0:09
SEC Requests Public Comment on Some of Wall Street’s Wildest ETFs
Just because it can go in an ETF doesn’t mean it should.
The Securities and Exchange Commission is opening a public comment period to discuss “innovative” or “novel” exchange-traded funds after a whirlwind of product development in recent years, both here and abroad. In a statement Tuesday, the agency said the 60-day comment window will help foster innovation, but also protect investors and the markets, and the comments could eventually factor into future regulations. The sheer number and diversity of products entering the market has made it harder for advisors to determine which ETFs belong in client portfolios, while clients can also be confused by products that raise the prospect of outsized returns.
“The ETF industry is innovating at a pace that regulators are struggling to keep up with,” a spokesperson for the ETF Institute told ETF Upside. “The SEC recognizes that the current regulatory framework for bringing ETFs to market may need to evolve to better protect investors, issuers and the agency itself.”
Much of the innovation is coming from active ETFs, which have exploded in popularity over the past few years:
- Assets in active products reached nearly $400 billion by the end of 2025, according to FINTRX data.
- However, they accounted for roughly 80% of new launches.
“The commission’s request for comment seeks input from the public on how the US ETF market can continue to grow and innovate while serving investors effectively, and I look forward to reviewing feedback,” SEC Chairman Paul S. Atkins said in the release.
However, Bill Singer, a veteran Wall Street regulatory lawyer, is highly skeptical about Atkins’ message, suggesting the pace and scale of innovation in the ETF industry has driven some issuers to create “absurdly silly and questionable” products. He thinks the SEC’s comment request affords an opportunity for the regulator to wash its hands of core responsibilities and gives its leadership cover from Congressional scrutiny should leveraged products create systemic problems or even an eventual “meltdown.”
“Cynically, I suspect that the SEC wants to foster the impression that it is laboring under the so-called ‘gatekeepers dilemma,’ needing to balance innovation with protection,” Singer said. “The reality is that Atkins is a very savvy industry veteran who likely already knows what he would like to promulgate.”
Feeling Some Regret? The SEC’s comment request comes a few weeks after South Korea’s top financial regulator said that he has “regrets” about allowing leveraged single-stock funds to trade in the country, warning that the products can lead to significant volatility. The official also cited concerns regarding leveraged funds that track high-flying AI stocks, particularly for non-professionals.
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3:16
What’s a Better Omen for Beer Sales Than Constellation Brands’ Earnings? The World Cup
Scotland soccer fans may have drunk Boston dry recently, but beer enthusiasts in general don’t seem to have regained their old buzz.
At least, that’s what Constellation Brands’ latest earnings would lead you to believe. The alcohol giant, which is the US importer of the popular Modelo and Corona beers, reported net sales of $2.43 billion in its fiscal first quarter, below the $2.52 billion from a year earlier (but higher than the $2.39 billion analysts had expected). However, its profit was $653.8 million, up from $516.1 million a year earlier.
Constellation Brands’ results offer insight not only into the US beer industry at large but, more specifically, premium imported beer. Its Mexican beer portfolio accounts for most of its revenue. While Constellation experienced weaker demand last year from its Hispanic customers, those figures started to rebound in the fiscal fourth quarter, the company said in April.
But its business model means that sales aren’t all that matters. Aluminum prices recently hit a four-year high amid the war in the Middle East, causing headaches for manufacturers of cars, building materials and, of course, beer. Investors and analysts will likely be listening for any comments from company leaders during this morning’s post-earnings call on margins and whether the popularity of brands like Modelo will be able to offset pressures.
The alcohol industry could use some good news. It’s been a bad few years for bars as demand for alcohol took a dive (pun intended). Last year, a Gallup survey found that the percentage of adults who say they consume alcohol hit an all-time low of 54% amid health concerns, higher costs of living and a generational shift that has younger generations less interested in drinking.
But when it’s time to celebrate (or commiserate), people still make it to the bar. The World Cup proves that:
- As of the week ending June 20, which includes the first 21 US-hosted matches, on-premise beer sales are up 5.5% nationally as people gather, according to data the Beer Institute shared with The Daily Upside. (The dataset captures 88.1% of total US beer industry volume.)
- On-premise beer sales specifically in World Cup host markets have climbed 15.4% year-over-year.
