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Missing Out: OSC Research Finds Many Millennials Saving, but not Investing
November 27, 2017--A new research study released today by the Ontario Securities Commission (OSC) found that 4 in 5 Ontario millennials (age 18-36) are saving, but only 1 in 2 are investing.
According to Missing Out: Millennials and the Markets, top reasons non-investor millennials gave for avoiding investing included having other financial priorities (68 per cent), not having enough income (66 per cent) or savings (66 per cent), not knowing enough about investing (59 per cent), and concerns about losing money in the markets (57 per cent).
view the OSC Research Study: Missing Out: Millennials and the Markets report
Source: Ontario Securities Commission (OSC)
CFTC.gov Commitments of Traders Reports Update
November 27, 2017--The current reports for the week of November 21, 2017 are now available.
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Source: CFTC.gov
An Index Methodology for Diversifying Business Risk
November 27, 2017--Abstract
This article introduces a new passive weighting methodology for diversifying business risk: functional information system (FIS)-based stratified weighting. The FIS-based stratified-weight approach effectively diversifies related business risk (RBR), such as supply chain dynamics, customer groups, product types, or other operational attributes that affect groups of companies that share common earnings drivers.
The proposed methodology addresses overconcentrations of business risk that regularly occur in capitalization-weighted or equal-weighted indexes. This approach maintains a diversified weighting of an index’s underlying business risks by allocating constituents to specific RBR groupings, defined using FIS classification, and then fixing the weight of each group via stratification. The motivation behind this methodology is the fact that stock performance is the result of business performance and diversifying business performance is the ultimate goal of a diversified equity index. The authors demonstrate the performance benefit of stratified-weighted versions of the S&P 500 and S&P MidCap 400 indexes over traditional market capitalization weighting and equal weighting, especially following periods of economic stress. They find that FIS-based stratified-weight indexes deliver consistent and significantly higher returns relative to standard capitalization-weighted market indexes and equal-weighted indexes (on average, 389 bps per annum for the S&P 500 and 175 bps per annum for the S&P 500 equal weight), while exhibiting comparable beta and volatility.
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Source: Rory Riggs, Jonathan Chandler and Mark T. Finn The Journal of Index Investing Winter 2017
AdvisorShares Weekly Market Review-Market Up, VIX Down; We Know, It’s Shocking!
November 27, 2017--Highlights of the Week Ending 11/24/2017
Macro
The list of factors with the potential to influence markets appears to be getting longer and some of those factors seem to be moving in a more serious direction but no matter, equities continue to rally.
The Dow Jones Industrial Average gained 0.86%, the S&P 500 added 0.93%, the NASDAQ jumped 1.57% and the Russell 2000 was up 1,72% while the VIX fell to 9.65. Bespoke Investment Group reported over the weekend that the market is in its longest streak by far where more than 40% of the index's constituents are above their respective 50 day moving averages going back to 1990. Although the title of this week's update is an attempt to be funny, it reiterates an important point.
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Source: AdvisorShares
Manulife Investments Launches Two New Multifactor ETFs
November 27, 2017--Manulife today announced two new Manulife Exchange Traded Funds (ETFs) have closed their initial offering of units and will begin trading on the Toronto Stock Exchange today.
Manulife Investments will offer two new multifactor ETFs sub-advised by Dimensional Fund Advisors Canada ULC.
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Source: Manulife Investments
Higher inflation on the horizon? Investors reach for TIPS funds
November 27, 2017--Investors last week poured into funds that provide protection against higher US inflation in a sign that some money managers expect a tight labour market and strong economy to finally halt a long stretch of muted price growth.
Funds that hold inflation-protected Treasuries (TIPS) garnered $1.2bn in net inflows in the week to November 22, according to Bank of America Merrill Lynch calculations based on EPFR data.
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Source: FT.com
Renaissance Capital Scheduled U.S. IPOs-Week of 11/27/17
November 27, 2017----U.S. IPOs-Week of 11/27/17
IPO Commentary
US IPO Week Ahead: Another quiet week before 2017 final stretch: taking a look at what could launch
There are no deals on the calendar in another quiet week ahead of an anticipated pre-holiday IPO flurry. We believe we are on pace to see roughly 160 IPOs in 2017, up 52% from last year, as companies look to price before...
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Source: Renaissance Capital
BlackRock and Vanguard are smart beta's biggest winners
November 27, 2017--BlackRock's smart beta assets have ballooned by almost 180 per cent to $288bn over the past five years, leaving rival asset managers scrambling to close the gap on the world's largest fund house.
The figures, collected by Morningstar, the data provider, show the New York-listed investment manager and its chief rival, Vanguard, have been the big winners when it comes to the growth of smart beta.
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Source: FT.com
EMQQ, The First Broad-Based Emerging Markets Internet and Ecommerce ETF, Marks Third Anniversary
November 22, 2017--Fund is up over 68% in 2017 and now has more than $300 million in AUM; top holdings include Alibaba, Tencent, Mercado Libre and Yandex
EMQQ, the first broad-based emerging markets Internet and Ecommerce exchange traded fund (ETF), marked its third anniversary earlier this month. As of November 13, 2017, the fund had $347.57 million in assets under management, and had returned an average of 14.92% annually since launch, compared to 10.24% percent for the S&P 500 and 5.70% percent for the MSCI Emerging Markets Index.
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Source: Exchange Traded Concepts, LLC
Minutes of the Federal Open Market Committee, October 31-November 1, 2017
November 22, 2017--The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on October 31-November 1, 2017.
Staff Review of the Economic Situation
The information reviewed for the October 31-November 1 meeting indicated that labor market conditions generally continued to strengthen and that real gross domestic product (GDP) expanded at a solid pace in the third quarter despite hurricane-related disruptions. Although the effects of the recent hurricanes led to a reported decline in payroll employment in September, the unemployment rate decreased further. Retail gasoline prices jumped in the aftermath of the hurricanes, but total consumer price inflation, as measured by the 12‑month percentage change in the price index for personal consumption expenditures (PCE), remained below 2 percent in September and was lower than early in the year. Survey-based measures of longer-run inflation expectations were little changed on balance.
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Source: federalreserve.gov
