ETF Edge on how volatility and conflict in the Middle East are reshaping ETF strategies

• Markets have shown resilience despite geopolitical shocks, partly due to strong company earnings and the US's net exporter status for oil and natural gas.
• Hedged equity ETFs and energy/natural resources ETFs are identified as areas of increased investor interest, offering potential for income and diversification.
• Newer, more complex ETF products, especially those with private credit or equity-linked notes, require careful due diligence due to potential liquidity mismatches and increased transaction costs during volatile periods.
• Midterm election years historically show the largest market drawdowns, but also the best 12-month forward returns, suggesting potential 'buy the dip' opportunities in certain oversold sectors like cybersecurity.

The discussion on ETF Edge focuses on how the prolonged Middle East conflict and broader market volatility are influencing ETF strategies. Guests highlight market resilience despite geopolitical shocks, attributing it to strong earnings and the US's position as a net energy exporter. They discuss opportunities in hedged equity and energy ETFs, while also cautioning about potential risks in complex or less transparent new products.