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Minutes of the Federal Open Market Committee, December 14-15, 2021
January 5, 2022--Developments in Financial Markets and Open Market Operations
The manager turned first to a discussion of financial market developments over the period. Financial markets responded to significant new information about the economy and monetary policy, as well as the emergence of the Omicron variant. Overall, domestic financial conditions tightened modestly but remained near historically accommodative levels. Expectations for an earlier reduction in Federal Reserve policy accommodation lifted short-term interest rates and supported the dollar.
While prices of equities that are sensitive to COVID-19 risks declined significantly, the S&P 500 index was little changed.
Over the period, market participants considered potential drivers of the notable decline in far-forward sovereign yields in the United States and other advanced economies. News of the Omicron variant reportedly drove safe-haven flows into sovereign bonds, pushing term premiums lower. The significant co-movement between far-forward yields and the share prices of firms most affected by social distancing was consistent with this interpretation. In addition to the effects of the pandemic on risk sentiment, some discussed the potential for COVID to become endemic, possibly resulting in modestly lower potential growth over time and a lower long-run neutral level of the federal funds rate.
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Source: federalreserve.gov
SEC Delays Decision on NYDIG's Spot Bitcoin ETF Proposal
January 4, 2022--The commission now has until March 16 to approve or disapprove NYDIG’s proposal.
The U.S. Securities and Exchange Commission (SEC) has extended the time period for ruling on NYDIG's proposal for a spot bitcoin exchange-traded fund (ETF) by 60 days in order to have "sufficient time to consider the proposed rule change and any comments received."
The SEC's original deadline was Jan. 15, so now it has until March 15 to make a decision.
In recent months, the SEC has rejected spot bitcoin ETF proposals from a number of investment companies, including VanEck, WisdomTree and Kryptoin.
It also recently delayed its decisions on spot bitcoin ETFs from Valkryie, Grayscale and Bitwise. Grayscale is owned by Digital Currency Group, which is the parent company of CoinDesk.
In the past, the SEC has typically postponed its decisions on approving bitcoin ETFs for as long as possible.
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Source: coindesk.com
Passive ETFs hit by billion-dollar rebalancing costs
January 4, 2022--Research shows US index trackers lose out on nearly $4bn a year due to price moves created by front-running
US index-tracking funds are throwing away $3.9bn a year by using predictable, mechanical trading strategies that are exploited by nimbler market participants, according to academic research.
The losses would cost an investor who built up a $2m retirement portfolio over 30 years via passive mutual or exchange traded funds $29,000, the analysis found.
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Source: ft.com
RiverNorth and TrueMark Launch RiverNorth Volition America Patriot ETF (FLDZ) to Benefit Folds of Honor
January 3, 2022-Core Equity Investment with "Real Impact" as Fees and All Profits from Managing the Fund Donated to Folds of Honor Charity in Support of Military Families
-RiverNorth Capital Management, LLC and TrueMark Investments, LLC today announced the launch of the RiverNorth Volition America Patriot ETF (NYSE: FLDZ).
The innovative Fund is designed to do double-duty as a US-focused core equity portfolio and as a support to a tremendous charitable organization. The majority of advisory fees and all profits from managing the Fund will be donated to Folds of Honor, a nonprofit organization that provides the families of fallen and disabled service members with educational scholarships.
The new Fund was listed for investing and trading on the NYSE on January 3, 2022, under the ticker symbol FLDZ.
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Source: RiverNorth Capital Management, LLC
Motley Fool Asset Management Launches Two New Index-Based ETFs
December 31, 2021--Motley Fool Asset Management, an affiliate of The Motley Fool, LLC,* today is proud to announce the launch of two new ETFs: Fool Capital Efficiency 100 Index and Fool Next Index.
"We established these ETFs with investor demand in mind," said Kelsey Mowrey, President of Motley Fool Asset Management. "Both ETFs are designed to be convenient, cost-effective vehicles for individuals who want exposure to stock recommendations made by Motley Fool analysts across Fooldom.
The 'recommendation universe' includes all companies domiciled in the United States that are either active recommendations of a newsletter published by TMF or are among the 150 highest rated U.S. companies in TMF's analyst opinion database. We are thrilled to add these two index-based investment products to our ETF lineup."
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Source: Motley Fool Asset Management
Debuts in active ETFs surge as US investors' appetite grows
December 31, 2021--More than half of the exchange traded funds launched this year are actively managed
About 60 per cent of the nearly 500 ETFs that launched in the US in 2021 are actively managed, according to data from Morningstar Direct. This marks the first year that more active ETFs were launched than index-tracking ETFs, data up to December 15 show.
Among them are ETF debuts from managers including Putnam Investments, Harbor Funds, Alger and Gabelli, as well as the first active ETFs from Nuveen and BNY Mellon.
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Source: FT.com
Infrastructure Capital Advisors Launches ICAP, New Actively Managed Equity Income ETF
December 29, 2021--Infrastructure Capital Advisors ("InfraCap"), a leading provider of investment management solutions that seeks to meet the needs of income-focused investors, is today announcing the launch of the firm's newest Exchange-Traded Fund ("ETF"): the InfraCap Equity Income Fund ETF (NYSE Arca: ICAP).
ICAP is an actively managed ETF overseen by portfolio manager and InfraCap Founder & CEO Jay D. Hatfield. ICAP will primarily invest in equity securities of companies with a strong track record of paying dividends during normal market conditions.
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Source: Infrastructure Capital Advisors
Should Passive Investors Actively Manage Their Trades?
December 29, 2021--Abstract
Using novel daily holding data for exchange-traded funds (ETFs), three types of ETFs are identified that adopt distinct approaches to rebalancing their portfolios, which generates meaningful return heterogeneity. First, 56% of ETFs track public indices that pre-announce their rebalances, and they trade entirely on reconstitution days at closing prices.
Their large, uninformed trades pay 67 bps in execution costs, a figure that is three times higher than what is paid in similar-sized institutional trades. Second, 7% of ETFs spread out their trades across 10 days and save 34 bps per trade or 7.3 bps per year. Third, 37% of ETFs use self-designed indices to avoid pre-announcements of rebalancing stocks and save 30 bps per trade. The alternative rebalance schedule leads to a tracking error of 10.6 bps per year and an information ratio of 0.69. For a $2 million retirement account that accrues over 30 years, the transaction cost savings rise to $29 thousand at retirement.
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Source: papers.ssrn.com
Simplify Asset Management's Innovative Lineup of Exchange-traded Funds Passes the $1 Billion Asset Threshold
December 28, 2021--In just over a year, firm has debuted numerous first-of-their-kind ETF offerings, solving major portfolio challenges for advisors and investors
Simplify has also dramatically expanded its leadership team, adding investment industry luminaries such as Harley Bassman and Michael Green
Simplify Asset Management ("Simplify"), an innovative provider of Exchange Traded Funds ("ETFs") designed to solve today's most pressing portfolio construction challenges, is today celebrating the fact that the firm's ETF lineup has surpassed the $1 billion assets under management ("AUM") threshold.
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Source: Simplify Asset Management Inc
Some Non-Transparent ETFs Face a Tax Hit
December 23, 2021--The actively managed exchange traded fund space has become more lively with the addition of non-transparent ETFs, but with the year coming to an end, some of these new non-transparent offerings face year-end capital gains distributions.
Analysts and executives warned that a lack of redemptions from non-transparent products, along with their limited ability to use custom baskets in tax management, have caused several non-transparent ETFs to pass along year-end capital gains distributions, the Financial Times reports.
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Source: yahoo.com