Gas or Beer? Constellation CEO Nicholas Fink and CFO Garth Hankinson suggested that the sharp surge in gas prices could be keeping Americans from the beer aisle. “While we saw a resurgence of purchasing behavior amidst a more normalized start to the quarter, these financial pressures then drove a more discerning and value-conscious consumer mindset, most notably within lower-income households, contributing to a deceleration in retail food and beverage volume trends as the quarter progressed,” they said.
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6:25
Dronemaker AeroVironment Climbs 19% as Pentagon Races to Expand UAV Fleet
For a company whose name sounds like a painfully eco-conscious chocolate bar, AeroVironment had a pretty tasty Tuesday.
Shares in the dronemaker (not candymaker) closed up 19% as an earnings report that blew away Wall Street’s forecasts marshaled a fierce rally. It couldn’t have come at a better time.
AeroVironment had a rough few innings leading into its quarterly report. Earlier this year, the US Space Force canceled a $1.7 billion contract for the firm to supply high-tech antennas for military satellites, prompting a 17% plunge for the stock. (On Tuesday, securities law firm Bleichmar Fonti & Auld said a class action suit has been filed alleging AeroVironment was not forthcoming about the “significant likelihood” of competition for the contract; AeroVironment didn’t reply to a request for comment.)
Last month, AeroVironment disclosed an $89 million accounting error that impacted its reporting for the nine months leading to January 31, adding its earnings reports for that period “should no longer be relied upon.” This week came the relief: AeroVironment reported Monday that revenue in its latest quarter more than doubled year-over-year to $642 million, a supersonic leap beyond Wall Street’s $556 million projection. Net income more than tripled to $63.2 million, or $1.25 per share. While its full-year sales forecast of $2.2 billion was slightly below what analysts had hoped, many remain convinced that AeroVironment is a worthy investment. It makes offensive and defensive drones, which conflicts in Ukraine and Iran have highlighted as critical weapons of modern warfare, as well as energy weapons and space comms equipment through its acquisition of BlueHalo last year. Even though it lost the Space Force contract, a government-backed windfall could be in store:
- The White House requested $67 billion in supplemental military funds to cover costs for the conflict in Iran and is seeking an unprecedented $1.5 trillion defense budget for the 2027 fiscal year.
- The budget follows up on an executive order in which the White House ordered the US to expand military drone manufacturing.
Domino Drone Effect: On Tuesday, dronemakers Kratos and Red Cat rose 6.2% and 3.2%, respectively, while drone components supplier Unusual Machines rose 16%, no doubt because investors were encouraged by AeroVironment’s big sales number. As for AeroVironment, the average target price out of 18 analysts is $251, implying a 50% upside. Life is a box of chocolates if you’re in the drone-making business.
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9:19
AOL Logs Back On to Public Markets Under Quirky New Name
If any sequence of sounds captures the 1990s, it’s a cacophony of screeches and beeps that’ll make any dog tilt its head, followed by AOL’s iconic, “You’ve got mail.”
Just like bucket hats and baby tees, ’90s staple AOL is making a bit of a comeback. The once-dominant dial-up internet provider is headed back to the Nasdaq today under its parent company Bending Spoons, a Milan-based firm that bought AOL in January.
Bending Spoons hopes to raise more than $1.6 billion in its US IPO for a top-end valuation of nearly $19 billion. The debut will test investors’ appetite for software at a time when AI is the shiny, new toy.
Building the Buddy List
Bending Spoons has acquired more than 50 companies since its 2013 founding, scooping up familiar brands including video platform Vimeo, file-sharing service WeTransfer and ticket seller Eventbrite. Bending Spoons is behaving like “Property Brothers” for old-school internet properties, buying and revitalizing companies it thinks have untapped potential.
The company has a rinse-and-repeat approach:
- Buying Spoons is known for squeezing revenue from its acquired companies by cutting employee headcount, sending in its own engineers to overhaul platforms and raising prices. Earlier this year, Vimeo reportedly laid off most of its staff, including its entire video team, in the second round of layoffs since Bending Spoons took over. Previously, Bending Spoons gutted three-quarters of WeTransfer’s employees.
- The ruthless strategy has yielded small profits: After a loss of $137,000 last year on $2.6 billion in revenue, Bending Spoons netted $28 million in first-quarter earnings from sales of $601 million. It’s also bringing $4.4 billion in debt it’s used to finance deals into its IPO.
Big Spoon: Bending Spoons wants to keep buying companies, with CEO Luca Ferrari saying in 2024 that the firm had more than 5,000 companies in its consideration pipeline. Former employees and customers of the beloved and nostalgic companies Bending Spoons has bought have vented frustrations about the firm’s sweeping changes. The Italian company may find out how far it can bend spoons before they break.
