According to “Bloomberg” reports, compared with various operational strategies to combat risks, among the stock market strategies in 2023, there is nothing better than simply holdingS&P 500 IndexMuch more effective.
As 2023 comes to an end, investors are taking to heart the year’s lessons of simplicity.
After rising 4% this month, the S&P 500 has risen 24% in 2023. Equity ETFs have absorbed nearly $69 billion so far in December, the best month for inflows in two years, according to data from Bloomberg Intelligence.
Investors poured $494 billion into SPDR, the largest fund tracking the S&P 500, in December S&P 500 ETF Trust(SPY-US) invested more than $42 billion and is expected to have its best month since 1998.
It’s a testament to a tried-and-tested approach of buying and holding the benchmark that’s now trading near new highs that some investment strategies designed to be defensive have lagged this year.
Art Hogan, chief market strategist at B. Riley Wealth, said that if you start this year thinking, “Everyone says a recession is coming, so you should invest defensively,” you have already lost.
As we head into 2023, many strategists expect stocks to see only modest gains at best after a battering in 2022. But there were signs that the economy continued to grow and inflation slowed, and stocks climbed steadily throughout the year. Stocks have been rallying in recent days after Federal Reserve Chairman Jerome Powell predicted interest rates could fall next year.
Despite falling 1.5% last Wednesday,S&P 500 IndexIt was still up 0.8% for the week, marking the eighth consecutive week of gains and the longest winning week since 2017.
Seema Shah, chief global strategist at Principal Asset Management, said any sign of a slight shift in Ball’s stance would open the door for money to flood into stocks, so the development was not entirely unexpected.
According to Bloomberg’s Athanasios Psarofagis, although the total capital injection into stock funds this year is US$349 billion, slightly lower than the US$398 billion in 2022, the four S&P 500 ETFs have received more than one-third of the total capital injection. Capital inflows were the largest ever. That hurts funds tracking specific sectors like energy and utilities.
U.S. stock industry ETF fund outflows this year reached $12 billion, the worst year ever.
These withdrawals proved prescient. Data show that this year only 31% of “active” ETFs (including theme funds, ESG products, factors and active management tools) outperformed the benchmark index, setting the lowest outperformance rate since 2014.
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2023-12-25 13:50:05
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