BlackRock strategist on market jitters: Expect volatility, but stay positive on US equities and this emerging market – Ishares MSCI India ETF (BATS:INDA), iPath Series B S&P 500 VIX Short-Term Futures ETN (BATS:VXX), Franklin FTSE India ETF (ARCA:FLIN), ProShares Trust VIX Short-Term Futures ETF (BATS:VIXY)

Investors, brace yourselves for the rollercoaster ride that is September and October. But before you hit the panic button, BlackRock managing director Gargi Pal Chaudhuri offers reassurance and urges investors not to be alarmed by short-term volatility in US stock markets.

In a recent CNBC article interviewChaudhuri, head of investment strategy for BlackRock's iShares for the Americas, stressed that whether it's small-cap, large-cap or tech stocks, “these months tend to be seasonally volatile, a trend seen over the past decade.”

We analyze the past trend to validate it.

Seasonal market fluctuations: a recurring phenomenon

Above is a chart of the CBOE Volatility Index, also known as VIX — over the past decade. It can be seen that the index tends to gain strength during these two months that Chaudhuri mentioned (taking into account that the extremely high wave in 2020 is due to Covid).

Investors who follow market volatility often tend to book profits through its swings using ETFs such as the iPath Series B S&P 500 VIX ETN Short-Term Futures VXX or the ProShares VIX Short-Term Futures ETF VIXY

Chaudhuri also mentioned that this year, uncertainty surrounding the upcoming US elections is adding to already nervous markets, creating more potential for fluctuations.

Read also: Institutional investors buy the dips after August volatility spike: Wall Street analyst

In the medium and long term? Still, it's promising.

Despite the short-term uncertainty, Chaudhuri remains optimistic about the medium- and long-term outlook for U.S. stocks. He believes high-quality stocks are poised to perform well over the next six to 12 months, especially now that the Federal Reserve is expected to begin cutting interest rates.

Chaudhuri said: “Historically, rate cuts have benefited both stocks and bonds,” adding that he expects the Fed to begin normalizing interest rates later this month with a 25 basis point cut.

India: An Emerging Market Opportunity

But Chaudhuri's focus is not solely on the US. With India's growing influence on the global stage, she believes foreign investors should reconsider their current underweight positions.

“I think investors need to at least get back to baseline weightings with respect to emerging markets (EM) and with respect to India in particular. And I think that's the opportunity,” he said.

While Indian market valuations are at the higher end, Chaudhuri noted that “it’s not just about valuations.” India’s economic potential and growing importance make it a key area for future growth.

Popular ETFs that track Indian stocks include the iShares MSCI India ETF WHATEVERhe WisdomTree India Profit Fund PPE and the Franklin FTSE India ETF ANGRY

Overall, Chaudhuri's message is clear: tackle short-term volatility and focus on long-term opportunities.

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