCap Growth ETF (JKK), a passively managed exchange traded fund launched on 06/28/2004.

The fund is sponsored by Blackrock. It has amassed assets over $242.16 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.

Why Small Cap Growth

With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.30%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.26%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund’s holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector–about 26% of the portfolio. Healthcare and Consumer Discretionary round out the top three.

Looking at individual holdings, Match Group Inc (MTCH) accounts for about 2.82% of total assets, followed by Alteryx Inc Class A (AYX) and Quidel Corp (QDEL).

The top 10 holdings account for about 11.73% of total assets under management.

Performance and Risk

JKK seeks to match the performance of the Morningstar Small Growth Index before fees and expenses. The Morningstar Small Growth Index measures the performance of stocks issued by small-capitalization companies.

The ETF has gained about 8.93% so far this year and it’s up approximately 9.93% in the last one year (as of 07/28/2020). In the past 52-week period, it has traded between $142.18 and $230.73.

The ETF has a beta of 1.22 and standard deviation of 25.94% for the trailing three-year period, making it a medium risk choice in the space. With about 241 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Morningstar SmallCap Growth ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JKK is an outstanding option for investors seeking exposure to the Style Box – Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 2000 Growth ETF (IWO) and the Vanguard SmallCap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $8.87 billion in assets, Vanguard SmallCap Growth ETF has $10.94 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.


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iShares Morningstar SmallCap Growth ETF (JKK): ETF Research Reports

Quidel Corporation (QDEL) : Free Stock Analysis Report

iShares Russell 2000 Growth ETF (IWO): ETF Research Reports

IACInterActiveCorp (MTCH) : Free Stock Analysis Report

Vanguard SmallCap Growth ETF (VBK): ETF Research Reports

Alteryx, Inc. (AYX) : Free Stock Analysis Report

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