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Exchange Traded Concepts Partners with Qraft Technologies to Launch Two Artificial Intelligence (AI) Powered ETFs
May 23, 2019--Exchange Traded Concepts, LLC ("ETC"), a leader in providing white-label Exchange Traded Fund (ETF) solutions, in conjunction with Qraft Technologies, today announced that it has launched two ETFs. The Qraft AI Enhanced U.S. Large-Cap ETF (NYSE ARCA: QRFT) and The Qraft AI Enhanced U.S. Large Cap Momentum ETF (NYSE ARCA: AMOM).
The Qraft AI Enhanced U.S. Large-Cap ETF (QRFT) seeks to provide dynamic exposure to five main factors affecting the U.S. stock market, namely, quality, size, valuation, momentum, and low risk. Certain causes or conditions may affect the returns to these basic investment factors. To create optimal factor weights, the fund using artificial intelligence (AI) technologies to continuously learn the correlation of factor returns with various macroeconomic and valuation conditions. Artificial Intelligence may be able to identify data patterns that are not readily discernable to humans and to continuously learn the correlation of factors to these causes or conditions. The investment system returns stock weights that are in line with the targeted factor weights for the portfolio.
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Source: Exchange Traded Concepts, LLC
More active managers are beating the stock market again thanks to the trade war: Goldman Sachs
May 23, 2019--Active stock pickers are having one of their best years since the financial crisis, and these money managers can thank rising U.S.-China trade tensions for their better fortunes, according to analysts at Goldman Sachs.
The analysts, led by Arjun Menon, wrote in a Wednesday research note that 42% of large-cap active mutual funds are outperforming their benchmarks so far in 2019, well above the 34% rate averaged during the last decade.
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Source: marketwatch.com
SEC requires more information on exchange fee increases, starts fee pre-pilot
May 22, 2019--Stock exchanges will have to provide more details before being allowed to raise fees or offer discounts to some traders, the Securities and Exchange Commission said in new guidelines issued Tuesday.
In addition to clearly describing proposed fee increases for market data or connectivity, exchanges will have to prove that the fees are "reasonable, equitably allocated, not unfairly discriminatory and not an undue burden on competition," the staff guidance said. Before an exchange can offer a discount, it "must explain why that structure represents an equitable allocation of fees," the SEC said.
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Source: pionline.com
GTS Closes Acquisition of Automated ETF & Wholesale OTC Market Making Businesses
May 22, 2019--GTS, a leading electronic market maker across global financial instruments, announced the completion today of its acquisition of the automated Exchange Traded Funds (ETF) and Wholesale OTC Market Making businesses of Cantor Fitzgerald ("Cantor").
Thirty Cantor employees have moved to GTS as full-time employees as part of the transition.
The ETF business is led by industry pioneer Reginald Browne along with his colleagues Eric Lichtenstein and Darren Taube. Overseeing the Wholesale OTC Market Making business is Joe Pleffner, Mike Strashnov and Menash Cohen. Cantor will continue to act as a counterparty in ETFs in partnership with GTS.
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Source: GTS
WBI Shares lists actively managed multi-asset ETF
May 22, 2019--WBI Shares is listing an actively-managed fund multi-asset fund that looks at the US economy to decide what to invest in. The WBI BullBear Trend Switch US 3000 Total Return ETF (WBIT) uses an in-house model to read a bunch of macro-economic data and index charts, including commodity prices, monetary policy, valuations, credit spreads and interest rate changes.
It then allocates to either US stocks or US fixed income securities depending on the model's reading of current market conditions. The fund will mostly access the equity and bond markets via ETFs, which may save the hazard and trouble of picking individual stocks and bonds.
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Source: etfstream.com
U.S. Digital Investment Management Market Monitor, Q2 2019-Aite Group estimates that client assets under management on robo-advice platforms will reach US$1.26 trillion by 2023.
May 22, 2019--Digital investment management is a disruptive trend that continues to evolve, and new offerings are announced often. But the hype around this industry trend has been a bit inflated, as Aite Group estimates that assets on digital investment management platforms was around US$257 billion at the end of 2018.
Aite Group estimates that client assets under management on robo-advice platforms will reach US$1.26 trillion by 2023.
Nevertheless, solid growth opportunities lie ahead for firms that can leverage their brand, market reach, and technical capabilities. U.S. Digital Investment Management Market Monitor, Q2 2019, Aite Group’s newest report, is a biannual report series that will be an outlet for Aite Group's monitoring of the digital investment space.
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Source: Aite Group
SEC sets dates for first phase of disputed exchange pricing plan
May 22, 2019--The U.S. Securities and Exchange Commission said it will begin the first phase of a plan aimed at evaluating how stock exchange fees and incentives affect how brokers trade, even as several exchanges sue the regulator in an attempt to kill the experiment.
Exchanges will have to start collecting data on how brokers route stock orders to the exchanges starting on July 1, through Dec. 31, according to a regulatory notice released late on Tuesday.
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Source: Reuters
Minutes of the Federal Open Market Committee, April 30-May 1, 2019
May 22, 2019--Balance Sheet Normalization
Participants resumed their discussion of issues related to balance sheet normalization with a focus on the long-run maturity composition of the System Open Market Account (SOMA) portfolio. The staff presented two illustrative scenarios as a way of highlighting a range of implications of different long-run target portfolio compositions.
In the first scenario, the maturity composition of the U.S. Treasury securities in the target portfolio was similar to that of the universe of currently outstanding U.S. Treasury securities (a "proportional" portfolio). In the second, the target portfolio contained only shorter-term securities with maturities of three years or less (a "shorter maturity" portfolio). The staff provided estimates of the capacity that the Committee would have under each scenario to provide economic stimulus through a maturity extension program (MEP).
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Source: federalreserve.gov
REVERSEinquiries, Volume 2, Issue 5-Structured and Market-linked Product News for Inquiring Minds
May 22, 2019--REVERSEinquiries is Mayer Brown's structured and market-linked products-focused newsletter. In this issue, we discuss:
Unsuitable Sales of Leveraged ETFs Draw FINRA's Ire; Text Messaging Violates Communications Rules
OCIE's Retail Investor Protection Focus
Department of Labor Fiduciary Rule Update
House Passes Resolutions on Financial Literacy and Support for Elderly
Revised Notice of Proposed Rule Change to FINRA Rule 5110
Refresher: Using Free Writing Prospectuses for Structured Notes Offerings
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Source: Mayer|Brown
IMF-Canada: Staff Concluding Statement of the 2019 Article IV Mission
May 21, 2019-- Context
1. Over the past five years, Canada has employed a judicious mix of policies to support inclusive growth and reduce vulnerabilities in the financial system. The use of fiscal space combined with accommodative monetary policy at the onset of the 2014 oil price shock was effective in overcoming the recession in 2015. The economy posted the strongest growth rate among G7 economies in 2017 and the unemployment rate fell to its lowest level in forty years.
The positive momentum in the economy carried through to 2018 and the government took the opportunity to push through several important reforms to boost productivity growth. A deal to overhaul NAFTA was signed, the Canada Infrastructure Bank opened for business, and tax allowances for business investment were expanded to help preserve Canada's tax competitiveness following the 2018 U.S. Tax Cuts and Jobs Act. With the policy rate kept low amid a booming housing market, macroprudential policy was tightened to slow the rise in household debt and to enhance the resilience of the financial system.
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Source: IMF
