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.

June Outlook

The resilient S&P 500 keeps grinding higher putting in its fourth consecutive monthly gain after starting the year down during January. The rally has continued despite the growing macro anxieties by forecasters and institutional investors. Our research is still constructive for the U.S. equity markets, and it is still flashing clear signals about where the opportunities are and what parts of the S&P 500 should either be de-emphasized or avoided.

Thus, we are still recommending that investors stay the course and keep an eye on what is to come, which is the reopening of the domestic economy and the continuation of the corporate profit recovery that we have been discussing for several quarters.

We at FSI continue to hold the view that active management of portfolios can beat passive strategies over time if one employs disciplined data driven approaches to investing. Our research suggests that this is no easy task, but it is clearly obtainable. However, it does take self-discipline and perseverance.

When the year started, we laid out our thesis that the early parts of 2021 were going to be bumpy. Although the S&P 500 keeps moving higher, it has not been the easiest environment to navigate as there have been many challenges. How are investors expected to deal with such a tricky environment? We reiterate the view that a disciplined and process-driven approach should add considerable value to investors and help them avoid being excessively impacted by the near constant noise from news headlines and the potential for emotionally driven responses that are the direct result of day-to-day volatility.

Importantly, our proprietary methodology is still suggesting that investors should keep a medium-term view and focus their attention on the bigger picture that should keep backing the U.S. equity markets for the remainder of the year. The likely tailwinds are the powerful blend of accommodative Fed, the reopening of the U.S. and global economies, and a major corporate profit recovery that is driving considerable strength in our proprietary earnings revisions metrics.

Consequently, our bottom line that is derived from our investment process and the most important factors is for investors to stay bullish, and view tactical pullbacks and volatility as buying opportunities.

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