State Street: Geopolitics, gold, and income are driving advisors’ ETF strategies

The volatile geopolitical environment has seen advisors seek out a slew of opportunities in exchange-traded funds, according to asset management giant State Street.

“We have seen flows going into asset classes that either mitigate geopolitical risk or are opportunistic,” Anna Paglia, executive vice president and chief business officer at State Street told InvestmentNews at the Exchange ETF conference in Las Vegas. “For example, we have seen material flows going into sectors like energy, materials, and infrastructure.”

“The other exposure that we have seen growing in popularity in the last 13 months has been gold,” she added. “Gold is usually a hedge against volatility and against geopolitical risk.”

Paglia explained that the precious metal generated close to $10 billion of net new assets for the ETF industry in the first two months of 2026, putting it on pace to surpass a record 2025, when roughly $48 billion of net new assets were generated.

Set against this backdrop, State Street’s Gold ETF suite captured $7 billion of the 2026 inflows into gold during January and February.

Gold has been something of a recurring theme during the Exchange conference, with a lot of chatter surrounding its recent epic rally. “I would say that real assets, commodities and gold are definitely something now that advisors are talking about,” Jan van Eck, CEO of asset manager VanEck told InvestmentNews earlier this week.

The precious metal, of course, surged past $5,000 for the first time this year, prompting discussion among advisors about whether to take the profits.

Income is also looming large for advisors when it comes to their ETF strategies, according to State Street’s Paglia.

“What we see from our wealth clients, which is wealth advisors in particular, is that the main theme seems to be the search for income,” she said. “So we are building capabilities, we are building products, that are going to deliver income for wealth advisors and their clients.”

Paglia highlighted State Street’s sector franchise of 11 ETFs that each represent a sector in the S&P 500 index. “If you don’t want to buy the entire S&P 500 index, but you have a bias towards any of the sectors, these ETFs give you the ability to really make a surgical decision on your portfolio allocation.”

Last year State Street also added 11 new products to the franchise – for each one of the sectors the company built an ETF that provides income through an options overlay. “This way we use our flagship capabilities and we built on it, providing income solutions to our clients,” Paglia added.

Other issuers are also harnessing options overlays as income ETFs emerge as a growing theme in the wealth management industry.

Unsurprisingly, other attendees at Exchange highlighted the recent market volatility amid the ongoing conflict with Iran.

“Year to date, energy has been a top performing sector,” Alex Bryan, director of product management for equity indexes at Morningstar, told InvestmentNews. “Oil and gas prices have shot up a bunch because we have had the largest disruption to supply ever in the last few weeks – 20% of the world’s oil flows through the Strait of Hormuz - that’s not happening right now.”