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Fund industry heavyweights muscle in on ETF market
May 30, 2022--Morgan Stanley, Neuberger Berman, SEI and Matthews Asia have launched or are poised to debut products
Neuberger Berman and a clutch of some of the world's biggest investors are joining the exchange traded fund industry for the first time, as they seek a foothold in a fast-growing sector that has piled pressure on active managers to justify their fees.
The US investment house is one of a group including Morgan Stanley, SEI and Matthews Asia-together managing $3tn-that have recently launched or signalled their intention to unveil their debut ETFs.
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Source: ft.com
One River's spot Bitcoin ETF application rejected by SEC
May 27, 2022--The proposed environmentally conscious spot ETF was found to be insufficiently protected against fraud and manipulation, like many ETF proposals before it.
The United States Securities and Exchange Commission (SEC) maintained its perfect record for rejecting Bitcoin (BTC) spot exchange-traded fund (ETF) applications Friday when it disapproved a rule change to allow cryptocurrency-focused hedge fund One River Digital to offer the One River Carbon Neutral Bitcoin Trust on the New York Stock Exchange Arca.
The decision comes somewhat ahead of schedule, as the agency had extended the original deadline to June 2 to allow more time for consideration.
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Source: cointelegraph.com
Short-Sellers Target Biggest US Bitcoin ETF as Drawdown Deepens
May 27, 2022--The first US Bitcoin-futures backed exchange-traded fund is turning into a target for crypto bears.
Short interest in the $748 million ProShares Bitcoin Strategy ETF (ticker BITO) as a percentage of shares outstanding is nearly 11%, close to the highest since the fund's October 2021 inception, IHS Markit Ltd. data show.
Meanwhile, the fund’s ratio of open interest in bearish put contracts to call open interest has soared since mid-April to all-time highs.
That suggests that crypto bears are flocking to BITO as a way to short sell the token as they wait for the rollout of inverse Bitcoin ETFs, which would bet against it.
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Source: bnnbloomberg.ca
BondBloxx Investment Management Launches New ETFs, Further Accelerating their Growth
May 26, 2022--May 26, 2022--BondBloxx Investment Management, launched in October of 2021 to provide precision ETF exposures for fixed income investors, announced the launch of three new ETFs which begin trading today on NYSE Arca. The ETFs track ratings-specific sub-indices of the ICE BofA US Cash Pay High Yield Constrained Index2. The new BondBloxx products add to seven sector-specific high yield ETFs launched earlier this year.
"We founded BondBloxx to provide modern tools for modern markets," said BondBloxx co-founder Tony Kelly. "And our targeted products make it possible for investors to finally execute sophisticated investment views through ETFs-which are a time-honored tool to access liquidity and efficient exposure, especially in today's volatile markets."
"As rising rates and volatility continue to impact the corporate bond market, the need for new tools to manage fixed income exposure is becoming even more critical," said BondBloxx co-founder and portfolio manager Elya Schwartzman.
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Source: uppermichiganssource.com
SEC-What's in a Name? Aligning Fund Names with Investor Expectations
May 25, 2022--Today, the Commission draws on more than two decades of experience analyzing fund names and considering how certain names may mislead investors about a fund’s investment focus, potentially resulting in misallocations of capital.
Today's proposal would modernize the existing "Names Rule" in light of current fund practices, enhance consistency of the rule's application across funds, and provide key safeguards for investors.[1] Fund names, as with any type of branding, provide a critical means by which sponsors market their funds and convey information to investors, and today's proposal recognizes that investors may often rely on fund names in deciding where to invest their savings.