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11:47
Global ETF Assets Hit Record $23T in May
Call ‘em Bruce Springsteen because they’re born to run.
Exchange-traded funds surpassed $1 trillion in inflows globally at the end of May, a breakneck pace that pushed global assets to a record $23 trillion, according to data from ETFGI. Coming off a record-breaking 2025 for launches, inflows and assets under management, hitting the $1T milestone not even halfway through the year indicates that despite global uncertainty, the asset class isn’t slowing down. Much of that growth has come from a small number of massive funds, said Deborah Fuhr, managing partner and cofounder of ETFGI. Only about 1,600 funds have more than $2 billion in assets, but they account for about 85% of total assets. “We have a very small number of big ETFs, but big is generally, say, over $2 billion,” she said. “Being over a trillion is a huge milestone.”
Heavyweight Champs
Shocking no one, the heavy hitters are still the low-cost index funds from the industry’s biggest names:
- The Vanguard S&P 500 ETF (VOO) leads the pack, with $58.8 billion in net flows so far this year, according to data from ETF.com. The iShares Core S&P 500 ETF (IVV) isn’t far behind, at $55.7 billion.
- The State Street SPDR Portfolio S&P 500 ETF (SPYM) comes in third, with $43.5 billion in fund flows in 2026.
- The Vanguard Total Stock Market ETF (VTI) and the SPDR Portfolio S&P 500 ETF (SPLG) round out the top five, with $31.7 billion and $29.5 billion, respectively.
Under the Big Top. With so many new products being launched, investors’ ETF usage is changing. “The tent has expanded to a lot more than just long-only passive investing,” said James Seyffart, an ETF analyst for Bloomberg Intelligence. “There’s a feeding frenzy for anything related to AI, semiconductors, space, you name it … as the market’s going up, we tend to see more money come into ETFs as a whole, but even when the market goes down, money still tends to come into the industry.”
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13:59
Leveraged ETFs Are Booming, But Are Advisors Buying?
The leveraged ETF market is awash with new products, targeting everything from crypto to AI and semiconductor manufacturing.
Advisors aren’t always impressed, however. Although leveraged ETF assets doubled to $220 billion from March 30 to June 3, advisors and broker-dealers face restrictions on recommending the products to their clients. Advisors have to understand their risks, make sure they align with clients’ best interests and not buy too many of them, per FINRA rules. That’s because leveraged funds can often lose significant amounts of money in flat markets since they reset daily. And sometimes those advertised yields don’t match client expectations, experts said. Advisors will want to educate themselves on new products as the ETF industry continues to innovate.
“I spend a lot of time pulling clients out of products that looked brilliant going in and quietly cost them later, and leveraged ETFs sit near the top of that list,” said Jeff Judge, a founding partner and CFP at Chesapeake Financial Planners. “For most people, the risk swamps the reward.”
Although institutional investors are one of the forces behind the recent surge in demand for leveraged ETFs, there has also been strong interest from individual investors. The top financial regulator in South Korea, which had its own leverage-induced volatility scare earlier this month, said last week that over 90% of the products are held by retail investors.
“From an advisor’s perspective, leveraged ETFs are tools for trading, not vehicles for investing,” said Scott Bishop, partner and managing director at Presidio Wealth Partners. “The key risk is that many investors misunderstand what they actually own.” Some assume that a 2x leveraged ETF will net double the yield, but most leveraged funds are designed to deliver multiples of an index’s daily return, not its long-term return, he added. “Over time, daily resets, compounding, volatility drag, tracking error, and — in futures-based products — dynamics like contango and backwardation can cause returns to diverge meaningfully from what an investor expected.”
The dangers are evident in some recent leveraged product downswings:
- The Direxion Daily MSCI South Korea Bull 3X ETF (KORU) fell 42% in a single day earlier this month.
- The Defiance Daily Target 2X Long MSTR ETF (MSTX) and the T-REX 2X Long MSTR Daily Target ETF (MSTU), which track the bitcoin treasury company Strategy, are both down about 95% year to date.
What’s the Use (Case)? That’s not to say leveraged products aren’t useful. For traders with a short-term time horizon, or for sophisticated investors who can monitor their holdings closely and exit when necessary, they may fit the bill. But Bishop said most buy-and-hold investors, and his own clients, don’t fall into that category. Judge agreed: “If they insist, the only responsible way to hold it is a small satellite position with a defined exit [and] money they can lose entirely, never income they rely on, and never the core.”
