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Morgan Stanley Makes Historic ETF Comeback With Six New Funds
February 1, 2023--Firm returns to industry after decades with ESG-tilted range
Wall Street giant has $5.5 trillion in wealth, investment arms
Three decades after helping give birth to the ETF industry, Morgan Stanley is officially back in the game in what could be a milestone moment for the investing world.
Six new products from the James Gorman-led firm began trading Wednesday, offering socially conscious strategies that target US and international equities and fixed income. They’re set to be the first of many from the bank, as they form the basis of a new ETF platform in its investment management unit.
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Source: bloomberg.com
Latin America Faces Slowing Growth and High Inflation Amid Social Tensions
February 1, 2023--Restoring macro stability and boosting growth will require carefully-crafted policies that will help mitigate discontent
Latin America's economies held up well last year despite the shocks from Russia's invasion of Ukraine and global interest rate hikes.
In 2022, the region's economy expanded by nearly 4 percent, employment recovered strongly, and the service sector rebounded from the damage caused by the pandemic.
Inflationary pressures are receding in many countries due to the early and determined efforts of central banks as well as lower global prices of food and energy. However, core inflation (that is, excluding food and energy), remains high at around 8 percent in Brazil, Mexico, and Chile (and somewhat higher in Colombia but lower in Peru).
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Source: imf.org
AllianzIM Launches Two New Buffered ETFs that Hedge the S&P 500 Exposure
February 1, 2023-Latest ETFs expand access for investors looking for risk mitigation in portfolios after volatile 2022
Allianz Investment Management LLC (AllianzIM), a wholly-owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life(R), announced today the launch of its February series of U.S. Large Cap Buffered Exchange Traded Funds (ETFs).
The series includes two ETFs with a 12-month Outcome Period: the AllianzIM U.S. Large Cap Buffer10 Feb ETF (NYSE Arca: FEBT) and the AllianzIM U.S. Large Cap Buffer20 Feb ETF (NYSE Arca: FEBW).
The February series is the latest expansion of AllianzIM's U.S. Large Cap Buffered ETFs, offering investment professionals and investors access to new risk mitigation strategies as market uncertainty persists and fears of a recession mount in 2023. The ETF suite is designed to provide a downside Buffer of 10% or 20% against market drops, while allowing investors the opportunity to participate in the upside potential of the SPDR S&P 500 ETF Trust up to a stated Cap.
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Source: Allianz Investment Management LLC
Horizon Kinetics Launches the Horizon Kinetics SPAC Active ETF (SPAQ) and the Horizon Kinetics Medical ETF (MEDX)
January 30, 2023--Horizon Kinetics LLC today launched the Horizon Kinetics SPAC Active ETF (NASDAQ:SPAQ) and the Horizon Kinetics Medical ETF (NASDAQ:MEDX). SPAQ was converted from the Kinetics Alternative Income Mutual Fund, and MEDX from the Kinetics Medical Mutual Fund, as part of tax-free reorganizations effective after the close of business on January 27, 2023.
Both ETFs now have substantially lower shareholder fees or expenses. Both are actively managed funds that began trading on NASDAQ today (January 30, 2023). Since its arrival into the active ETF space in early 2021, Horizon Kinetics, with $8 billion in total assets, has launched 4 actively managed ETFs with $1.3 billion in assets.
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Source:: Horizon Kinetics, LLC
IMF Working Paper-Commercial Real Estate in Crisis: Evidence from Transaction-Level Data
January 27, 2023--Summary:
During the past two decades, the commercial real estate (CRE) market has been impacted by major disruptions, including the global financial crisis and the Covid-19 pandemic. Using granular data from the U.S., we document how these crises have unfolded and elaborate on the role of heterogeneity and underlying shocks.
Both a set of reduced-form approaches and a structural framework suggest a prominent role for demand-side local factors in the short run, along with significant shifts in preferences during crisis episodes. However, valuations become more closely linked to macro-financial factors over the long term. A one-standard deviation tightening in financial conditions is associated with a drop of about 3% in CRE prices in the following quarter, with a stronger impact on the retail sector and milder effects in states where household indebtedness is lower.
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Source: imf.org
Investors jump into European stocks at fastest pace in nearly a year as U.S. equity inflows remain muted: BofA Global
January 27, 2023--Investors poured $3.4 billion into European stock funds in the week to Wednesday, as slowing inflation in Europe and China's relaxation of strict zero-Covid policies made investors hunt for gains in non-U.S. equities, according to analysts at BofA Global Research, citing EPFR Global data in a weekly note.
The weekly inflows into European stock funds were the largest since February 2022, and is the second straight week of inflows following an entire year of outflows
Meanwhile, U.S. equity funds witnessed their first weekly inflow in four weeks. BofA strategists said there were $300 million of inflows to U.S. stock funds in the week through Jan. 25, the first positive flow in a month.
The BofA data also showed emerging-market debt and equity saw their strongest inflows in almost two years, averaging $7.1 billion over the last four weeks.
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Source: marketwatch.com
Passive US funds poised to overtake active, ISS says
January 25, 2023--Research group forecasts 56% of total US fund assets will be passively managed by 2027
Index funds will control more than half of long-term invested US assets by the end of 2027, according to ISS Market Intelligence.
Active fund's share of the US market will fall from 53 per cent in 2022 to 44 per cent in five years, the research group, part of the Institutional Shareholder Services group, estimates. Most of the market share will go to index exchange traded funds, which are expected to garner $2tn in new sales. Active mutual funds, meanwhile, will bear the brunt of outflows, according to the report, with an estimated $1.4tn in net redemptions expected over the next five years.
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Source: ft.com
NYSE says manual error triggered major trading glitch
January 25, 2023-- The New York Stock Exchange said on Wednesday a manual error triggered a technical issue that prevented the opening auctions in some listed stocks, leading to widespread confusion and attracting a review from the U.S. Securities and Exchange Commission.
The glitch, which occurred on Tuesday, impacted stocks of major companies including 3M (MMM.N), Wells Fargo & Co (WFC.N) and Verizon Communications Inc (VZ.N).
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Source: reuters.com
SEC Proposes Rule to Prohibit Conflicts of Interest in Certain Securitizations
January 25, 2023--The Securities and Exchange Commission today proposed a rule to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. The rule is intended to prevent the sale of asset-backed securities (ABS) that are tainted by material conflicts of interest.
Specifically, the rule would prohibit securitization participants from engaging in certain transactions that could incentivize a securitization participant to structure an ABS in a way that would put the securitization participant's interests ahead of those of ABS investors. The Commission originally proposed a rule to implement Section 27B in September 2011.
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Source: SEC.gov
CBO-The Demographic Outlook: 2023 to 2053
January 24, 2023--In CBO's projections, the U.S. population increases from 336 million people in 2023 to 373 million people in 2053. Population growth is increasingly driven by net immigration which accounts for all population growth beginning in 2042.
Summary
The size of the U.S. population, as well as its age and sex composition, affects the economy and the federal budget. For example, the size of the population ages 25 to 54 affects the number of people employed; likewise, the size of the population age 65 or older affects the number of beneficiaries of federal programs such as Social Security and Medicare.
In this report, the Congressional Budget Office describes its population projections, which underlie the agency's baseline budget projections and economic forecast that will be published later this year.
Population. In CBO's projections, the Social Security area population-the relevant population for calculating Social Security payroll taxes and benefits and the measure of population used in this report-increases from 336 million people in 2023 to 373 million people in 2053. As growth of the population age 65 or older outpaces growth of younger age groups, the population is projected to continue to become older.
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Source: CBO (congressional Budget Office)
