Exchange-traded funds (ETFs) are here to stay, Dan Draper, head of ETFs at Invesco, said.
The investment product has passed the tests of the bursting dot com bubble, crisis in credit and other extreme time periods. Despite these challenges that ETFs have faced, these have continued to grow, Draper said.
Critics of ETFs believe investing in these funds can result in increased volatility. Jack Bogle, The Vanguard Group’s late founder, said most of the ETF trading was done by many financial institutions that use them to hedge or divide cash reserves among various investors and pour them into publicly traded stocks.
However, Draper maintains that investors are now considering aspects like “quality and low volatility,” mainly when investing in the Invesco QQQ Trust.
Draper aired his comments on the day the QQQ ETF, a notable brand in the industry, celebrated its 20 years of existence. The ETF, commonly referred to as “the Qs,” was launched in 1999 during the peak of the dotcom bubble.
Meanwhile, analysts provided a list of ETFs with the most exposure to Boeing stocks. iShares U.S. Aerospace & Defense ETF has the most exposure at 13% while the SPDR Dow Jones Industrial Average ETF and the Industrial Select Sector SPDR Fund have 11% and 10% exposure, respectively. The leading airplane manufacturer had a sharp decline in shares by more than 13% after it saw it is 737 MAX 8 model recently crashed for the second time in less than five months.
But experts said investors with exposure to Boeing should weigh the news and carry out extensive research.