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17:19
The Return of the 58k Gang
G’day Folks,
For those who were not around last cycle, there was an army of folks who bought their first slugs of Bitcoin around $58k during the two rounded tops in the 2021 bull cycle.
Folks who top blasted $58k in the last cycle wear their buys as a badge of honour, and rightfully so. They survived the brutal decline of the 2022 bear, and learned a tonne of lessons about themselves along the way.
It is a tremendous life experience to watch your net worth plummet by over -70%. It forces you to either come to terms with what you own and why through rigorous study…or to capitulate everything when the pain gets too much.
Here we are, five years later and the $58k gang rides once again.
As you can probably imagine, the market conditions at $58k in 2026 are vastly different to those at the stimulus fuelled tops in 2021. Today’s report will be an analysis of how the market is reacting to the market probing the bear cycle lows, and why my expectations are in the weeks and months ahead.
Upgrade below to access today’s Video Update and TL;DR Summary.
18:32
Freemium: Beyond Transformers: The Quest for Next-Generation Foundation Models
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Hello!
Welcome to today’s edition of Business Analytics Review!
I’m glad you’re joining me as we dive into one of the most exciting frontiers in AI right now. If you’ve been following the rapid evolution of foundation models, you know that Transformers have been the undisputed kings for years. But cracks are showing in the foundation, and a new generation of architectures is emerging to address them.
Today’s topic: Beyond Transformers: The Quest for Next-Generation Foundation Models, with a focused look at physics-inspired models like Mamba and the real limitations of current Transformers. I’ll walk you through why this matters for business analytics, the technical nuances, industry implications, and what’s on the horizon. Let’s make this practical and insightful because understanding these shifts can give your organization a real edge in efficiency, scalability, and innovation.
When the Transformer architecture burst onto the scene in 2017 with “Attention Is All You Need,” it changed everything. Self-attention allowed models to weigh the importance of different parts of a sequence simultaneously, enabling parallel training and capturing long-range dependencies far better than recurrent networks. This powered GPTs, BERT, and countless foundation models that now drive everything from chatbots to code assistants and multimodal analytics tools.
In business contexts, Transformers excel at tasks like natural language processing for customer sentiment analysis, document summarization, predictive maintenance from time-series logs, and even generating insights from vast datasets. Their strength lies in flexibility and expressiveness every token can theoretically attend to every other token.
But as models scale and real-world demands grow (think hour-long video analysis, massive financial transaction histories, or enterprise knowledge bases with millions of tokens), limitations become painfully apparent.
Key Limitations of Transformers:
Quadratic Computational Complexity: Self-attention scales as O(n²) with sequence length n. Training and inference get exponentially more expensive for long contexts. Memory usage balloons, making deployment on anything but high-end hardware challenging. For businesses dealing with long documents, extended conversations, or high-frequency sensor data, this translates to higher costs and slower responses.
Context Window Constraints and Diminishing Returns: Even with clever engineering (like sparse attention or efficient variants), extending context windows has limits. Performance gains plateau, and models can struggle with “needle in a haystack” retrieval in very long sequences. Anecdotally, users notice hallucinations or forgotten details in extended interactions.
Compositionality and Reasoning Challenges: Recent theoretical work highlights deeper issues. Transformers can struggle with function composition (e.g., multi-hop reasoning like identifying a grandparent in a family tree) for large domains, contributing to hallucinations. They’re great at pattern matching but less inherently suited for certain structured, compositional tasks without massive scale or additional techniques.
Resource Intensity and Environmental Impact: Training and running large Transformers demand significant compute, leading to high carbon footprints and accessibility barriers for smaller teams or edge deployments. In business analytics, this means not everyone can afford cutting-edge capabilities.
Other Nuances: Sensitivity to data quality, black-box interpretability issues, and challenges with rare events or highly sensitive tasks where small input changes drastically affect outputs. Edge cases in production like real-time analytics on streaming data expose brittleness.
These aren’t just academic gripes. For a business analyst processing quarterly reports spanning thousands of pages or an operations team monitoring IoT data over weeks, these limitations hit the bottom line: slower insights, higher costs, and missed opportunities.
I remember chatting with a colleague at a fintech firm who described spending a fortune on GPU hours just to handle longer context for fraud detection sequences. They were hitting walls until alternatives started showing promise.
Here’s where it gets exciting. Researchers are drawing inspiration from physics, control theory, and continuous dynamical systems to create more efficient sequence models. Mamba, introduced in late 2023 by Albert Gu and Tri Dao, is a standout.
