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Fed Hires BlackRock to Help Calm Markets. Its ETF Business Wins Big
September 18, 2020--The central bank's market intervention helped the largest U.S. provider of corporate bond exchange-traded funds get large
The Federal Reserve's March commitment to deploy billions of dollars to prop up the economy was a boon for the company the Fed hired to help execute its plan: BlackRock Inc., the world's largest asset manager.
In response to the pandemic-induced market collapse, the Fed promised to buy corporate bonds and exchange-traded funds that invest in collections of corporate debt.
The Fed had never bought ETFs or corporate bonds before. The central bank tapped BlackRock to help advise it and buy the bonds and funds on its behalf, though the central bank retained ultimate authority over what to purchase.
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Source: wsj.com
Cabana Asset Management Introduces New Suite of Target Drawdown ETFs with More Than $1 Billion in Initial Assets
September 17, 2020--Launch provides a broader swath of investors with access to firm's unique defined-risk investment approach
Cabana Asset Management ("Cabana"), a wholly owned subsidiary of The Cabana Group, LLC and an SEC registered investment adviser providing risk-managed investment products to investors, advisors and institutions, today announced the continued expansion of its client-focused investment lineup with the launch of its new suite of Target Drawdown ETFs, in partnership with private label ETF advisor Exchange Traded Concepts (ETC).
Building on the proven track record of Cabana's Target Drawdown Professional Series of separately managed accounts (SMAs), which are available exclusively through the firm's financial professionals and RIA partners, the new family of Target Drawdown ETFs is built with the goal of maintaining and growing investor wealth over the long term by clearly defining risk in terms of the maximum expected percentage loss ("target drawdown"). There are five strategies in the initial suite of ETFs with target drawdown percentages ranging from 5% to 16%.
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Source: Cabana Group
US futures exchanges target retail investors with 'mini' contracts
September 15, 2020--New products come after rising stock markets lift notional value, and therefore fees, of popular bets.
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Source: FT.com
BlackRock and Vanguard look set to extend dominance to active ETFs
September 13, 2020--Survey finds institutional investors prefer them over the leading active ETF managers
BlackRock and Vanguard, the twin powerhouses of the passive investment industry, look set to grab the lion's share of assets in the small, but faster growing world of actively managed exchange traded funds.
The finding is likely to disappoint active fund managers, which have been squeezed by the rapid growth of passive ETFs in recent years and might have viewed the rollout of active ETFs as a way for them to fight back and grab a share of the lucrative pie.
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Source: FT.com
Non-transparent ETFs pass their first test -spreads are tight
September 11, 2020--Although precise holdings are concealed, trading has been less cautious than anticipated.
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Source: FT.com
Three new stock exchanges take aim at incumbents in the US
September 11, 2020--A trio of new stock exchanges launches in the US this month, hoping to shake up a market long dominated by another threesome-the New York Stock Exchange, Nasdaq and Cboe Global Markets.
The Long Term Stock Exchange, a San Francisco-based bourse, opened for business on Wednesday this week. It will be followed by MEMX and Miax Pearl Equities, which begin operations on September 21 and 25 respectively, bringing the number of full exchanges in the US to 16.
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Source: technocodex.com
Wall Street bids a not-so-fond farewell to exchange traded notes
September 10, 2020--Exchange traded notes, the smaller and often unloved cousins of the bigger and broader $6tn exchange traded fund industry, seem to be dying out-and few lament their passing.
The assets of ETNs peaked at almost $30bn in 2015, following strong growth in the 2000s, but currently stand at just $8.6bn, according to Morningstar data. Analysts say the instruments' complexity and risky features have made them increasingly unpopular both with investors and some of the banks that sponsor them.
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Source: technocodex.com
New Research: FINRA Foundation Explores Risky Financial Behaviors by Senior Investors
September 10, 2020-Study Suggests Overconfidence in Financial Knowledge May Lead to Excessive Financial Risk Taking Among Older Investors
America's older investors, many facing diminished financial knowledge and overconfidence in their ability to make sound investment decisions, may engage in more risky financial behaviors as they continue to age, according to new research from the FINRA Investor Education Foundation (FINRA Foundation), in collaboration with researchers from Duke University and Rush University Medical Center.
The study,Does Overconfidence Increase Financial Risk Taking in Older Age?, suggests that, among senior investors, overconfidence in one’s financial knowledge may contribute to risky financial behavior.
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ource: FINRA
Roboadvisers make slow progress gaining ground with investors
September 9, 2020--Many large asset managers have shelled out time and money to develop robo-advisers. But, while assets invested in them are growing, only a small proportion of investors actually use such digital services, according to a report by data and analytics firm Hearts & Wallets.
Just 8 per cent of US households report having money in such services, which typically rely on portfolios made of ETFs, the report says. The company produced its report based on a survey of 5,641 households in July 2019.
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Source: technocodex.com
CFTC's Climate-Related Market Risk Subcommittee Releases Report
September 8, 2020--The Commodity Futures Trading Commission's Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee (MRAC) today released a report entitled Managing Climate Risk in the U.S. Financial System. The Climate Subcommittee voted unanimously 34-0 to adopt the report.
CFTC Commissioner Rostin Behnam, sponsor of the MRAC, noted: "Today would not be possible without the dedication and devotion of the Climate Subcommittee members. They spent tireless hours drafting an incredibly thorough report that has far exceeded expectations. I want to personally thank them for their work on this groundbreaking effort during unprecedented times.
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Source: CFTC.gov
