Inflationary Pressures May Hurt Investment Returns, Says Fund Manager
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Inflationary Pressures May Hurt Investment Returns, Says Fund Manager

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What will 2024 look like for ETFs? Norway’s sovereign wealth fund manager doesn’ t like what he sees.

When considering the landscape ahead for investment, a lot of investors are looking to exchange-traded funds (ETFs), such as the SPDR S&P 500 ETF Trust (SPY) or the Vanguard Total World Stock ETF (VT), to allow for maximum exposure to markets in one handy package. Yet, word from Norway’s sovereign wealth fund suggests that this might not be a great year for markets as a whole. Nicolai Tangen, chief executive officer of the Norges Bank Investment Management service, noted that the group was “…not very optimistic when it comes to returns.”

The inflationary pressure currently facing the market was likely to not only be worse than expected but also stick around for longer, Tangen noted. Tangen also looks for international central banks to repeat their earlier mistakes in the opposite direction, noting that they’ll be “…very, very careful in cutting rates too quickly because they were too slow in putting them up.”

Which ETF is the Best Buy?

Turning to Wall Street, a look at two major ETFs, SPY and VT, shows SPY ahead, at least somewhat. Indeed, it gained 21.44% over the past 12 months and offers a 0.09% expense ratio. In addition, analysts expect another 9.3% upside potential from current levels. Meanwhile, VT produced a 15.01% return, with an expense ratio of 0.07%, and has no analyst price target.



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