The Surprising Effect Volatility Has on ETFs

The final stretch of 2015 has brought about many conversations among exchange traded fund industry insiders about the stark change in the investing landscape heading into 2016. U.S. equities have grown over 100% since their 08′ doldrums but are now looking over-priced while the third quarter brought more evidence of a profit recession. The Fed prepares to raise rates for the first time in 9 years as fundamentals of the S&P look thin but the job numbers look strong…it’s even cloudier than usual when looking to the future and trying to figure out where the market is going.

All of this uncertainty has brought back an old foe of many investors: volatility. August’s spike in volatility rattled the markets as an extended bull market lulled investors into a sense of security that we hadn’t seen in a long time.

Tom recently caught up with Ben Johnson, Morningstar’s Director of Global ETF Research, at their ETF Conference to discuss how all these conflicting, challenging developments are changing the ETF markets. Ben has 2 pieces of essential, practical advice that all ETF investors should make sure they practice while also sharing a trend that may come as a shock to ETF investors.

Check out their chat below!