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Citi Analysts See ETFs Gobbling $21 Trillion of Mutual Funds
June 8, 2021--Growth of actively managed strategies favors ETF wrapper
ETFs have taken in $387 billion in 2021, beating mutual funds
The $21 trillion U.S. mutual-fund industry could consist mostly of ETFs within the next 10 years, according to Citigroup Inc.
Investors have favored exchange-traded funds, lured by the industry's ultra-low fees and tax advantages. That trend remains in motion in 2021. ETFs have absorbed $387 billion since the end of December, while mutual funds have taken in $87 billion, according to Investment Company Institute and Bloomberg Intelligence data.
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Source: bloomberg.com
CBO-Monthly Budget Review: May 2021
June 8, 2021--The federal budget deficit was $2.1 trillion in the first eight months of fiscal year 2021, CBO estimates-$184 billion more than the deficit recorded during the same period last year.
Federal revenues were nearly $300 billion more from January through May 2021 than CBO expected when it made its full-year projections earlier this year. That increase stems mainly from larger-than-anticipated payments of individual and corporate income taxes, reflecting economic activity in calendar years 2020 and 2021. Specifically, estimated and final payments for individual and corporate income taxes for 2020 were larger and individual refunds were smaller than anticipated. Withholding for 2021 individual income taxes also has been greater than CBO expected. The reasons for the difference will be better understood as more detailed information becomes available later this year, but may reflect stronger-than-anticipated income growth throughout 2020 and so far in 2021.
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Source: Congressional Budget Office (CBO)
Bond ETFs With $1 Trillion Shrug as Fed Starts to Withdraw
June 7, 2021-The Federal Reserve delivered such a gift to the exchange-traded fund industry amid the throes of the pandemic that analysts say its exit will hardly be felt.
The central bank on Monday will start reversing its surprise decision last March to scoop up bond ETFs as part of efforts to keep credit flowing amid the coronavirus crash.
That move ushered a surge of inflows into bond ETFs, meaning that even though the Fed itself ended up buying just $8.6 billion of debt funds, the market ballooned to be worth $1.1 trillion.
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Source: ca.finance.yahoo.com
Biden prohibits U.S. investment in 59 Chinese companies allegedly involved in defense sector
June 3, 2021--June 3, 2021--President Joe Biden on Thursday expanded restrictions on American investments in certain Chinese companies with alleged ties to the country's military and surveillance efforts, adding more firms to a growing blacklist.
In an executive order, Biden barred U.S. investors from financial interests in 59 Chinese companies over fears of their links to the Chinese government's geopolitical ambitions, continuing some portions of the tough tact former President Donald Trump took in discussions with Beijing.
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Source: cnbc.com
Fed Is Among the Biggest Winners From Its Foray Into Credit ETFs
June 3, 2021--Central bank made $140 million off $8.6 billion of ETFs: Citi
Fed's purchases were concentrated in high-grade bond ETFs
Staving off the collapse of the financial system came with an added bonus for the Federal Reserve: A tidy profit.
The U.S. central bank accumulated roughly $8.6 billion worth of bond exchange-traded funds in 2020 as it worked to backstop markets amid a quickly descending pandemic. Now, as the Fed prepares to unwind its holdings on June 7, it's sitting on a gain of $140 million from the price appreciation alone, according to Citigroup Inc.
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Source: bloomberg.com
SEC delays decision on WisdomTree's proposed bitcoin ETF
June 2, 2021--The Securities and Exchange Commission last week delayed its decision on whether Cboe bZx will be able to list WisdomTree's proposed bitcoin ETF.
On May 26, the SEC announced that it would be pushing back its decision on the listing from May 30 to July 14 "so that it has sufficient time to consider the proposed rule change and the comments received."
The rule change itself is simply to allow listing of WisdomTree Bitcoin Trust or BTCW. WisdomTree filed a prospectus with the SEC on March 11, while the Cboe proposed the rule change on March 26.
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Source: theblockcrypto.com
Fed says it will start unwinding its corporate bond holdings
June 2, 2021--The Federal Reserve will begin to unwind the corporate bond holdings it acquired last year through an emergency lending facility launched to calm credit markets at the height of the pandemic, the central bank announced on Wednesday.
The Fed said the sale of its holdings in the Secondary Market Corporate Credit Facility, which includes corporate bonds purchased in the secondary market and exchange-traded funds that invest in corporate bonds, will be "gradual and orderly."
A Fed official said the decision to wind down the corporate credit facility was unrelated to monetary policy.
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Source: reuters.com
Approval of a bitcoin ETF might take longer than expected as SEC Chairman expresses caution
June 1, 2021--The approval of a bitcoin ETF could take a lot longer than some might have hoped for.
Several bitcoin ETF applications are currently under review by the SEC, but Chairman Gary Gensler has expressed caution.
"There are many challenges and gaps for investor protection in [crypto] markets," Gensler told Congress last week.
Investors and fund managers are longing for the Securities and Exchange Commission's approval of a bitcoin ETF, but recent comments from Chairman Gary Gensler suggest they best not hold their breath.
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Source: markets.businessinsider.com
Brazil economy rebounds to pre-pandemic level, pointing to brighter 2021
Jamie Mcgeever
June 1, 2021--Brazil's economy grew by 1.2% in the first quarter, data showed on Tuesday, faster than economists had expected as rebounding services and investments took Latin America's largest economy back to is size at the end of 2019, before the pandemic hit.
It was the third consecutive quarter of growth. While the rebound has slowed, underlying figures suggest strong foundations for a continued recovery, prompting upward revisions to full-year forecasts and a surge in Brazil's currency.
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Source: reuters.com
Colombia and the World Bank sign an agreement to support the development of a sovereign debt Exchange Traded Fund in the local bond market
May 28, 2021--The Ministry of Finance and Public Credit of Colombia and the World Bank signed a collaboration agreement, taking the first step towards launching the Issuer-Driven Exchange Traded Fund (ID ETF) program.
The ID ETF program is a global initiative designed by the World Bank to support the development of domestic bond markets and increase the financial stability in emerging market economies. The ID ETF also aims to democratize access to capital markets and increase competitiveness with financial services.
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Source: worldbank.org
