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SEC-Fee Rate Advisory #3 for Fiscal Year 2023
March 1, 2023--Pursuant to Section 31(j)(2) of the Securities Exchange Act of 1934, the Commission has determined that a mid-year adjustment to the Section 31 fee rate for fiscal year 2023 is not required.
These adjustments do not directly affect the amount of funding available to the SEC.
The Section 31 fee rate for fiscal 2023 will remain at the current rate of $8.00 per million, as previously announced on January 23, 2023. This rate will remain in place until September 30, 2023, or 60 days after the enactment of a regular FY 2024 appropriation, whichever is later. The Section 31 assessment on round turn transactions in security futures also will remain at $0.0042 per transaction.
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Source: SEC.gov
10-year Treasury yield briefly hits highest level since November
February 28, 2023--U.S. Treasury yields were little changed on Tuesday to cap off a month of sharp gains, as traders weighed the prospects of tighter for longer monetary policy.
The yield on the benchmark 10-year Treasury note was last lower by 1 basis point at 3.912%. Earlier, it touched a high of 3.983%, its highest level since Nov. 10.
Meanwhile, the yield on the 30-year Treasury bond rose less than 1 basis point to 3.922%.
The 2-year yield climbed slightly to 4.801% after reaching its highest level since November on Monday. Yields move inversely to prices.
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Source: cnbc.com
iShares co-creator Morgan Stanley finally enters ETF race
February 23, 2023--Increasing popularity of actively managed vehicles has lured a number of heavyweight managers to the market
In a parallel universe Morgan Stanley might be Europe's pre-eminent exchange traded fund provider.
In this one it is the wet-behind-the-ears newbie, beaten to the punch by the more than 400 issuers globally that have already entered the ETF fray.
Despite its tardiness Morgan Stanley, the 18th-largest manager in the world with assets of $1.3tn, and the biggest without ETFs, has ambitious plans.
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Source: ft.com
Morgan Stanley, Schwab Join Scrum over SEC's Mutual-Fund Pricing Proposal
February 23, 2023--The companies are echoing industry groups arguing that the sweeping changes required for the implementation of the proposal would harm investors.
The Securities and Exchange Commission's proposal to tweak how mutual fund shares are priced has met fierce opposition from Wall Street giants including Morgan Stanley, BlackRock, Charles Schwab and Fidelity Investments, as well as consumer advocates, according to news reports.
In November, the regulator proposed imposing so-called "swing pricing" on most mutual funds, allowing funds to continue striking their net asset value daily, as is the current practice, but allowing the price per share to change during times of net redemptions, in a bid to pin the costs of trading onto the existing shareholders rather than the remaining ones.
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Source: financialadvisoriq.com
ETF Traders Ditch Risk Assets En Masse, Pile Billions Into Bonds
February 22, 2023--Major credit ETFs JNK and LQD each post outflows of $1 billion
More than $2 billion was added to short-term Treasury products
In the grip of the worst day for stocks in two months, traders in the hyper-liquid world of ETFs ditched equities and corporate bonds and headed for the safety of government debt as yields broke out anew.
Money managers on Tuesday pulled billions of dollars from major exchange-traded funds tracking stocks and credit as hot economic data spurs fresh fears that the Federal Reserve will be forced to ramp up its tightening campaign. A $1 billion outflow hit the-now $7.6 billion SPDR Bloomberg High Yield Bond ETF (JNK) in the largest withdrawal since 2020, according to overnight data compiled by Bloomberg.
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Source: bloomberg.com
Federal Reserve-Minutes of the Federal Open Market Committee, January 31-February 1, 2023
February 22, 2023--Developments in Financial Markets and Open Market Operations
The manager pro tem turned first to a review of U.S. financial market developments. Market participants generally expected U.S. economic growth to moderate this year, all though there was a wide dispersion in views about the extent of a potential slowdown. Market participants interpreted incoming data as pointing to moderating inflation risks.
Against this backdrop, market participants judged that the FOMC would likely slow the pace of rate increases further at the current meeting, and respondents to the Desk's Survey of Primary Dealers and Survey of Market Participants widely expected the Committee to implement a 1/4 percentage point increase in the target range for the federal funds rate.
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Source: federalreserve.gov
Horizon Kinetics Launches Energy & Remediation Exchange Traded Fund (NVIR)
February 22, 2023--Horizon Kinetics LLC today launched the Energy & Remediation ETF (NVIR), an actively managed fund that began trading on the New York Stock Exchange (NYSE) today (February 22, 2023).
This active ETF applies the same proprietary research-driven philosophy-long-term, fundamentals-based and value-oriented -that has differentiated Horizon Kinetics' other products for nearly 30 years.
This fund is unique in that it has a dual, reality-based mandate. Acknowledging the existing and growing demand for carbon-based energy, a portion of the portfolio will own fundamentally attractive, carbon-based energy companies. The second portion of the portfolio will be comprised of remediation companies that employ existing technology that allows carbon-based energy to be generated in a more environmentally sensible manner. Innovative technologies in this "clean energy" space are being developed at a rapid pace. As they are brought online, NVIR will purchase them when warranted by their valuation.
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Source: Horizon Kinetics Energy & Remediation ETF
SEC targets built-in marketing fees in fund-to-ETF conversions
February 18, 2023--One question is whether 12b-1 fees levied on mutual funds can be used to promote them as converted ETFs
The Securities and Exchange Commission is investigating whether 12b-1 fees are being appropriately handled during the process of converting mutual funds to ETFs, compliance consultants say.
Certain mutual fund share classes charge 12b-1 fees, which cover marketing, distribution and shareholder costs. But it is exceedingly rare for ETFs to carry such fees. And companies that convert mutual fund share classes with 12b-1 fees into ETFs could open themselves up to SEC scrutiny, the consultants say.
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Source: ft.com
IMF-Bringing the US Economy Back into Balance
February 16, 2023--The US Federal Reserve has been raising interest rates to restore price stability and to bring balance to the labor market. The demand for new hires is exceeding the supply of available workers in the US, as the unemployment rate has fallen to its lowest level in over 50 years, and this has contributed to higher inflation.
To help bring the economy back into balance, IMF analysis shows that staying the course and keeping interest rates elevated this year will tame inflation. Although these higher rates will temporarily increase unemployment, they will pave the way for stable inflation and sustainable economic growth, which will ultimately help create more jobs in the future.
When prices began rising in 2021, they were initially limited to goods affected by pandemic-related disruptions, such as vehicles. However, by early 2022, rising prices had spread to housing and other services such as hotels and restaurants. Growth of prices in the personal consumption expenditure index is now around 5½ percent, well above the 2 percent target.
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Source: imf.org
AllianzIM's Suite of ETFs Exceeds $1 Billion in Assets
February 15, 2023--It was one of the fastest growing suites of ETFs in the industry in 2022.
Allianz Investment Management LLC (AllianzIM), a wholly-owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life(R), announced its suite of Buffered ETFs has surpassed $1 billion in total assets under management.
It was one of the fastest growing suites of ETFs in the industry in 2022.1
With rising interest ratings and the current geopolitical tensions continuing in 2023, risk mitigation strategies from investors and investment professionals continue to be in high demand, as the majority of investors (83%)* believe the market will remain very volatile this year. To meet this need, AllianzIM is continuing to expand its lineup of Buffered ETFs to provide investors new entry points into the market with downside Buffers against losses. Since debuting in June 2020, AllianzIM has launched 16 Buffered ETFs with six or 12-month outcome periods.
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Source: allianzlife.com
