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Bank Fees Are 'Significantly Eroding' Russia ETF, VanEck Warns
July 13, 202--Depository-receipt fees costing at least 20% of RSX's assets
VanEck urges banks to 'do the fair thing' and waive fees
The money manager behind a Russia-focused ETF that collapsed after the country invaded Ukraine is warning that bank fees are "significantly eroding" what little of the fund's value remains.
VanEck said Citigroup Inc., JPMorgan Chase & Co. and Bank of New York Mellon are charging fees on Russian depository receipts that its Russia ETF (ticker RSX) primarily holds, costing at least 20% of the product's assets, which have slumped to about $37 million.
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Source: bloomberg.com
ETFGI reports the ETFs industry in Canada suffered net outflows in June 2022 after 35 months of consecutive net inflows
July 12, 2022--ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs/ETPs ecosystem, reported today that the ETFs industry in Canada suffered net outflows in June 2022 after 35 months of consecutive net inflows.
ETFs listed in Canada suffered net outflows of US$644 million during June, bringing year-to-date net inflows to US$15.28 billion. In June 2019 the ETFs industry in Canada suffered net outflows of US$46 million.
During the month, Canadian ETF assets decreased by 6.3%, from US$260 billion at the end of May to US$243 billion, according to ETFGI's June 2022 Canadian ETFs and ETPs industry landscape insights report, the monthly report which is part of an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets of $243 Bn invested in ETFs listed in Canada at the end of H1 2022.
Assets have decreased 10.9% in H1 2022, going from $273 Bn at the end of 2021, to $243 Bn.
Net outflows of $644 Mn in June 2022 – the first month of net outflows in 3 years.
1st month of net outflows.
Net inflows of $15.28 billion in H1 2022 are the third highest on record, after net inflows of $26.35 billion in H1 2021 and net inflows of $16.82 billion in H1 2020.
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Source: ETFGI
SEC warns investors about new single-stock leveraged ETFs
July 12, 2022--Products carry 'greater volatility and risk' compared with holding the underlying asset, says US regulator
Senior officials from the top US markets regulator have warned of the risks of single-stock leveraged exchange traded funds, speaking out ahead of the products' imminent launch.
Lori Schock, director of the Securities and Exchange Commission's office of investor education and advocacy, said the new products were even riskier than existing leveraged and inverse ETFs, which provide daily amplified losses and gains on the securities they track and which the SEC has already warned against.
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Source: ft.com
IMF-The US Economy's Inflation Challenge
July 12, 2022-The US economy has recovered quickly from the pandemic but the bounce back in demand has stressed supply chains and caused inflation to rise sharply. The economy is expected to slow, as the Federal Reserve (the Fed) continues to tighten monetary policy and COVID economic relief programs come to an end, bringing core Personal Consumption Expenditure (PCE) inflation down to the Fed's 2 percent medium-term target by late 2023.
However, if inflation is more persistent than expected, the Fed will need to tighten more, which will further slow the economy.
The IMF's annual review of the US economy focuses on the policies needed to return inflation to the Fed's medium-term target. Most workers' wages have failed to keep up with inflation, eroding the purchasing power of households and causing significant hardship. Although increases in gasoline and food prices have been affected by global events, the prices of a broader range of items have also risen strongly, including housing and transportation. If left unchecked, these price increases could become long lasting. In our assessment, we conclude that the Fed should act quickly and assertively to tackle inflation and restore price stability.
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Source: IMF
CBO-Monthly Budget Review: June 2022
July 11, 2022--Summary
The federal budget deficit was $514 billion in the first nine months of fiscal year 2022 (that is, from October 2021 through June 2022), the Congressional Budget Office estimates. That amount is less than one-quarter of the $2.2 trillion shortfall recorded during the same period in 2021.
Revenues were $779 billion (or 25 percent) higher and outlays were $945 billion (or 18 percent) lower than during the same period a year ago.
