Finance
Bonds as protection play against stock market volatility
Investors may want to get back to the basics when it comes to navigating the stock market volatility.
According to F/m Investments CEO Alex Morris, they should consider increasing their exposure to bonds.
“Particularly on the short end of the curve … there’s a lot of safe haven to be had there,” Morris said on CNBC’s “ETF Edge” this week. “If you look at where the equity market is going, you didn’t like the wipeout of a couple of weeks ago — there’s some more banana skins ahead of us.”
His comments came from the site of Miami’s Future Proof conference, where financial advisors and wealth management executives traded ideas and discussed technology, including using generative artificial intelligence.
Morris’ firm provides investors with access to “innovative” strategies, which includes mitigating risks, according to the F/m Investments website.
Morris, who is also the firm’s chief investment officer, sees the economic backdrop and tariff risks as another reason to buy bonds.
“If [DC] policy stays where it is, the short end of the curve is going to be a great place to be,” Morris added.
TCW’s managing director Jeffrey Katz, who also attended the conference, sees benefits in fixed income right now, too. “Bonds are acting as they should in the context of a 60/40 portfolio,” he told “ETF Edge.”
Katz’s firm is behind the TCW Flexible Income ETF, which has been around since November 2018.
TCW Flexible Income ETF Performance
As of Feb. 28, FactSet shows the exchange-traded fund’s top holdings included U.S. Treasury notes yielding above 4%. It is also rated four stars by Morningstar.
Omar Marques | Sopa Images | Lightrocket | Getty Images
EToro, a stock brokerage platform that’s been ramping up in crypto, has priced its IPO at $52 a share, as the company prepares to test the market’s appetite for new offerings.
The company had planned to sell shares at $46 to $50 each.
IPOs looked poised for a rebound when President Donald Trump returned to the White House in January after a prolonged drought spurred by rising interest rates and inflationary concerns. CoreWeave’s March debut was a welcome sign for IPO hopefuls such as eToro, online lender Klarna and ticket reseller StubHub.
But tariff uncertainty temporarily stalled those plans. The retail trading platform filed for an initial public offering in March, but shelved plans as rising tariff uncertainty rattled markets. Klarna and StubHub did the same.
EToro’s Nasdaq debut, under ticker symbol ETOR, may indicate whether the public market is ready to take on risk. Digital physical therapy company Hinge Health has started its IPO roadshow, and said in a filing on Tuesday that it plans to raise up to $437 million in its upcoming offering. Also on Tuesday, fintech company Chime filed its prospectus with the SEC.
Founded in 2007 by brothers Yoni and Ronen Assia along with David Ring, eToro competes with the likes of Robinhood and makes money through fees related to trading, including spreads on buy and sell orders, and non-trading activities such as withdrawals and currency conversion.
Net income jumped almost thirteenfold last year to $192.4 million from $15.3 million a year earlier. The company has been ramping up its crypto business, with revenue from cryptoassets more than tripling to over $12 million in 2024. One-quarter of its net trading contribution last year came from crypto, up from 10% the prior year.
This isn’t eToro’s first attempt at going public. In 2022, the company scrapped plans to hit the market through a merger with a special purpose acquisition company (SPAC) during a sharp downturn in equity markets. The deal would have valued the company at more than $10 billion.
CEO Yoni Assia told CNBC early last year that eToro was still aiming for a market debut but “evaluating the right opportunity” as it was building relationships with exchanges, including the Nasdaq.
“We definitely are eyeing the public markets,” he said at the time. “I definitely see us becoming eventually a public company.”
EToro said in its prospectus that BlackRock had expressed interest in buying $100 million in shares at the IPO price. The company said it planned to sell 5 million shares in the offering, with existing investors and executives selling another 5 million.
Underwriters for the deal include Goldman Sachs, Jefferies and UBS.
— CNBC’s Ryan Browne contributed reporting
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