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Is Stock Index Membership for Sale?
October 27, 2021--While major stock market indices are followed by large monetary investments, we document that membership decisions for the S&P 500 index have a nontrivial amount of discretion. We show that firms' purchases of S&P ratings appear to improve their chance of entering the index (but purchases of Moody's ratings do not).
Furthermore, firms tend to purchase more S&P ratings when there are openings in the index membership. Such a pattern is also confirmed by an event study that explores a rule change on index membership in 2002. Finally, discretionary additions exhibit subsequent deterioration in financial performance relative to rule-based additions.
view the NBER Working Paper-Is Stock Index Membership for Sale?
Source: National Bureau of Economic Research (NBER)
Invesco Expands QQQ Innovation Suite to Include Two ESG ETF Offerings
October 27, 2021--Building on the QQQ Innovation Suite's year of success, Invesco and Nasdaq introduce more choices for investors looking to personalize their access to Nasdaq-listed companies
Invesco Ltd. (NYSE: IVZ), a leading global asset management firm, announced today the expansion of the Invesco QQQ Innovation Suite with the introduction of two new Environmental, Social and Governance (ESG) ETF offerings.
The launch of Invesco ESG NASDAQ 100 ETF (QQMG) and Invesco ESG NASDAQ Next Gen 100 ETF (QQJG) advances the firm's goal of offering investors the benefit of personalizing their exposure to the innovative companies listed on The Nasdaq Stock Market.
The Invesco QQQ Innovation Suite now includes six different investment structures that complement Invesco QQQ:
Invesco ESG NASDAQ 100 ETF (QQMG)
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Source: Invesco Ltd.
ProShares Launches Three New Funds, Expanding Thematic ETF Lineup
October 27, 2021--ProShares, a premier provider of ETFs, announced that it has launched three new ETFs. ProShares On-Demand ETF (OND), ProShares Smart Materials ETF (TINT), and ProShares Nanotechnology ETF (TINY).
ProShares has launched six thematic ETFs in 2021, doubling its lineup to 12 thematic ETFs in total.
"We are excited to launch a set of truly innovative funds that give investors access to themes previously not available in the areas of nanotechnology, smart materials, and on-demand platforms," said ProShares CEO Michael L. Sapir. "The future is smaller, smarter, and faster. These latest additions to the ProShares Thematic ETFs lineup provide investors new and efficient ways to access the companies changing how businesses operate, innovate and compete."
The new ETFs and their indexes are:
ProShares ETF : ProShares On-Demand ETF
Ticker: OND
Index: FactSet On-Demand Index
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Source: ProShares
Horizons ETFs Expands Thematic Line-up with Vaccine and Infrastructure Focused ETFs
October 27, 2021--Two new thematic ETFs offer exposure to sectors facing potential long-term structural trends
Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") is pleased to announce the launches of the Horizons Global Vaccines and Infectious Diseases Index ETF ("HVAX") and the Horizons North American Infrastructure Development Index ETF ("BLDR" and together, the "ETFs"). Units of the ETFs will begin trading today on the Toronto Stock Exchange ("TSX") under the ticker symbols HVAX:TSX and BLDR:TSX, respectively.
Thematic investing seeks to capture opportunities created by structural trends. Two areas receiving significant attention over the past 18 months are vaccines, as part of a global pharmaceutical shift, and North American infrastructure investment. Vaccines, and the prevention of infectious disease, alongside infrastructure investment have taken on significant importance recently and have generated considerable market interest. From massive investment by global governments in COVID-19 research and vaccine development, as well as the Biden administration's Build Back Better agenda, which pledges billions of dollars toward renewing U.S. infrastructure, both themes have an opportunity to see long term momentum based on these events.
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Source: Horizons ETFs Management (Canada) Inc.
Invesco launches ESG version of $200bn exchange traded fund
October 27, 2021-- Top tech groups get lower weighting in ETF that tracks Nasdaq-100 index.
A new version of one of the world's biggest exchange traded funds will manage holdings adhering to environmental, social and governance criteria. One feature will be lower weights for some technology titans including Tesla, Facebook and Amazon.