The deficit at this point last year was much larger because of spending in response to the coronavirus pandemic-mostly for the recovery rebates (also known as economic impact payments), unemployment compensation, pandemic relief through the Small Business Administration (SBA), and the Coronavirus Relief Fund-and because revenues were lower.
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Source: Congressional Budget Office (CBO)
Franklin Templeton to Rename U.S. ETF Platform for Better Brand Alignment
July 11, 2022--Firm seeks to best leverage larger brand presence for evolving ETF lineup
Franklin Templeton today announced it will rename 13 of its ETFs in the U.S. This will include removing the LibertyShares, Liberty and LibertyQ naming conventions from the platform effective August 1, 2022. In addition, the firm recently announced plans to reposition and rename four index-based ETFs.
"Since we officially launched our ETF business more than five years ago, we have been very pleased with the key milestones we've reached in our expansion. We believe these updates will help bring clarity to our clients now that we have built out such a robust suite of offerings across both indexed and active ETFs" said Patrick O'Connor, Head of Global ETFs.
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Source: franklintempleton.com
Leveraged ETFs Betting Against US Stocks Draw in $1.4 Billion
July 11, 2022--Short S&P 500 fund sees 12 days of inflows, Nasdaq racks four
Investors 'getting more bearish,' Interactive Brokers says
Traders are piling into exchange-traded funds that bet against US stocks as the risk of recession and disappointment from the upcoming earnings season bolsters bearish sentiment in the market.
Investors added a net $247.5 million to the ProShares UltraPro Short QQQ ETF (ticker SQQQ) in the latest session tracked by Bloomberg. This was the biggest one-day increase in over a month for the fund --which is a bet against the tech-heavy Nasdaq 100--and the fourth straight day of inflows, which totaled roughly $518 million.
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Source: bloomberg.com
Minutes of the Federal Open Market Committee, June 14-15, 2022
July 6, 2022--Developments in Financial Markets and Open Market Operations
The manager of the System Open Market Account (SOMA) turned first to a discussion of financial developments.
Over the intermeeting period, there were significant swings in asset prices, and financial conditions tightened, on net, as market participants assessed incoming information about the economy.
In the United States, near-term policy rate expectations shifted markedly toward the end of the period, particularly after the release of the May consumer price index (CPI) report. Ahead of the release of the report, market expectations reflected a broad consensus that there would be 50 basis point rate increases at both the June and July FOMC meetings.
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Source: federalreserve.gov
CBO-H.R. 5910, Holding SPACs Accountable Act of 2021
July 6, 2022--Summary
H.R. 5910 would exclude all special purpose acquisition companies (SPACs) from safe harbor protections. (SPACs are companies without commercial operations that exist solely to raise capital through initial public offerings to later engage in mergers or acquisitions.)
Under current law, most public companies are shielded from liability by safe harbor protections when prospective information published by the company-such as projections of revenues, income, and earnings per share-proves to be false or misleading. Currently, only SPACs that issue penny stocks, equity securities that trade for less than $5 per share, are excluded from those protections.
CBO estimates implementing the bill would cost the Securities and Exchange Commission (SEC) less than $500,000.
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Source: Congressional Budget Office (CBO)
Global X ETFs Expands its Lineup of Options-Based Strategies with Two Innovative Actively Managed Funds
July 6, 2022--Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of the Global X Interest Rate Hedge ETF (IRHG) and the Global X Interest Rate Volatility & Inflation Hedge ETF (IRVH). These two funds represent Global X's latest additions to its options-based ETF suite, which now includes 14 funds totaling over $9.7 billion in assets under management.[i]
Currently, inflation seems to be spreading across the entire supply chain, from components and commodities, all the way to end consumer products. With a tight labor market, high energy prices, supply chain issues and a strong consumer, elevated levels of inflation are unlikely to dissipate in the near-term. In response to this persistently high inflation, central banks are aggressively raising rates and rolling back bond buying programs. Rising interest rates are increasing costs for companies globally and putting pressure on the broader markets
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Source: Global X Management Company LLC
