The first half of 2019 has proven to be an exciting year for the markets. The geopolitical shifts we've observed have created new opportunities and challenges for asset managers. Exchange Traded Funds have capitalized on these market moves by continuing to provide investors with new ways to express their investment theses and navigate the turbulent waters.
Throughout the year, many investors' focus has been on the trade war tensions between the US and China. Investors were somewhat optimistic that the two sides would come to an agreement in the early part of 2019. By May, however, those hopes melted away when President Trump's tariff levy increased from 10% to 25% on $200 billion worth of Chinese goods. China retaliated in-kind. This and many other rising geopolitical conditions did not stop equities from posting one of the strongest H1 gains. Major indices touched new all-time highs across the board.
Weak economic projections from the Fed earlier in the year and overall concerns about a cooling global economy also had many investors shying away from equites. This led to large inflows into the fixed income and commodities markets and caused strong performance throughout H1.
With the many market shifts we’ve seen throughout the year, we’ve decided to create this halftime report in order to highlight some of the biggest ETF moves and trends that have been observed so far this year.