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Competition for Attention in the ETF Space
January 14, 2021--Abstract
Exchange-traded funds (ETFs) are the most prominent financial innovation of the last three decades. Early ETFs offered broad-based portfolios at low cost. As competition became more intense, issuers started offering specialized ETFs that track niche portfolios and charge high fees. Specialized ETFs hold stocks with salient characteristics--high past performance, media exposure, and sentiment--that are appealing to retail and sentiment-driven investors.
After their launch, these products perform poorly as the hype around them vanishes, delivering negative risk-adjusted returns. Overall, financial innovation in the ETF space follows two paths: broad-based products that cater to cost-conscious investors and expensive specialized ETFs that compete for the attention of unsophisticated investors.
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Source: papers.ssrn.com
BlackRock assets surge to record $8.68tn
January 14, 2021--BlackRock's assets under management swelled to a peak of $8.68tn in the fourth quarter as robust financial markets led by a record run in equities helped the world's biggest fund manager eclipse revenue and profit forecasts.
New York-headquartered BlackRock said on Thursday that revenue rose 13 per cent year-on-year to $4.48bn, while net income climbed by a fifth to $1.57bn.
The company reported earnings per share of $10.18 on an adjusted and diluted basis for the fourth quarter, beating expectations of $9.19 from analysts polled by Bloomberg. Revenue of $4.48bn also beat analyst estimates of $4.31bn.
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Source: dailyuknews.com
Banks, insurers move to shape climate debate as Washington crackdown looms
January 13, 2021--The organizations described their "clear mandate" on climate finance in an unreleased and yet-to-be finalized report that they've been assembling since Joe Biden secured the presidency.
Some of the country's biggest banking and insurance trade groups are poised to pledge trillions of dollars in financing to fight climate change in a move that could give them greater clout in the debate as Democrats step up scrutiny of Wall Street's role in global warming.view more
Source: politico.com
Merlyn.AI Expands its Family of AI-Powered ETFs with the Launch of Two New Members-SectorSurfer Momentum (DUDE)-Best-of-Breed Core Momentum (BOB)
January 13, 2021--Merlyn.AI Corporation (MAI), a Palo Alto-based provider of investment technologies, launches two new ETFs listed on Cboe: DUDE-the SectorSurfer Momentum ETFBOB- the Best-of-Breed Core Momentum ETF.
Following the launch of WIZ in October 2019 and SNUG in February 2020, Merlyn.AI is now expanding its offering of algorithm-driven, AI-powered ETFs that allow investors and Financial Advisors to build customized portfolios with a broad range of expected risk and returns.
Merlyn.AI's artificial intelligence (AI) based technology, including genetic algorithms, advanced signalprocessing and market-data noise reduction, has undergone decades of research and development and hasbeen tested through multiple bull and bear markets.
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Source: alphaarchitect.com
Horizon Kinetics Launches Inflation Beneficiaries Exchange Traded Fund (INFL)
January 12, 2021--Horizon Kinetics Launches Inflation Beneficiaries Exchange Traded Fund (INFL)
Horizon Kinetics LLC announced the launch of its first exchange traded fund (ETF), the Inflation Beneficiaries ETF (INFL), an actively managed fund, which began trading on the New York Stock Exchange (NYSE) today.
This active ETF will be managed using the same long-term, value-oriented, and proprietary research-driven philosophy that has guided the management of the Firm's other products over the more than 20 years since Horizon Kinetics' inception. The ETF seeks to address what Horizon Kinetics sees as the largest threat facing investors: Inflation, by identifying unique, scalable businesses that have the potential to thrive in an inflationary environment.
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Source: Horizon Kinetics
Crypto industry fears impact of proposed Treasury rule
January 11. 2021--A planned new US Treasury rule aimed at stamping out illicit cryptocurrency transactions has drawn strong opposition from the industry, setting up a battle that threatens to cast a shadow over the recent digital currency boom.
The proposal would require custodians and exchanges to collect and report identifying information about large transactions involving unhosted wallets-cryptocurrency accounts held outside financial institutions.
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Source: thefinanceinfo.com
One in 20 ETFs axed in 2020 after failing to build scale
January 11, 2021--Issuers' appetite for new launches meant the total number of funds still grew by 318.
More than one in 20 exchange traded funds were axed last year as surging inflows failed to lift all boats, but issuers' enthusiasm for new launches remained undimmed.
The accelerating rate of fund closures reflects a greater willingness among asset managers to scrap funds that fail to reach profitable scale, as well as a rash of merger and acquisition activity that led some investment houses to prune overlapping products.
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Source: FT.com
Analysis: U.S. IPO market faces first big test of 2021
January 11, 2021--At least eight businesses are set to price initial public offerings (IPOs) in New York in the next three days, seeking to raise a total of nearly $5 billion in what could be the biggest week for new listings in more than five years.
The companies are seeking to capitalize on what has been the strongest IPO market in two decades. Some $83 billion was raised across 203 IPOs in 2020, excluding listings of special purpose acquisition vehicles (SPACs), on U.S. stock exchanges, according to Refinitiv data.
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Source: reuters.com
CBO-Monthly Budget Review: December 2020
January 11, 2021--Summary: The federal budget deficit was $572 billion in the first quarter of fiscal year 2021, the Congressional Budget Office estimates-$215 billion more than the deficit recorded during the same period last year. Revenues were about the same and outlays were 18 percent higher from October through December than during the same perod in fiscal year 2020.
As was the case in fiscal year 2020, outlays increased in the first quarter of 2021 because certain payments that otherwise would have been due on January 1, a holiday, were instead made in December. In addition, unlike last year, certain payments, totaling $24 billion, that normally are made on the third of the month were shifted from January 2021 into December 2020 because January 3 fell on a Sunday. If not for those shifts, the first-quarter deficit (through December 2020) would have been $525 billion, or $191 billion more than the first-quarter deficit of $334 billion in fiscal year 2020.
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Source: CB0 (Congressional Budget Office)
BlackRock and Vanguard face heavy burden of US sanctions on China
January 12, 2021--The Vanguard FTSE Emerging Markets ETF/Index Fund is among the top three mutual fund shareholders in five blacklisted Chinese firms.
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Source: FT.com
