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U.S. most-favored equity region, tech allocations down: BAML survey
November 13, 2018--Despite market wobbles, the United States is the most favored equity region for global fund managers, who broadly expect the S&P500 index to rise another 12 percent before peaking, Bank of America Merrill Lynch's latest investor survey showed on Tuesday.
The November survey, canvassing investors managing $641 billion, was conducted from Nov 2-8 as funds, relieved over the outcome of U.S. midterm elections, rushed to buy more equities.
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Source: Reuters
SEC Official Warns Leveraged Funds Could Hurt Reputation of ETFs
November 12, 2018--Investment products that use derivatives to improve returns are threatening the reputation of the $3.6 trillion market for exchange-traded funds, according to one of five commissioners at the U.S. Securities and Exchange Commission.
"The risk with levered ETFs is that the entire asset class will be painted with this brush," said Robert Jackson Jr., adding that he fears Americans will buy and hold these products in their retirement accounts, and then get a nasty surprise when they lose their money.
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Source: Bloombergquint.com
UBS Launches the ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN Series B
November 9, 2018--UBS Investment Bank today announced that the ETRACS Monthly Pay 2x Leveraged Small Cap High Dividend ETN Series B (NYSE Arca(R): SMHB), will begin trading on NYSE Arca(R).
SMHB is linked to the monthly compounded 2x leveraged performance of the Solactive US Small Cap High Dividend Index.
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Source: UBS
U.S. Weekly FundFlows Insight Report: Equity Funds and ETFs See Net Outflows Despite Strong Market Returns During the Week
November 8, 2018--November 8, 2018--For the second week in three investors were overall net purchasers of fund assets (including those of conventional funds and ETFs), injecting $19.3 billion for Lipper's fund-flows week ended November 7, 2018.
Fund investors were net purchasers of taxable fixed income funds (+$4.1 billion) and money market funds (+$23.9 billion) while being net redeemers of equity funds (-$8.5 billion) and municipal bond funds (-$256 million).
Market Wrap-Up
Investors appeared to cheer the expected government gridlock resulting from the midterm elections. As expected, the Democrats took control of the House of Representatives, while the Republicans shored up their control of the Senate.
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Source: Thomson Reuters
UBS accused of causing billions in investor losses
November 8, 2018--The US justice department filed a lawsuit against UBS on Thursday, accusing the Swiss bank of causing investors to lose "many billions of dollars" on residential mortgage-backed securities that it issued in the run-up to the financial crisis.
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Source: FT.com
CBO-Monthly Budget Review: Summary for Fiscal Year 2018
November 7, 2018-In fiscal year 2018, the budget deficit totaled $779 billion-$113 billion more than the shortfall recorded in 2017.
Measured as a share of GDP, the deficit increased to 3.8 percent in 2018, up from 3.5 percent in 2017 and 3.2 percent in 2016.
In fiscal year 2018, which ended on September 30, the federal budget deficit totaled $779 billion-$113 billion more than the shortfall recorded in 2017. The deficit increased to 3.8 percent of the nation's gross domestic product (GDP) in 2018, up from 3.5 percent in 2017 and 3.2 percent in 2016. Outlays in 2018 were reduced by a shift in the timing of certain payments; those payments were instead made in fiscal year 2017 because October 1, 2017 (the first day of fiscal year 2018), fell on a weekend. If not for that shift, the deficit in 2018 would have been $823 billion, or 4.1 percent of GDP.
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Source: Congressional Budget Office (CBO)
Lipper U.S. Weekly FundFlows Insight Report: Overall Net Outflows Are Driven by Investors Fleeing Fixed Income Funds
November 2, 2018--Lipper's fund asset groups (including both mutual funds and ETFs) saw $6.2 billion net leave their coffers for the fund-flows week ended Wednesday, October 31. The net outflows were attributable to taxable fixed income funds (-$7.5 billion) and municipal bond funds (-$1.3 billion).
The equity funds (+$2.4 billion) and money market funds (+$176 million) asset groups both took in net new money.
Market Overview
The Dow Jones Industrial Average (+2.17%) and the S&P 500 Index (+2.09%) had bounce-back performances for the fund-flows week ended Wednesday, October 31, but that was not enough to salvage their overall performance for the month of October. The S&P 500 was down 6.94% for the month, its worst monthly performance since September 2011 when it retreated 7.18%. Meanwhile, the Dow lost 5.07% this October.
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Source: Thomson Reuters
SEC Adopts Rules That Increase Information Brokers Must Provide to Investors on Order Handling
November 2, 2018--The Securities and Exchange Commission today announced that it has voted to adopt amendments that will require broker-dealers to disclose to investors new and enhanced information about the way they handle investors' orders.
"In the eighteen years since the Commission originally adopted its order handling and routing disclosure rules, technology and innovation have driven significant changes in the way that our equities market functions and investors transact," said Chairman Jay Clayton. "This rule amendment will make it easier for investors to evaluate how their brokers handle their orders and ultimately make more informed choices about the brokers with whom they do business."
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Source: SEC.gov
SEC Enforcement Division Issues Report on FY 2018 Results
November 2, 2018--The Securities and Exchange Commission's Enforcement Division today issued the annual report of its ongoing efforts to protect investors and market integrity. The report also highlights several significant actions and initiatives that took place in FY 2018.
The report presents the activities of the Division from both a qualitative and quantitative perspective.
"As this report demonstrates, the Division's approach to enforcement is multifaceted and outcomes-oriented with the interests of our Main Street investors front of mind," said SEC Chairman Jay Clayton.
view the SEC Enforcement Division Annual Report-FY18
Source: SEC.gov
CFTC's Office of the Chief Economist Issues Report on Initial Margin Phase 5
October 31, 2018--The Office of the Chief Economist (OCE) of the Commodity Futures Trading Commission (CFTC) today issued, "Initial Margin Phase 5,," a report about uncleared margin rules, which goes into effect on September 1, 2020.
On that date, swaps market participants with between $8 and $750 billion of swaps notional amount must begin to post and collect initial margin on all trades that have at least one swap-dealer counterparty. The market is currently in Phase 3, in which counterparties with $1.5 trillion or more of swaps notional amount are subject to the rules. The OCE paper released today was written to assist regulators in responding to requests for relief from industry participants.
view the OCE Report: Initial Margin Phase 5
Source: CFTC.gov
