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Active fund investors earn higher returns for tolerating underperformance
December 4, 2020--Research suggests it pays to be patient as even the top active funds have long periods of undershooting the market
Investors looking to outperform the market by putting money into actively managed funds must tolerate longer periods of decline than most are prepared to weather in the hunt for return.
More than 80 per cent of outperforming active funds in the US spent at least one five-year period in the bottom 25 per cent of funds for performance, new research from Vanguard shows.
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Source: FT.com
FTSE Russell to drop eight Chinese companies after U.S. blacklisting
December 4, 2020--Index provider FTSE Russell said on Friday it will delete shares of Hikvision and seven other Chinese companies from certain products after a U.S. order restricting the purchase of shares in those firms.
In a statement sent by a spokesman for owner London Stock Exchange Group, FTSE Russell said it will remove shares in companies including Hangzhou Hikvision, China Railway Construction Corp, and China Spacesat.
FTSE Russell said it acted following feedback from index subscribers and other stakeholders, and that it was following its policy when sanctions are imposed that restrict investments.
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Source: reuters.com
Investors seek inflation protection as economic optimism rises
December 4, 2020--Tips funds have enjoyed inflows for nine consecutive weeks.
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Source: FT.com
Vanguard Announces Senior Leadership Changes
December 3, 2020--Vanguard today announced several senior leadership changes. Chris McIsaac, currently head of Vanguard's Planning and Development Division, has been named head of Vanguard's International business. After 33 years of dedicated service, Jim Norris, head of Vanguard's International business, will retire at the end of the year.
As part of this long-planned transition, Mr. McIsaac has partnered with Mr. Norris over the past year on the firm's international strategy, including sharpening the firm's focus on individual investors and the intermediaries who serve them, and developing Vanguard's global suite of mutual funds, ETFs, and advisory services. Mr. McIsaac will relocate to Vanguard's European headquarters in London during the month of December.
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Source: apnews.com
Flow Charts: Where the ETF Money Went in November 2020
December 3, 2020--November was a blockbuster month for money flooding into ETFs. Coinciding with the historic stock market rally, pro-cyclical plays were the biggest winners, with one notable exception: Emerging Market stocks.
Net ETF inflows totaled a record $83.6 billion in November, with the vast majority -$72.1 billion- coming from equity ETFs, and $12.3 billion from fixed income funds. (Commodity ETFs and other asset classes registered small outflows).
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Source: etfrc.com
S-Network MicroSectors Gold Miners Index to Provide Underlying Strategy for MicroSectors ETNs
December 3, 2020--S-Network, an Alerian company, is pleased to announce the launch of the S-Network MicroSectors Gold Miners Index (ticker: MINERS). The market cap-weighted index is designed to track the performance of the VanEck Vectors(R) Gold Miners ETF (GDX) and the VanEck Vectors(R) Junior Gold Miners ETF (GDXJ).
The index will function as the underlying strategy for leveraged and inverse leveraged exchange traded notes. These ETNs will be issued by the Bank of Montreal, trading under the symbols GDXU and GDXD.
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Source: Alerian
Ancestry bond deal sparks investor backlash over voting rights
December 3, 2020--Investors have warned that Private Equity-backed Ancestry.com's move to limit investors' voting rights in bond trading last week could erode the "cornerstone" of the corporate bond market.
The group has added a clause limiting investors' voting rights to 20% in a legal document supporting the $ 1.2 billion financing that is part of Blackston's acquisition of the group.
Ancestry's provisions have overturned a long-standing principle known as "one bond, one vote" that gives investors proportional voting rights.
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Source: californianewstimes.com
IMF Staff Country Report-Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil
December 2, 2020--Summary:
The COVID-19 pandemic has worsened Brazil's longstanding vulnerabilities of low potential growth, high income inequality, and weak fiscal position. While the authorities mounted a rapid and effective response to support the economy and protect the poor and vulnerable, the virus outbreak is yet to be brought under control.
Outlook and Risks.
Real GDP is projected to contract by 5.8 percent in 2020 followed by a partial recovery to 2.8 percent in 2021.
With weak domestic demand, inflation is likely to end 2020 substantially below target. Debt is projected to jump to 100 percent of GDP, due to a 10.6 percentage point deterioration in the primary deficit in 2020, and continue to rise over the next five years. The high level of debt exposes Brazil to confidence shocks. Securing congressional passage of structural reforms to raise potential growth remains challenging.
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Source: IMF
World Bank-Managing Fiscal Risk in Colombia
December 2, 2020--A new methodology improves risk analysis and paves the way for infrastructure financing through public-private-partnership programs
Colombia has made transportation infrastructure a priority, investing US$24 billion to create a nationwide toll road network.
The Colombian government has partnered with the World Bank's Government Debt and Risk Management (GDRM) Program for developing a new methodology to better manage the fiscal risks of infrastructure.
The new methodology will improve the mitigation of contingent liabilities for infrastructure projects.
On November 13, 2020, the Colombian government published the "Valuation Methodology For Contingent Liabilities in Infrastructure Projects: The Colombian Case" (English version) -a new methodology to improve the statistical approach and models used in measuring risks for infrastructure contracts. Although intended for all contracts, this new methodology will be especially critical for Colombia's transportation projects.
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Source: World Bank
Beige Book-December 2, 2020
December 2, 2020--Overall Economic Activity
Most Federal Reserve Districts have characterized economic expansion as modest or moderate since the prior Beige Book period. However, four Districts described little or no growth, and five narratives noted that activity remained below pre-pandemic levels for at least some sectors.
Moreover, Philadelphia and three of the four Midwestern Districts observed that activity began to slow in early November as COVID-19 cases surged. Reports tended to indicate higher-than-average growth of manufacturing, distribution and logistics, homebuilding, and existing home sales, although not without disruptions. Banking contacts in numerous Districts reported some deterioration of loan portfolios, particularly for commercial lending into the retail and leisure and hospitality sectors. An increase in delinquencies in 2021 is more widely anticipated. Most Districts reported that firms' outlooks remained positive; however, optimism has waned--many contacts cited concerns over the recent pandemic wave, mandated restrictions (recent and prospective), and the looming expiration dates for unemployment benefits and for moratoriums on evictions and foreclosures.
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Source: federalreserve.gov
