June snapshot

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July 14, 2020

Every day in the news we hear about the creation of new products or industries based on innovations in technology, old businesses being disrupted and new ways of doing business. Yet for most of us, investing in such trends, ideas and events is less than straightforward. Exchange traded funds (ETFs) may be a vehicle, which can offer exposure to innovative companies that can potentially impact our world. Here we consider some of the major trends making headlines today.

1New York Times: An Epic Reversal of Fortune. July 1, 2020. 2Barron’s: Stocks Close Higher as Best Quarter in Decades Comes to an End. June 30, 2020. 3 CNBC: Record jobs gain of 4.8 million in June smashes expectations; unemployment rate falls to 11.1%. July 2, 2020. 4AP News: US unemployment falls to 11%, but new shutdowns are underway. July 2, 2020. 5Washington Post: The U.S. economy added 4.8 million jobs in June, but fierce new headwinds have emerged. July 2, 2020. 6CNBC: Oil rises on U.S. crude stockpile draw, global manufacturing activity. June 30, 2020. 7World Oil: Norway sets oil export records as OPEC+ cuts leave a void in the market. June 29, 2020. 8CNBC: Oil slips 1% on demand worries, but posts best quarter in nearly three decades. June 30, 2020. 9Bloomberg: Sweden’s Currency Has Biggest Rally in About a Decade. June 1, 2020. 10Nasdaq: June 2020 review and outlook.

Substance on Stocks

“We have long talked about how disruption permeates a broad range of sectors. At the epicenter of this disruptive shift is technology, which has undergone profound change over the last two decades, as the hype of the dot-com era has finally come to fruition. This has been reflected in the share-price performance of some of the leading technology names.”

Catherine Doyle, Investment Specialist on Newton’s Real Return Team.

Unpacking Unemployment

“The US added more jobs in June than expected sending the unemployment rate down 2.2% to 11.1% (12.5% expected). Despite the improvement, trends and levels in initial jobless claims portray a labor market rebound that is slowing.”

The Global Investment and Economics Analysis team at BNY Mellon Investment Management

On Oil

Crazy for Currencies

“Asian FX led the gains in H1 2020 on initial signs of V-shaped recoveries taking hold in the region. And in June, emerging markets currencies gained against the USD. Gains were led by Asian currencies such as the South Korean won, Thai baht, and Indonesian rupiah as Asian economies showed early signs of rebounds.”

The Global Investment and Economics Analysis team at BNY Mellon Investment Management

S&P 500: A stock market index that measures stock performance of 500 large companies listed on the stock exchanges in the United States. Dow Jones Industrial Average: A stock market index that measures the stock performance of 30 large companies measured on stock exchanges in the United States. US Dollar index: An index of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of US trade partners’ currencies.

Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. To obtain a prospectus, or a summary prospectus, if available, that contains this and other information about a fund, contact your financial advisor or visit im.bnymellon.com. Please read the prospectus carefully before investing.

ETF shares are listed on an exchange, and shares are generally purchased and sold in the secondary market at market price. At times, the market price may be at a premium or discount to the ETF’s per share NAV. In addition, ETFs are subject to the risk that an active trading market for an ETF’s shares may not develop or be maintained. Buying or selling ETF shares on an exchange may require the payment of brokerage commissions.

ETFs trade like stocks, are subject to investment risk, including possible loss of principal. The risks of investing in the ETF typically reflect the risks associated with the types of instruments in which the ETF invests. Diversification cannot assure a profit or protect against loss.

Bonds are subject to interest rate, credit, liquidity, call and market risks, to varying degrees. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes and rate increases can cause price declines. High yield bonds involve increased credit and liquidity risk than higher rated bonds and are considered speculative in terms of the issuer’s ability to pay interest and repay principal on a timely basis. Equities are subject to market, market sector, market liquidity, issuer, and investment style risks to varying degrees. Small and midsized company stocks tend to be more volatile and less liquid than larger company stocks as these companies are less established and have more volatile earnings histories. Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.

Currencies are can decline in value relative to a local currency, or, in the case of hedged positions, the local currency will decline relative to the currency being hedged. These risks may increase fund volatility. Commodities contain heightened risk including market, political, regulatory, and natural conditions, and may not be appropriate for all investors.

Past performance is no guarantee of future results.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular investment, strategy, investment manager or account arrangement. Please consult a legal, tax or financial professional in order to determine whether an investment product or service is appropriate for a particular situation.

Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. This information contains projections or other forward-looking statements regarding future events, targets or expectations, and is only current as of the date indicated. There is no assurance that such events or expectations will be achieved, and actual results may be significantly different from that shown here. The information in this presentation is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.

Newton” and/or the “Newton Investment Management” brand refers to Newton Investment Management Limited. Newton is incorporated in the United Kingdom (Registered in England no. 1371973) and is authorized and regulated by the Financial Conduct Authority in the conduct of investment business. Newton is a subsidiary of The Bank of New York Mellon Corporation. Newton is registered with the SEC in the United States of America as an investment adviser under the Investment Advisers Act of 1940. Newton’s investment business is described in Form ADV, Part 1 and 2, which can be obtained from the SEC.gov website or obtained upon request.

BNY Mellon Investment Management is one of the world’s leading investment management organizations and one of the top U.S. wealth managers, encompassing BNY Mellon’s affiliated investment management firms, wealth management organization and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the Corporation as a whole or its various subsidiaries generally. BNY Mellon ETF Investment Adviser, LLC is the investment adviser and BNY Mellon Securities Corporation is the distributor of the ETF funds, both are subsidiaries of BNY Mellon.

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