The $200bn QQQ ETF, which tracks the Nasdaq-100 stock index, is the second most actively traded exchange traded fund. On Wednesday the fund manager Invesco launched ESG versions for investors in the US and Europe, based on a new form of the index created by Nasdaq in June.
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Source: ft.com
First Trust Launches Two New Allocation-Based Portfolios of Target Outcome Buffer ETFs
October 27, 2021--FT Cboe Vest Buffered Allocation Defensive ETF
FT Cboe Vest Buffered Allocation Growth ETF
First Trust Advisors L.P. ("First Trust"), a leading exchange-traded fund (“ETF") provider and asset manager, announced today that it has launched the FT Cboe Vest Buffered Allocation Defensive ETF (Cboe: BUFT) and the FT Cboe Vest Buffered Allocation Growth ETF (Cboe: BUFG) (collectively, the “funds").
Both funds seek to achieve their investment objective by investing in a portfolio of Target Outcome Buffer ETFs (the “Underlying ETFs") that seek to provide investors with returns (before fees and expenses) based on the price return of the SPDR(R) S&P 500(R) ETF Trust (“SPY"), up to a predetermined cap, while providing a defined buffer against losses of SPY over a Target Outcome Period of one year.
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Source: First Trust
'Ruthless' bitcoin ETF fee war looms after Van Eck filing
October 25, 2021--Asset manager's planned launch will significantly undercut ProShares' BITO and Valkyrie's BTF
A potentially "brutal" price war for US-listed bitcoin exchange traded funds could kick off as soon as Monday, less than a week after the launch of the first such vehicle.
Van Eck has lodged a filing with the US Securities and Exchange Commission to launch its Bitcoin Strategy ETF (XBTF) "as soon as practicable" and signalled that it will charge a management fee of just 65 basis points.
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Source: ft.com
State Street says it has no plan to offload asset management arm
October 22, 2021--ETFs help fuel 26% surge in assets under management in 12 months to September 30
State Street has no plans to relinquish its asset management arm, executives said, as the company revealed exchange traded funds had buoyed a 26 per cent jump in assets under management in the year to September 30.
The executives, speaking during the company's third-quarter earnings call, declined to comment on reports that the manager had been in dealmaking talks with rivals about its fund business. Instead, they underscored how important the unit was for the company.
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Source: ft.com
Regional Economic Outlook, October 2021, Western Hemisphere: A Long and Winding Road to Recovery
October 21, 2021--Regional Economic Outlook for Latin America and the Caribbean, October 2021
An economic recovery is underway in Latin America and the Caribbean (LAC) but the pandemic still casts shadows on much of the region. The recovery was robust in the first quarter of 2021 but lost momentum in some countries in the second quarter, reflecting the rebound in COVID-19 cases.
Real GDP is projected to grow by 6.3 percent in 2021, followed by a more moderate growth of 3 percent in 2022, but would not catch up with pre-pandemic trends in the medium term as persistent weakness in labor markets raises risks of scarring.
Broadly favorable external conditions, high commodity prices, and pent-up demand support short-term growth, while monetary and fiscal policy reversals work in the other direction. Risks to the outlook are tilted downward.
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Source: IMF.org
Financial Stability Oversight Council Identifies Climate Change as an Emerging and Increasing Threat to Financial Stability
October 21, 2021-In First Step, FSOC Releases Report and Recommendations on Climate-related Financial Risk
The Financial Stability Oversight Council (FSOC) has released a new report in response to President Biden's Executive Order 14030, Climate-related Financial Risk. For the first time, FSOC has identified climate change as an emerging and increasing threat to U.S. financial stability.
The report and accompanying recommendations demonstrate FSOC's commitment to building on and accelerating existing efforts on climate change through concrete recommendations for member agencies to:
Assess climate-related financial risks to financial stability, including through scenario analysis, and evaluate the need for new or revised regulations or supervisory guidance to account for climate-related financial risks;
Enhance climate-related disclosures to give investors and market participants the information they need to make informed decisions, which will also help regulators and financial institutions assess and manage climate-related risks;
Enhance actionable climate-related data to allow better risk measurement by regulators and in the private sector; and
Build capacity and expertise to ensure that climate-related financial risks are identified and managed.
view the Financial Stability Oversight Council report on Climate-Related Financial Risk 2021
Source: treasury.gov
