Americas ETP News
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ETFs-You're (Probably) Doing It Wrong
January 19, 2017--US listed exchanged traded funds are coming off a banner year in 2016 with $298 billion of inflows-a new annual record for this still-growing investment vehicle.
There are now almost 2,000 funds in the domestic ETF ecosystem and over $2.6 trillion in assets under management (AUM). We expect 2017 to be equally successful for the industry.
Yet even with this growth, both in product choice and overall assets, the ETF industry faces a clear problem: investors cluster too much in the largest funds. A few key points here (with data courtesy of www.xtf.com, a part of the London Stock Exchange Group):
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Source: Eric Noll, President and CEO, Convergex
Research Affiliates-How Not to Get Fired with Smart Beta Investing
January 19, 2017--Key Points
Delegated asset management can lead to what economists call the "principal-agent problem": the principal relies on the agent to make decisions on their behalf when the agent's best interests may run counter to those of the principal.
Agents often have an incentive to choose portfolio allocations designed to minimize their risk of being fired at an all-too-common three-year evaluation horizon, over which both robust strategies and "the best" managers can experience prolonged bouts of underperformance.
A remedy for the principal-agent problem is to better align incentives by adopting longer evaluation periods, combining multiple robust strategies, using non-robust strategies consciously, and practicing transparent management by individual style performance.
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Source: researchaffiliates.com
Treasury International Capital Data For November
January 19, 2017--The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for November 2016. The next release, which will report on data for December 2016, is scheduled for February 15, 2017.
The sum total in November of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $23.7 billion. Of this, net foreign private inflows were $25.2 billion, and net foreign official outflows were $1.5 billion.
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Source: treasury.gov
CFTC.gov Swaps Report Update
January 19, 2017--CFTC's Weekly Swaps Report has been updated, and is now available.
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Source: CFTC.gov
Canadian Securities Administrators Report The Findings Of Their Review Of The Disclosure Of Cyber Security Risks And Incidents
January 19, 2017--Staff from the British Columbia Securities Commission, the Ontario Securities Commission and the Autorité des marchés financiers (staff) are publishing today Multilateral Staff Notice 51-347 Disclosure of cyber security risks and incidents (Staff Notice 51-347).
The notice reports the findings of a review announced by the Canadian Securities Administrators (CSA) in Staff Notice 11-332 Cyber Security (Staff Notice 11-332) and provides disclosure expectations for reporting issuers based on those findings.
The review found that 61 per cent of the constituents of the S&P/TSX Composite Index acknowledged cyber security as a material risk to their business.
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Source: www.osc.gov.on.ca
SEC Chief of Staff Andrew J. Donohue to Leave Agency
January 19, 2017--The Securities and Exchange Commission today announced that SEC Chief of Staff Andrew J. "Buddy" Donohue will be leaving the agency at the end of January.
SEC Chair Mary Jo White named Mr. Donohue as Chief of Staff in May 2015. As Chief of Staff, Mr. Donohue was a senior adviser to the Chair on all policy, management, and regulatory issues. Mr. Donohue had previously served as the Director of the SEC's Division of Investment Management from May 2006 to November 2010.
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Source: SEC.gov
Strategic Beta ETFs Underutilized in Managing Current Investor Anxieties, Hartford Funds Survey Finds
Lack of Familiarity Stifling Advisor, Investor Use
Janaury 18, 2017--New survey data from Hartford Funds reveals that market volatility and geopolitical events are fueling investor anxiety, yet most aren't taking advantage of the full suite of investment options that may help manage risk exposure at a lower cost*, namely strategic beta exchange traded funds (ETFs)
Further, while advisors are aware of these products, they aren't familiar enough to begin using them in a meaningful way in client portfolios. Hartford Funds surveyed nearly 800 investors and more than 300 financial advisors to gauge sentiment and knowledge of strategic beta ETF strategies.
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Source: Hartford Funds
Victory Capital Expands ETF Business With Introduction of VictoryShares
Enhanced Platform Builds on Success of
Victory CEMP Volatility Weighted ETFs
January 18, 2017--Victory Capital ("Victory") today announced the next generation of its ETF platform, which is branded VictoryShares.
VictoryShares builds on the success of the firm's Victory CEMP volatility weighted ETFs, which have grown to approximately $960 million in AUM.* In addition to its 11 existing ETFs, Victory plans to launch new ETFs that will track indexes developed in partnership with Nasdaq.
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Source: Victory Capital
BlackRock Survey Reveals Half of U.S. Investors Plan to Invest in ETFs in 2017
January 18,2017--Millennials and Gen X leading the trend as they look to turn savings into investments with simple, low cost index investing.
9 in 10 financial advisors also expect to use ETFs in investor portfolios in 2017
ETF users tend to be younger, more engaged, confident and optimistic about their financial futures
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Source: BlackRock
FINRA Reports on Potential Implications of Blockchain; Seeks Comment
January 18, 217--Distributed ledger technology (DLT), better known as blockchain, has garnered significant interest in the securities industry, with many market participants indicating a desire for increased regulatory engagement as they explore the technology and its possible applications.
In response, the Financial Industry Regulatory Authority (FINRA) today issued a report that discusses the use and implications of DLT in the securities industry. The paper also seeks comments as part of an effort to obtain feedback on any challenges associated with the use and implementation of DLT.
view the FINRA Distributed Ledger Technology: Implications of Blockchain for the Securities Industry report1
Source: Financial Industry Regulatory Authority (FINRA)
