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.

May Outlook

The S&P 500 continues to power higher despite the ongoing worries that appear to be growing from some vocal growling bears. We have commented in our previous updates that the ongoing rally is certainly “Climbing the Wall of Worry”. Now we are entering a period that has been referred to as “Sell in May and Go Away”, which only gets bearish forecasters and investors even more anxious.

We are well aware of the historical track record that does indeed show that the period from May till the end of October has provided lower returns than the November to April period. Nevertheless, we do not change our recommendations based on the flip of the calendar alone. Our research still strongly portends good investment returns and a lot of opportunities to avoid expected laggard areas and have healthy exposures in outperforming parts of the equity market.

We fully agree with a famous investing quote that states, “Be fearful when others are greedy and greedy when others are fearful,” and we see some fear out there in the marketplace.

Based on our research, we at FSI firmly believe that active management of portfolios can beat passive strategies over time if one employs disciplined data driven approaches to investing. It may not be easy, and everyone may not be able to achieve this, but our work suggests that it is clearly obtainable. Though, it does take restraint and patience.

With that being said, it has been our expectation that the early parts of 2021 were going to be bumpy as we presented in our outlook publication from January. And thus far, the year has been full of challenges. How are investors expected to deal with such a tricky environment? We maintain the view that a disciplined process driven approach should add considerable value to investors and help them avoid being overly impacted by the continual noise from news headlines and emotional responses that are the direct consequence of day-to-day volatility.

Notably, our proprietary investment process continues to recommend that investors should retain a medium-term view and keep their eyes on the bigger picture that should keep supporting the U.S. equity markets for the remainder of the year. The tailwinds that should help fuel continued equity gains should come from the powerful combination of accommodative Fed policy, the reopening of the U.S. and global economies, and a major corporate profit recovery that is driving considerable strength in the earnings revisions backdrop. Thus, our bottom line that is derived from our methodology and key indicators is to remain bullish, and view tactical pullbacks and volatility as buying opportunities.

You are trying to access FSI member-only content.
You need to have an active subcription in order to read this article.
If you are already a member at FSInsight, please Sign In here. If you don’t have a subscription to FSInsight yet, you can sign up below.

Choose one of our yearly plans to save nearly 20%

We accept crypto via BitPay for yearly subscriptions.
    • Macro
      FSI Macro
      billed anually
      Get access to all the macro research on FSInsight
      • Tom Lee's First Word
      • View from Tom Lee
      • Signal From Noise
      • Portfolio Strategy
      • Technical Analysis
      • Granny Shots – Stock Ideas
      • US Policy
      • Live Conference Calls with Q&A
      First Month Free!
    • Crypto
      FSI Digital Assets
      billed anually
      Get access to all the crypto research on FSInsight
      • Crypto Blasts
      • Tom's Take on Crypto
      • Crypto Weekly Newsletter
      • BitDigest Daily Newsletter
      • Crypto Technical Analysis
      • Benchmark Indices Review
      • Bitcoin Valuation & Misery Indexes
      • Live Conference Calls with Q&A
      First Month Free!
    • Macro + Crypto
      FSI Pro
      billed anually
      Get access to all the exclusive research on FSInsight
      • Looking at code?
      • I am hidden!
      • FSI Macro
      • +
      • FSI Digital Assets
      • Designed by
      • HANGAR115
      • -
      First Month Free!
FSInsight logo
150 East 52nd St, 3rd Floor, New York, NY 10022

Subscribe to our Free Weekly Report

An insitutional-grade report delivered to your inbox every week.

© 2021 FSInsight. All rights reserved. Developed by HANGAR115.

Illustrations by Karl Wimer.