ETF Edge - Novel ways to play against history 10/6/25

Episode Date: October 6, 2025

A historically volatile time for the markets is compounded by even more looming catalysts than usual. We have three plans to help see you through from two of the biggest specialists in their spaces. �� Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The ETF Edge podcast is sponsored by Invesco QQQ, proud provider of access to innovation for the last 25 years. Investco Distributors, Inc. Welcome to ETF Edge, the podcast. If you're looking to learn the latest insights on all things, exchange, traded funds, you're in the right place. Every week, we're bringing you compelling interviews, thoughtful market analysis, and breaking down what it all means for investors. I'm Sima Modi in for Dominic Chu. The fourth quarter off to a volatile start, but we have three game plans to. help you through it. Here's my conversation with Christian Magoon, CEO of Amplify

ETF along with Jay Jacobs, US head of equity ETF at BlackRock. Let's start Big Christian because you noted that the fourth quarter is historically a little bit rocky but it can finish higher despite concerns around the Fed. The government shutdown. What gives you confidence? Yeah well there's definitely kind of this early period of the fourth quarter October that's been the worst month for volatility. But as we get through that fourth quarter, We generally see the best quarter of the year double the average annual return versus the other quarters. And I think, you know, the U.S. consumer and some of the progress that is being made on debt issues here,

even given the shutdown dynamics, should actually get us out of the woods. Bear markets are tough, but oftentimes bull markets crawl up a wall of worry. It seems like one of these wall of worries that's going to dissipate, and we're going to have, I think, a good fourth quarter that's historically 80% of the time positive going back to 1950. It's interesting you mentioned that because, Jay, I was looking at the historical performance of the S&P 500 during past government shutdowns. Market always goes higher. Yeah, I think people are really focused on the long term. What we see in the fourth quarter is a lot of repositioning of portfolios.

A lot of advisors are having conversations with their clients. There tends to be a fair amount of money in motion heading into year end. Right now we still have a tremendous amount of. cash on the sidelines. So we're really looking at that to see how our investors going to deploy that cash as we're at record highs, but also seeing some really positive catalysts with enthusiasm around earnings as well as potentially rate cuts going forward. So you're bullish going into the end of the year as well? I think there's a lot of strong momentum, but we're also just going to see a lot of repositioning of portfolios for people to prepare for 2026.

Christian, one asset that continues to gain a lot of interest is gold. All-time highs as we watch the S&P 500 nearing similar levels. Can this rally continue? Are there other alternative ways to play this? Yeah, this whole debasement trade. Gold is benefiting from the store of value. Also, silver is benefiting as well. Silver's a little different. About half of silver's demand is due to store of value.

The other half is industrial use. And we say industrial use, it's these AI chips, the data centers, batteries, solar panels. And that's really propelled silver to gain over 60% this year. And specifically, we think the silver miners, junior silver miners, SILJ, we have the tick for the only junior silver miners' ETF in the U.S. has gained over 130%. So miners have a leveraged upside. They also have a leveraged downside. We see silver going

from the high 40s to into the 60s over the next 12 months. We're in the sixth year of limited supply in silver, and the trends from an industrial standpoint are only getting more bullish for silver. So we like this as a way to kind of hide out or maybe profit during times of uncertainty. Jay, whether it's gold or silver, what products do you think are ways to capitalize on this rally? Well, we've seen a tremendous amount of flows into IAU, which is the I shares gold trust ETF. We've also seen significant flows into SLV or physical silver product, but there's a lot of interest in Bitcoin as well. I think a lot of this is really a trade around looking at global monetary alternatives, non-sovereign assets that could potentially be a store of value, but really

are going to behave very differently from stocks and bonds. If we continue to see, you know, geopolitical uncertainty, continue to see inflation uncertainty. People are looking for assets that live outside of the traditional system. That can be a bit of a portfolio diversifier. And walk me through the IVV that's a two-laddered buffer product. How does that work? Yeah, so IVVM is our moderate buffer ETF. It just changed into a laddered strategy. So basically every month, it's going to be rolling out of one quarterly buffer position into another. This creates more of a kind of a smoother their ride for investors who are looking to have hedged exposure to the S&P 500. They get some measure of downside protection, about 5% on the downside on a quarterly basis,

and they're getting that by capping some of their upside exposure as well. So going back to those people on the sidelines, that's $7 trillion of assets held in money market funds. People who are looking to get invested but want to have guardrails, a little bit of protection getting into the markets, IVVM can be a great tool to do so. Let's also turn to one of the fastest growing parts of the ETF ecosystem, and that is income, you both have products for investors looking for that as well. Christian, you have D-I-V-O, QD-V-O, and IDV-O. What are these products? Yeah, these are actively managed stock portfolios, either international for IDVO, growth-oriented for Q-D-Vo, or just U.S. Blue

