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ETFs charge into collateralised loan obligations
June 1, 2023--Since the first two US-domiciled CLO ETFs launched in 2020, seven more have come to market.
The drive for diversification is pushing more innovation in the market.
Since the first two US exchange traded funds offering exposure to collateralised loan obligations launched in 2020, seven more have come to market, Morningstar data shows.
In all, the ETFs have about $2.8bn in assets under management.
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Source: ft.com
Federal Reserve Beige Book May 31, 2023
May 31, 2023--Overall Economic Activity
Economic activity was little changed overall in April and early May. Four Districts reported small increases in activity, six no change, and two slight to moderate declines. Expectations for future growth deteriorated a little, though contacts still largely expected a further expansion in activity.
Consumer expenditures were steady or higher in most Districts, with many noting growth in spending on leisure and hospitality. Education and healthcare organizations saw steady activity on balance.
Manufacturing activity was flat to up in most Districts, and supply chain issues continued to improve. Demand for transportation services was down, especially in trucking, where contacts reported there was a "freight recession." Residential real estate activity picked up in most Districts despite continued low inventories of homes for sale. Commercial construction and real estate activity decreased overall, with the office segment continuing to be a weak spot. Outlooks for farm income fell in most districts, and energy activity was flat to down amidst lower natural gas prices. Financial conditions were stable or somewhat tighter in most Districts. Contacts in several Districts noted a rise in consumer loan delinquencies, which were returning closer to pre-pandemic levels. High inflation and the end of Covid-19 benefits continued to stress the budgets of low- and moderate-income households, driving increased demand for social services, including food and housing.
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Source: federalreserve.gov
Franklin Templeton to buy Putnam Investments for more than $1bn
May 31, 2023-- Acquisitive California asset manager strikes deal that will expand business in alternatives and retirement plans
Franklin Templeton has agreed to buy rival Putnam Investments for more than $1bn as the California-based asset manager continues its expansion into alternative products and retirement plans.
Franklin will pay Putnam's owner, Great-West Lifeco, $925mn in cash and shares up front and up to $375mn more over the next seven years if revenue targets are reached. The deal gives the Canadian insurer a 6.2 per cent stake in Franklin.
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Source: ft.com
Rise of the tech giants exposes the problem of index distortions
May 30, 2023--Investors need to check whether passive investment vehicles deliver the diversification they want
Mega market cap stocks are eating their indices, distorting their usefulness in some cases as market gauges for investors.
The most widely used index in the world is the S&P 500, which is supposed to be a broad barometer of the US stock market but has increasingly been driven by a small number of tech giants. This year, the S&P 500 is up by about 10 per cent but with much of its returns driven by Apple, Microsoft, Amazon, Alphabet, Nvidia, Meta and Tesla.
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Source: ft.com
ETF share of US market turnover jumps to a record 31%
May 29, 2023--Surge reignites debate over ETF influence and underlines increasing use to rapidly change market exposure
Exchange traded funds accounted for a record 30.7 per cent of US stock market turnover last year, a jump of more than a fifth from their 25.3 per cent share in 2021, raising questions about their seemingly unstoppable rise.
The data, revealed in the latest report from the Investment Company Institute, a US trade body, reignites concerns about their influence on the broader market and underlines their increasing use as shorter-term trading instruments for participants looking to rapidly change market exposure, analysts say.
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Source: ft.com
IMF-United States of America: Staff Concluding Statement of the 2023 Article IV Mission
May 26, 2023-- Resilient Demand and a Robust Labor Market
The U.S. economy has proven resilient in the face of the significant tightening of both fiscal and monetary policy that took place in 2022. Consumer demand has held up particularly well, boosted initially by a drawdown of pent-up savings and, more recently, by solid growth in real disposable incomes.
Prime age labor force participation has risen above its pre-pandemic peak, the unemployment rate for women and African Americans has fallen to historical lows, and real wages have been rising faster than inflation since mid-2022. Growth of around 1.2 percent (on a q4/q4 basis) is expected for this year, modestly picking up momentum later in 2024. This slowing, but still-solid, growth is expected to be associated with unemployment rising slowly to close to 4½ percent by the end of 2024.
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Source: imf.org
Global X ETFs Launches the Global X Carbon Credits Strategy ETF (NTRL)
May 25, 2023--Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of the Global X Carbon Credits Strategy ETF (NTRL). This fund, which invests in a basket of carbon credit or allowance futures across geographies, is Global X's latest addition to its growing suite of thematic'based funds.
As the concentration of greenhouse gases in the atmosphere increases, decarbonization has become a major priority for policymakers and investors alike. Carbon credits, also known as carbon allowances, are an emerging tool in the fight against climate change. These tradeable permits are issued by governments and allow the holder the right to emit one unit of emission per credit, generally one ton of carbon dioxide (CO2). Under these cap-and-trade programs, where regulators can set limits or caps on a company's carbon emissions, carbon credits can be exchanged between companies.
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Source: Global X Management Company LLC
Qraft Technologies Launches AI-Pilot U.S. Large Cap Dynamic Beta and Income ETF
May 24, 2023--The new ETF leverages the firm's proprietary risk model to assess market drawdown risk, seeking to deliver an optimized AI driven equity allocation for investors
Qraft Technologies, a leading invest=tech company developing artificial intelligence investing solutions backed by SoftBank, announces the launch of its newest ETF, the QRAFT AI-Pilot U.S. Large Cap Dynamic Beta and Income ETF (NYSE: AIDB).
A first for the ETF space, AIDB leverages Qraft's proprietary AI-powered risk model making it the only, fully AI-powered risk managed ETF in the market. By accounting for over 70 macro and market data sets, assessing factors like momentum, volatility and correlation, AIDB will oscillate exposure between broad-based US Large Cap equities and cash/cash equivalents based on the AI's perceived market risk on a weekly basis.
By doing so, the fund seeks to provide downside mitigation against extreme losses and lower volatility of investors' portfolios.
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Source: Qraft Technologies
BNY Mellon Investment Management Launches the BNY Mellon Women's Opportunities ETF and BNY Mellon Innovators ETF
May 17, 2023--The Two Actively Managed Thematic ETFs are Sub-Advised by Newton Investment Management
BNY Mellon Investment Management, one of the world's largest asset managers with $1.9 trillion in assets under management1, today announced the launch of BNY Mellon Women's Opportunities ETF (ticker: BKWO) and BNY Mellon Innovators ETF (ticker: BKIV).
Listed on Nasdaq, both ETFs are sub-advised by Newton Investment Management North America, LLC (Newton), a BNY Mellon investment firm and a leading equity and multi-asset manager.
"This addition to our growing suite of ETFs provides investors with access to Newton's deep experience in thematic investing," said David DiPetrillo, Head of North America Distribution at BNY Mellon Investment Management. "Through Newton's multi-dimensional research platform combined with fundamental research and analysis, these ETFs will enable investors to potentially benefit from themes we believe will drive economic and societal growth and progression."
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Source: BNY Mellon Investment Management
Fund groups race to launch first US ether futures ETF
May 16, 2023--Direxion, Roundhill Investments, Bitwise and Valkyrie file for launch immediately after Grayscale
Five ETF issuers filed to launch ether futures ETFs last week, in what could become a "winner-take-most" scenario, analysts say.
Grayscale was the first issuer to act, filing on May 9 to launch the Grayscale Ethereum Futures ETF, based on the world's second-largest cryptocurrency, behind bitcoin.
Direxion, Roundhill Investments and Bitwise followed on May 10 with their own versions, filings show, while Valkyrie lodged an application on May 12.
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Source: ft.com
