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Weekly Market Summary
Sep 14 to Sep 18, 2026
Extra Credit*
•ETFs have evolved significantly since the first launch in 1993 as a simple, low-cost way to track the S&P 500. More than 30 years later, ETFs are taking share from mutual funds and expanding rapidly, with more than 1,000 new products launched in 2025 alone. But greater choice has also brought greater complexity: today’s ETF universe includes leveraged single-stock products, high-distribution strategies, and cryptocurrency exposure. The key distinction is that while the ETF structure can offer benefits such as liquidity, low costs, and tax efficiency, the underlying investment strategy can range from straightforward to highly speculative.
•The ETF market is highly concentrated and dominated by passive strategies. The three largest ETFs alone hold 17% of all US ETF assets, while the 20 largest ETFs account for 39%. Although mutual funds still hold more assets overall, flows have shifted dramatically since 2019: mutual funds have experienced persistent outflows while ETF inflows have surged, accelerating ETFs’ gain in market share.
•A new generation of ETFs is moving well beyond traditional passive indexing toward more complex, derivative-driven strategies. Leveraged and inverse single-stock ETFs can amplify gains and losses, while defined-outcome products use derivatives to reshape an investor’s upside and downside exposure. With more than half of upcoming ETF launches designed to modify the returns of individual stocks, the market is becoming increasingly specialized — making strategy complexity, fees, risk, and intended holding periods more important considerations for investors.
Source: MorningStar
ETFs are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of an ETF's shares may trade at a premium or discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact an ETF's ability to sell its shares. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns.
Previous reports
*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Morningstar LSTA US Leveraged Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.
Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.
Any discussion of individual companies is not intended as recommendation to buy, hold or sell securities issued by those companies. Aristotle Fund holdings can be found on the fund pages linked above.
Investors should consider a fund’s investment goal, risks, charges, and expenses carefully before investing. The prospectus and/or the applicable summary prospectus contain this and other information about the Fund and are available from AristotleFunds.com. The prospectus and/or summary prospectus should be read carefully before investing.
Investing involves risk. Principal loss is possible.
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