Chip for Devo. And the active approach there selects the stocks, but then has the ability to tactically write covered calls on those individual stocks. So what that does is increase income potential, but doesn't limit your upside in terms of capital appreciation. So equity derivative income, ETS have been very popular. The knock against them is that they don't have a great total return. They have this very nice yield, but they fail to have capital appreciation. Our approach, we call it the yield smart approach, really balances capital appreciation with attractive income.

We've compared favorably to many products in the space. Always trying to find that balance, right? That's right. Jay, you've been looking at the large cap covered call strategy, but you acknowledge that. the potential downside to covered calls. So how do you square that? Well, just as Christian was saying, people want income, they want growth.

They want their cake and tea to two. One way to get this exposure is to have actively managed U.S. equity large cap exposure, which we have on our Bali ETF, but it is writing out of the money indexed covered calls to generate income. But the other twist here is oftentimes with these strategies, if you're writing covered calls, you're limiting your upside. We're able to do what's called futures hedging, which effectively allows you to maintain exposure to the SME.

P 500 as it rides its way up. So for investors who want that income, they also want the upside, most of the upside, this can be a really good strategy for getting both. So much of the rallying the S&P 500 this year has been focused on technology, whether it's large cap, midcap. But looking at other ways to play this tech rally, Jay, you have two new ways that you've been sort of looking for new talk of deployment, slowing power concerns and so forth us when talking about artificial intelligence. How does that trickle through to the ETF universe? Well, one of the One of the biggest trades we're seeing this year is simply people leaving the traditional tech sector and getting more granular into AI-specific ETFs like VAI from BlackRock.

This is an actively managed strategy run by our portfolio manager, Tony Kim, and he's looking across the entire value chain of artificial intelligence stocks. So think about the layer of digital infrastructure, from semiconductor manufacturers to data owners to large language model developers to products that are utilizing artificial intelligence. He has a lot of latitude to see where the value is in the artificial intelligence value chain. So this is a big moment, I think, for the industry, because for so long, people like to divide the market by sectors. We're seeing when you have these really powerful but more targeted themes like artificial intelligence,

you have to get more granular than just using a sector tool. You have to use really a thematic ETF to capture it. Speaking of thematic and other ways to play technology, there's crypto. And Bitcoin has done exceptionally well this year, Christian. But there's also more focus these days on stable coins, tokenization. There was even a report last week that the SEC was examining, letting, stocks trade on the blockchain. What's your thoughts on this? Yeah, we think that's coming, and it's going to be very disruptive. It's going to create efficiencies in terms of cost and time

for investors. So we think this is going to be a great thing and really bring capital markets into this next century. And we think blockchain is the way to do it. There's a variety of use cases around blockchain, whether that's stable coins for payments. The Genius Act happened this year, or its tokenization of assets, which could happen with real estate. stocks. We think this is a major theme that's going to impact not only technology, but also FinTech and, of course, the crypto community. We have our block ETF. We've been out since 2018, which is actively managed buying blockchain and crypto equities. It's average 20% a year return since 2018. We're a pioneer in that space. We think the upside is going to continue,

especially given the current administration and some of the regulatory moves we're seeing from exchanges as well as large capital market players. Yeah, this administration has been widely supportive of crypto. Jay, what are your thoughts on the best way to play this? Well, I think a lot of what you've been saying, the rise of stablecoins, the rise of tokenization and more enthusiasm around blockchain technologies, that often leads back to Ethereum. So there's a big difference between Ethereum and Bitcoin.

Bitcoin is really this global monetary alternative, more similar in vain to the gold story. But Ethereum is really a bet on blockchain technology and other ways to use it through things like stable coins and tokenization. So this enthusiasm has really trickled through to a lot of interest and flows into our ether, ETF, which is a spot Ethereum. ETF as people want to play this potentially very disruptive theme. That does it for ETF Edge, the podcast. Thanks for listening. Join us again next week or head to etfedge.cbcbc.com. How does InvescoQQQQ rethink possibility? By rethinking access to innovation and the NASDAQ 100. Let's rethink possibility. Invesco Distributors, Inc.