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ETF Current Outlook

ETF Driven Strategy

Brian Rauscher

Head of Global Portfolio Strategy & Asset Allocation

Brian Rauscher

Brian Rauscher is a Managing Director and Head of Global Portfolio Strategy and Asset Allocation at FSInsight. He joined Robert W. Baird & Co. as Chief Portfolio Strategist in 2012 after 15 years on Wall Street. He has also worked on the buy side as the U.S. Equity Strategist at Fortress Investment Group on the Liquid Macro Fund. From 2004-2009, Rauscher was at Brown Brothers Harriman as the Director of Portfolio Strategy and Director of Research. Prior to that, he worked for five years as an investment strategist on the team of Wall Street legend Byron Wien, at Morgan Stanley.

February Outlook

As we flipped the calendar from 2020 to 2021, investors were more than happy to leave the Year of the Rat and optimistically shift towards a return to normalcy and better times ahead in the Year of the Ox, which is close enough to a bull for us. However, January saw numerous events that were quite unusual, the unprecedented spectacle that occurred on 1/6 at the U.S. Capitol, a transition in power in Washington D.C., retail investors attempting to battle the Hedge Fund community, and the return to the Super Bowl of Tom Brady as the oldest quarterback to get back to the big game.

The combination of these things along with many other headline news items contributed to the S&P 500 rallying over 3%, but then ultimately ending the month down over 1%. It seems like the anticipated period of relative calm is still on the horizon.

In last month’s comments, we discussed the likelihood that 1Q21 would be bumpy although we certainly would not have forecasted the reasons that led to the increased volatility. Unfortunately, the equity ride may not be as smooth as one would like for a while, so we have to remain alert for the potential for a negative outcome to occur.

With that being said, our research suggests that investors should continue to focus on the bigger picture that will drive the U.S. equity markets during 2021 for the year and not only the next several weeks — a corporate profits recovery and the continuation of accommodative monetary and fiscal policies. Hence, our research process remains bullish and we are still advising investors to view dips and tactically weak price periods as buying opportunities.

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