ETFs booming toward $25 trillion.
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According to the article InvestmentNews , ETFs are booming toward $25 trillion by 2030. Now, because of the US-Iran conflict, can my "diversified" ETFs, filled with big tech companies and energy stocks, actually increase my losses during market fear, leaving me vulnerable when I need safety the most?
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You raised a very good question: "Diversification" can sometimes be a double-edged sword. Citigroup expects ETFs to reach $25 trillion by 2030, but the ongoing US-Iran conflict highlights that having a mix of tech and energy investments isn’t always a safe choice.
We have already observed a spike in correlation so far. Therefore, safety means adding bonds, gold, or global assets to reduce correlation.
In the case of ETFs, many people are turning to Minimum Volatility (USMV) or Consumer Staples (XLP) ETFs to feel secure during these times of market anxiety, as they focus on basic necessities that people tend to buy no matter what is happening in the world.
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