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Why Growth in the Fed's Asset Portfolio Has Paused
July 26, 2020--That doesn't mean the central bank has dialed back its support for markets or the economy.
The Fed's holdings of bonds, loans and other assets reached $7 trillion in June, up from $4.2 trillion in February, reflecting multiple financial-assistance programs launched in response to the coronavirus pandemic.
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Source: wsj.com
Zero-fee ETFs fail to capture investor interest
July 26, 2020--Slow progress of recently launched vehicles contrasts with $9bn raised by Fidelity's tracker funds
Innovative tracker funds that were launched to great fanfare because of their negative or non-existent fees have failed to gather significant assets, underlining the challenges facing new entrants to the cut-throat passive investment market.
The ferocious price war among index fund managers has prompted some providers to cut fees to zero in a bid to draw investor interest. An exchange traded fund launched last year went one step further by becoming the first fund to apply a negative fee, meaning that investors were effectively paid to invest.
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FT.com
Everyone's a Day Trader Now
July 25, 2020--Bored, isolated and out of work amid the pandemic, millions of Americans are chasing stock-market glory-and bragging about it online. Not everyone's a winner though.
Stuck at home in lockdown, millions of Americans are trading the markets like never before.
At E*Trade Financial Corp., investors opened roughly 260,500 retail accounts just in March, more than any full year on record. Newer rival Robinhood Markets Inc., maker of a wildly popular trading app, logged a record three million new accounts in the first quarter.
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Source: wsj.com
Passive funds batter active products during 2020 'wild ride'
July 25, 2020--Active managers including Invesco and Franklin Templeton dominate list of worst-selling investment houses.
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Source: FT.com
BMO expands currency options for quality-investing ETF
July 24, 2020--New series of high-quality index ETF opens more choice to investors
BMO Asset Management has introduced two new series for its BMO MSCI USA High Quality Index ETF.
"This is a natural extension to our ETF lineup, as we have seen an increase in interest around the quality factor and its performance in the current market environment," said Mark Raes, head of Product, BMO Global Asset Management Canada.
"These new series will complement our shelf and provide investors with greater choice in terms of currency."
The two latest series, both now listed on the TSX, are:
BMO MSCI USA High Quality Index ETF (Hedged Units)
BMO MSCI USA High Quality Index ETF (USD Units)
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Source: wealthprofessional.ca
Global Beta ETFs Teams with Impact Partners and S&P Dow Jones Indices to Launch Two Factor Based ETFs
July 24, 2020--Global Beta ETFs announced today expanding its factor based suite of ETFs listing the Global Beta Low Beta ETF (Ticker: GBLO), and the Global Beta Momentum Growth ETF (Ticker: GBGR) on the NYSE Arca. Both ETFs list with an annual net expense ratio of 29 basis points.
"We're excited to introduce two new strategies today that help investors gain targeted factor exposure at a more attractive valuation relative to their peer group," said Vince Lowry, CEO of Global Beta ETFs. “At this point in the equity cycle, we believe the easy money has been made, and that valuations of traditional broad-base, capitalization-weighted index funds have become significantly stretched relative to their historic averages. Our research indicates that, across all relevant factors in the market, improving the price-to-sales ratio within a portfolio can significantly improve returns, and can provide investors an additional level of downside risk mitigation. Given the current market environment today, we believe valuation is more important than ever."
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Source: Global Beta Advisors
A Hedge Fund Bailout Highlights How Regulators Ignored Big Risks
July 24, 2020--The Dodd-Frank financial law succeeded at making banks safer, but empowered shadowy corners of finance that nearly wrecked the system in March.
As the coronavirus began shuttering the global economy in March, critical parts of U.S. financial markets edged toward collapse.
The shock was huge and unexpected, but the vulnerabilities were well known, the legacy of risk-taking outside regulatory reach.
To head off a devastating downward spiral, the Federal Reserve came to Wall Street's rescue for the second time in a dozen years.
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Source: nytimes.com
O'Shares Global Internet Giants ETF (OGIG) Performance Over 40% YTD, Surpasses $200 Million in AUM and Celebrates 2-Year Anniversary
June 23, 2020--O'Shares Global Internet Giants ETF (OGIG) is up over 40% year-to-date through June 18, 2020, outperforming the NASDAQ 100 Stock Index by over 25% and surpassed $200 million in AUM. OGIG celebrated its 2-year anniversary on June 5, 2020.
OGIG holds over 60 large cap stocks of internet and e-commerce businesses, selected for strong balance sheets and strong revenue growth. Investors are using OGIG to gain exposure to access a distinct set of large cap internet and e-commerce stocks, most of which are not present in typical technology indexes. AUM in OGIG increased to over $200m YTD ($46m at 12/31/2019), with investor inflows and performance of over 15%, 25% and 40% in the 1-month, 3-month and 12-month periods, respectively, through the end of May.
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Source: O'Shares ETF Investments
Most Overbought ETFs are Bond Funds
July 23, 2020--Despite the strength and speed of the stock market's recovery from the March lows, most overbought ETFs are found among bond funds--and to a lesser extent commodities--rather than among equities.
There are 59 fixed income ETFs with assets under management (AUM) totalling $387 billion that have a Relative Strength Indicator ("RSI") over 70, the typical definition of "overbought," across various categories, including TIPS, Munis, Corporate debt and Treasuries.
Examples include the Vanguard Long-Term Bond ETF (BLV, with an RSI of 82), the iShares TIPS Bond ETF (TIP; RSI of 79) and the Vanguard Total Bond Market ETF (BND, 78).
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Source: ETF Research Center
CFTC Approves Final Swap Dealer Capital Rule at July 22 Open Meeting
July 22, 2020--The Commodity Futures Trading Commission at its open meeting today approved a final rule regarding new capital and financial reporting requirements for swap dealers (SDs) and major swap participants (MSPs). Adoption of this rule marks the completion of the CFTC's required rulemakings under Section 731 of the Dodd-Frank Act, which was enacted 10 years ago this week.
Final Rule: Capital Requirements of Swap Dealers and Major Swap Participants
On a 3-2 vote, the Commission approved a final rule imposing new capital requirements on SDs and MSPs that are not subject to supervision by a banking regulator, and imposing financial reporting requirements for SDs and MSPs generally. The final rule provides SDs with the option to elect one of three alternative methods to establish and meet minimum capital requirements, depending on the characteristics of their business:
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Source: CFTC.gov