I’m pleased to support today's proposal which would bring meaningful improvements in aligning investor expectations and understanding with a fund's actual focus and the strategies it pursues.
view the Amendments to the Fund "Names Rule"
Source: sec.gov
Horizons Expands Engagement with Solactive with ETF Tracking Solactive North American Listed Copper Producers Index, First of Its Kind in Canada
May 25, 2022--May 25, 2022--Recent years have seen a surge in the popularity of thematic investments. These strategies allocate assets into stocks or other investments based on specific business sectors or themes, intending to benefit from the materialization of trends, technological innovation, and advancements. Copper, for instance, is being increasingly used in a wide range of industries that are tied to economic expansion, like infrastructure, technology, electronics, electric cars, and renewable energy.
Envisaging this potential, ETF issuer Horizons ETFs expanded its engagement with Solactive and launched the Horizons Copper Producers Index ETF, which aims to replicate the Solactive North American Listed Copper Producers Index. It is the first ETF in Canada to provide investors with exposure exclusively to companies involved in copper mining.
The Solactive North American Listed Copper Producers Index is designed to provide exposure to the performance of securities that are active in the copper ore mining industry and includes small, mid, and large-capitalization companies, listed in North America
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Source: Solactive AG
SEC Proposes to Enhance Disclosures by Certain Investment Advisers and Investment Companies About ESG Investment Practices
May 25, 2022--The Securities and Exchange Commission today proposed amendments to rules and reporting forms to promote consistent, comparable, and reliable information for investors concerning funds' and advisers' incorporation of environmental, social, and governance (ESG) factors.
The proposed changes would apply to certain registered investment advisers, advisers exempt from registration, registered investment companies, and business development companies.
"I am pleased to support this proposal because, if adopted, it would establish disclosure requirements for funds and advisers that market themselves as having an ESG focus," said SEC Chair Gary Gensler. "ESG encompasses a wide variety of investments and strategies. I think investors should be able to drill down to see what's under the hood of these strategies. This gets to the heart of the SEC's mission to protect investors, allowing them to allocate their capital efficiently and meet their needs."
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Source: SEC.gov
CBO-The Budget and Economic Outlook: 2022 to 2032
May 25, 2022--In CBO's projections, assuming that current laws generally remain unchanged, the federal deficit totals $1.0 trillion in fiscal year 2022 and averages $1.6 trillion per year from 2023 to 2032. Real GDP grows by 3.1 percent this year.
The Budget
CBO projects that the federal budget deficit will shrink to $1.0 trillion in 2022 (it was $2.8 trillion last year) and that the annual shortfall would average $1.6 trillion from 2023 to 2032. The deficit continues to decrease as a percentage of gross domestic product (GDP) next year as spending related to the coronavirus pandemic wanes, but then deficits increase, reaching 6.1 percent of GDP in 2032. The deficit has been greater than that only six times since 1946.
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Source: CBO (Congressional Budget Office)
PGIM Investments Launches Floating Rate ETF
May 24, 2022--PGIM Investments continues to build out its actively managed fixed income ETF lineup with the launch of the PGIM Floating Rate Income ETF (NYSE Arca: PFRL). The new ETF, which seeks to maximize current income by investing primarily in senior floating rate loans, is managed by PGIM Fixed Income,1 one of the largest and most experienced leveraged finance managers with $38 billion in floating rate loan assets under management as of March 31, 2022.
PGIM is the $1.4 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU).
The PGIM Floating Rate Income ETF’s investment strategy mirrors the $4.6 billion PGIM Floating Rate Income Fund which ranks in Morningstar’s top decile for total returns over the 3-, 5- and 10-year periods ending March 31, 2022.
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Source: PGIM Investments LLC
Minutes of the Federal Open Market Committee, May 3-4, 2022
May 24, 2022--Developments in Financial Markets and Open Market Operations
The manager turned first to a discussion of monetary policy expectations in the United States. Federal Reserve communications since the March FOMC meeting were perceived as signaling a more rapid removal of policy accommodation than had been expected, resulting in significant shifts in expectations regarding the path of the federal funds rate.
For the current meeting, federal funds futures implied around 50 basis points of policy rate tightening, and Open Market Desk survey respondents assigned an average probability of 80 percent to that outcome.
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Source: federalreserve.gov
