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Minutes of the Federal Open Market Committee, November 4-5, 2020
November 25, 2020--Developments in Financial Markets and Open Market Operations
The System Open Market Account (SOMA) manager first discussed developments in financial markets. Financial conditions were little changed, on net, over the intermeeting period and remained accommodative. Market participants suggested that evolving expectations for U.S. fiscal policy as well as stronger-than-expected economic data and corporate earnings reports helped support equity prices.
Later in the intermeeting period, however, rising COVID-19 cases in Europe and the United States weighed on the outlook, and equity prices reversed some of their earlier gains.
Implied volatility in the equity market moved higher during the intermeeting period, reflecting uncertainties associated with the U.S. election and the future path of fiscal policy as well as concerns about the trajectory of COVID-19 cases.
Market participants' expectations for the path of the federal funds rate were little changed over the intermeeting period. In the Open Market Desk's Survey of Primary Dealers and Survey of Market Participants, respondents' views on when the Committee will most likely start raising the target range for the federal funds rate were centered around 2024. Expectations for the economic conditions that will prevail when the FOMC first lifts the target range were little changed since the September surveys.
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Source: federalreserve.gov
From mutual fund to ETF: first conversion nears completion
November 24, 2020--Transfer will be result of months of negotiations and efforts to reach shareholders
After 18 months of legal and regulatory negotiations, tax considerations and a massive effort to reach out to direct shareholders, Guinness Atkinson expects to complete the industry's first transformation of a mutual fund into an ETF by year-end, according to its chief executive.
The company hopes to execute the conversion of its $17m Dividend Builder and $4m Asia Dividend Builder mutual funds into ETFs on December 18, the company disclosed.
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Source: FT.com
Mutual fund conversions to ETFs set to gather momentum, experts say
November 23, 2020--Latest attempt by Dimensional could be start of 'significant trend' if move proves to be successful
Moves by two US asset managers to convert some of their mutual funds into exchange traded funds could trigger a wave of copycat manoeuvres by rival houses, industry figures believe.
Texas-based Dimensional Fund Advisors said last week that it intends to convert six of its mutual funds, with total assets of $20bn, into actively managed ETFs during 2021. It has also launched its first ever standalone ETFs, two of which, covering US (DFAU) and international (DFAI) core equity, listed last week.
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Source: FT.com
Options Listed for MSOS, the First-Ever US Cannabis ETF
November 23, 2020--AdvisorShares Pure US Cannabis ETF (MSOS) Joins Sister Fund YOLO with Listed Options
November 23, 2020--AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), today announced that AdvisorShares Pure US Cannabis ETF (Ticker: MSOS) options are now listed for trading.
The actively managed MSOS became the first U.S.-listed active ETF to deliver exposure dedicated solely to American cannabis companies, including multi-state operators (MSOs).
MSOs are U.S. companies directly involved in the legal production and distribution of cannabis in states where approved. This ETF with its apt ticker seeks long-term capital appreciation by investing entirely in legal, domestic cannabis equity securities. Its domestic equity strategy allows MSOS to allocate its underlying portfolio among MSO companies as well as other U.S.-based cannabis-focused areas such a REITs, cannabidiol (CBD), pharmaceutical and hydroponics.
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Source: AdvisorShares
US regulators issue stern warning on volatility ETPs
November 18, 2020--SEC's guidance follows sanction of five companies that have been ordered to repay $3m to investors
US regulators have issued a stern warning to broker dealers and financial advisers to stop selling "unsuitable" volatility-linked exchange traded products to retail investors.
The harshly worded statement has been released by a division of the Securities and Exchange Commission following Friday's announcement that five companies had been ordered to repay a combined total of more than $3m to retail investors harmed by the products.
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Source: FT.com
Michael Gayed Launches New Tactical Rotation ETF 'Worth Its Weight in Gold'
November 18, 2020--Michael A. Gayed, CFA, Portfolio Manager of Toroso Investments, is launching a new tactical Exchange-Traded Fund (ETF), the ATAC US Rotation ETF (ticker: RORO).
The ETF will track the ATAC Risk-On/Risk-Off Domestic Index (ticker: RORO.Index), designed to be a tactical US stock/Treasury rotation strategy based on the behavior of lumber relative to gold.
The ATAC US Rotation ETF (distributed by Foreside Fund Services, LLC) is designed to seek absolute returns across multiple market cycles. The Fund rotates offensively or defensively based on historically proven leading volatility indicators, with the goal of taking less risk at the right time.
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Source: Toroso Investments
Trillion-dollar club tightens grip on fund market during crisis
November 17, 2020--Market leaders such as BlackRock, Vanguard and State Street have gained control of 61% of the industry's assets.
Multi-trillion dollar managers including BlackRock, Vanguard, State Street and Fidelity tightened their stranglehold on the investment industry during the recent market correction, as jittery investors accelerated their migration towards large, low-cost fund groups.The concentration of assets in the hands of the largest investment managers, a trend that has been gathering pace since the 2008 financial crisis, spiked significantly in the first three months of the year, according to analysis from US-based research group Flowspring.
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Source: FT.com
Leatherback Asset Management Launches its First ETF
November 17, 2020--Actively managed Leatherback Long/Short Alternative Yield ETF (LBAY) is overseen by portfolio manager and founder Michael Winter, a 20-year veteran of hedge funds, mutual funds
Leatherback Asset Management, in partnership with Tidal ETF Services, is today launching its first Exchange-Traded Fund: the Leatherback Long/Short Alternative Yield ETF (LBAY).
LBAY is an actively managed alternative yield strategy that provides a cost-effective, liquid, and tax efficient means for investors to add a high-quality allocation with targeted monthly distributions to their respective portfolios.
Managed by Leatherback founder and 20-year veteran of the mutual fund and alternative asset management industry Michael Winter, LBAY holds long positions in equity securities and other publicly traded instruments that appear well-positioned to seek attractive yields to shareholders.
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Source: Leatherback Asset Management
Industrial production up 1.1% in October, but still lagging
November 17, 2020--U.S. industrial production rose 1.1% in October, recovering much of the spring decline caused by the virus pandemic.
It was a rebound after a downturn in September, but production still remains below pre-pandemic levels, the Federal Reserve reported Tuesday.
The rise was slightly better than the 1% analysts were expecting and combined with an upward revision in September's number, has to be seen as good news as coronavirus cases spike across the U.S. and states re-instate restrictions.
It's unclear what manufacturers will face in the coming months, but a sudden decline in demand, possibly combined with government-imposed restrictions on their operations due to the virus, could severely dampen industrial output.
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Source: apnews.com
Fed's Powell signals emergency credit programs should be extended
November 17, 2020--Federal Reserve Chair Jerome Powell said on Tuesday it was not time to shut down emergency programs aimed at battling the economic fallout from the coronavirus pandemic, with cases again surging and the economy left with "a long way to go" to recover.
"I don't think it is time yet, or very soon," to shutter the suite of credit programs set up by the Fed last spring with the authorization of the Treasury Department and funding from Congress, Powell said in the clearest indication yet he feels the programs are likely needed beyond Dec. 31, when many are due to expire.
Extending the programs would require Treasury's approval under the "lame-duck" Trump administration. Some Republicans in Congress have balked at keeping them open, particularly the program of lending for local governments.
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Source: reuters.com
