ETFs: Invest Like an Economist—Not a Stock Picker

Currently, we view the growth of the U.S. economy (albeit at a somewhat slower pace these days as indicated by the Astor Economic Index®) as reason to have equity exposure. Currently, within our investment portfolios, we have established exposure to the broad market using ETFs such as iShares Core S&P 500 (IVV) and iShares Core S&P Total U.S. Stock Market (ITOT); and to specific sectors using ETFs such as First Trust Financials AlphaDEX (FXO), First Trust Technology AlphaDEX (FXL), and First Trust Health Care AlphaDEX (FXH).

Similarly, once investors make up their minds about the kind of exposure they’re seeking—broad market, industry sector, domestic, international, fixed income, and more—they can rest assured that there’s an ETF to provide that exposure. As my colleague, Bryan Novak, noted in his recent column, a little due diligence and some homework will help investors choose the right ETF for their desired market exposure and investment objectives.

The explosive growth of ETFs has been on the investment industry’s radar for the past couple of years, including last year’s record-breaking pace of fund creation. We don’t expect the fervor to die down any time soon. But in the excitement for these facile instruments, we shouldn’t lose sight of an important fact: ETFs help you focus on fundamentals to think—and invest—like an economist.

Rob Stein is the Founder and CEO of Astor Investment Management, a participant in the ETF Strategist Channel. Astor is a fundamentally driven, macroeconomics-based asset allocation firm ( For more information, please call 800.899.8230 or email [email protected].

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All information contained herein is for informational purposes only. This is not a solicitation to offer investment advice or services in any state where to do so would be unlawful. Analysis and research are provided for informational purposes only, not for trading or investing purposes. All opinions expressed are as of the date of publication and subject to change. Astor and its affiliates are not liable for the accuracy, usefulness or availability of any such information or liable for any trading or investing based on such information.

At the time of writing, Astor Investment Management held IVV, ITOT, FXO, FXL, and FXH among its universe of ETFs included in its multi-asset portfolios. Astor Investment Management is a fundamentally-driven quantitative asset manager that seeks to empower clients with economics-based tools and portfolio solutions to reduce risk and help attain investment goals. Contact Astor at 1-800-899-3230 or [email protected]. For a complete list of relevant disclosures, please click here309151-497