23:36
India’s $2 Billion State Stake Sales Buck Equity Market Slowdown
$2 billion. India’s federal government pulled that amount from stake sales in listed state‑run firms last quarter, giving the market a modest lift.
The cash came as the broader equity issuance slowed after the Middle East conflict, leaving the capital market unusually quiet. By selling stakes, the treasury added liquidity without needing fresh borrowing.
Those sales were part of a steady‑state approach to monetize assets, spreading the proceeds across a few large enterprises rather than a single blockbuster deal. It’s a practical move that steadies the fiscal picture.
Overall, the figure shows the government can still tap markets for funding, even when new equity issuance is muted.
24:27
Grief has entered the workplace. Here’s what leaders can do
Up until recently, most leaders believed grief belonged outside the workplace. If someone experienced a loss, they may have received flowers, condolences, a few days of bereavement leave, and were quietly expected to return to normal. Most other forms of loss went unnamed entirely, and it was back to business as usual.
That framework no longer reflects reality. Today’s leaders are guiding teams through layoffs, restructures, AI disruption, and the erosion of stability that employees once relied on. People are grieving careers they thought they would have, workplace cultures they no longer recognize, and professional identities threatened by automation. A layoff creates grief not only for the people who lose their jobs, but for the colleagues who remain, including the leader.
Most organizations do not call this grief—and even more still reward people for pretending they’re unaffected—but employees feel it anyway, and so do the leaders charged with holding everything together.
Skeptics might argue that the workplace is not the place to process emotions— that work is for work, and therapy is for therapy. However, the data tells a different story. The Centers for Disease Control estimates that unsupported grief costs U.S. companies up to $225.8 billion annually in lost productivity. Leadership does not pause for grief, but grief will absolutely pause your business.
In my work as an executive leadership coach and advisor, I see this hidden weight regularly. Leaders tell me they feel immense pressure to project steadiness while privately carrying uncertainty themselves. They are expected to reassure teams during layoffs and navigate rapid technological change, all while wondering whether their own expertise will eventually become obsolete.
New research from the Center for Creative Leadership makes the “humanity” gap explicit: 73% of managers report they have received no preparation to support grieving employees. The same research found that one in five bereaved employees received little or no support from their manager, not because leaders lacked care, but because they lacked practice.
This humanity gap shows up in predictable patterns; leaders who want to do the right thing, but do the opposite due to a lack of training. They minimize grief, treating loss as “just business,” project false optimism, or become avoidant, retreating into silence and hoping the discomfort passes. Each of these responses isolates the people carrying the weight and, over time, fractures psychological safety and trust within the team.
So what does grief-informed leadership actually look like?
One of the most persistent misconceptions about grief-informed leadership is that acknowledging loss requires leaders to absorb everyone’s pain or fix an unsolvable problem. It does not.
People do not need perfect words or solutions; they need honest ones. Grief grows in silence.
Acknowledge the departure of colleagues, and name the shift in team culture. In practice, this can sound as simple as opening a team meeting with: “I want to acknowledge that losing three colleagues to layoffs has changed how this team feels, and that is worth naming.” Naming it gives people permission to process what they are experiencing without fear. As I often tell the leaders I work with, what we do not name, we cannot support.
Transition researcher William Bridges observed that it is not the change itself that undoes people, but the transition.
Change is an external event that leaders can move people through relatively quickly: a layoff, a restructure, or a new strategic direction. Transition is the internal experience of that event, and it takes considerably longer to release or even accept.
Before demanding enthusiasm for a new organizational direction, honor what is ending. This can sound like opening a meeting with, “Before we talk about where we are going, I want to take a moment to acknowledge what we are leaving behind.” This opening grants employees permission to process the past so they can move forward into the next chapter. When the past is treated with respect, it provides the psychological bridge employees need to genuinely commit to what comes next.
“Take all the time you need” may be kind, but it rarely translates into practice. When someone is grieving, they are rarely able to tell you what they need. Grief affects concentration, memory, and judgment, often longer than anyone expects.
Rather than waiting to be asked, leaders can make deliberate, temporary adjustments to support the grieving employee, such as shifting a deadline, redistributing a critical task, and checking in before an important deliverable is due. The gesture communicates: I see what you are carrying, and I am going to support you.
In a world where disruption has become the baseline, the leaders who build the deepest trust will not be the ones who avoid hard realities.
