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Research Affiliates-Pundits Predicting Panic in Emerging Markets
June 28, 2018--Key Points
With EM stock prices plummeting and investors fleeing EM funds, the fear of emerging markets is palpable.
Our examination of three key metrics-external debt, foreign exchange reserves, and current account balance-shows, however, that EM countries have low risk of a broad funding crisis.
EM stocks are comparatively cheap when measured by CAPE, price-to-book ratio, price-to-sales ratio, market cap to GDP, and other metrics. Now, when fear reigns supreme, it’s time to buy, not sell.
Before its $50 billion bailout by the International Monetary Fund agreed to in June, Argentina had raised short-term rates to 40%! In May, Turkey raised rates by 300 basis points (bps) as the lira fell to fresh lows. At the same time, emerging markets (EM) stock prices have been plummeting. Since the peak on January 25, 2018, through June 15, 2018, EM stocks are down 11 percentage points and retail investors are fleeing EM funds. In May, net EM outflows totaled $12 billion.
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Source: Research Affiliates
CFTC.gov Commitments of Traders Reports Update
June 29, 2018--The current reports for the week of June 29, 2018 are now available.
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Source: CFTC.gov
iShares Debuts Robotics and AI ETF
June 28, 2018--BlackRock's iShares unit is top of the heap in the world of exchange-traded funds, yet the company finds itself playing catch-up of sorts in a category where other fund providers already have a big head start.
The iShares Robotics & Artificial Intelligence ETF (IRBO) that launched on Thursday from the world's largest ETF provider joins a passel of existing funds tapped into these two growing and dynamic 21st-century industries.
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Source: fa-mag.com
SEC Proposes New Approval Process for Certain Exchange-Traded Funds
June 28, 2018-The Securities and Exchange Commission today voted to propose a new rule and form amendments intended to modernize the regulatory framework for exchange-traded funds (ETFs), by establishing a clear and consistent framework for the vast majority of ETFs operating today.
ETFs that satisfy certain conditions would be able to operate within the scope of the Investment Company Act of 1940 and to come to market without applying for individual exemptive orders. The proposal would therefore facilitate greater competition and innovation in the ETF marketplace, leading to more choice for investors.
view the Exchange-Traded Funds Proposed
rule
Source: SEC.gov
OSC Study: Lack of understanding of cryptoassets puts Ontarians at risk
June 28, 2018--A new research study released today by the Ontario Securities Commission (OSC) found that many Ontarians lack understanding of cryptoassets, including those who currently own cryptoassets.
The study also revealed that an increasing number of Ontarians are being approached about participating in initial coin or token offerings, exposing them to potential risks given the lack of familiarity with these types of investments.
view the Taking Caution: Financial Consumers and the Cryptoasset Sector
Source: Ontario Securities Commission
SEC Approves Final and Proposed Rules in Latest Open Meeting
June 28, 2018--The Securities and Exchange Commission today voted on several final rules and rule proposals that together represent material progress toward many Commission priorities.
"Over the past year, I have been increasingly impressed by the breadth of expertise at the SEC, and the diversity of topics the Commission considered today is proof of that," said Chairman Clayton. "Commission staff is actively working on issues that touch all corners of our marketplace, including, importantly, our Main Street investors. I am pleased that we are making steady, thoughtful progress on many of the Commission initiatives detailed on our regulatory flexibility agenda. I cannot thank the staff enough for their dedication. Our capital markets are ever changing and the staff is committed to taking action to ensure that, as they have been for the past 80 years, they remain the best markets for investors, issuers, and our economy."
The Commission today approved:
1.Adoption of amendments to modernize the definition of "smaller reporting company," which was established in 2008. The full release on these amendments can be found here.
view the final rule
Source: SEC.gov
US advisers shy away from newfangled ETFs
June 28, 2018--Why some investment veterans still prefer to stick to no-frills vanilla products
As exchange traded funds grow in popularity, designers are devising new flavours of the investment vehicles in order to expand the marketplace.
However, rather than embracing these new offerings, the registered investment advisers (RIAs) that have been the most enthusiastic about ETFs are content to stick with the classic hits that attracted them to the products in the first place.
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Source: FT.com
SEC Proposes Making It Easier to Start Exchange-Traded Funds
June 28, 2018--Agency plan would make it easier to set up plain-vanilla ETFs
Proposal wouldn't cover more complex, leveraged products
The fast-growing $3.6 trillion U.S. market for exchange-traded funds is closer to getting a shot in the arm after Wall Street's main regulator advanced a proposal for streamlining its approval process for the products.
The Securities and Exchange Commission plan approved for public comment on Thursday would make it easier to bring new ETFs to market by laying out formal steps for setting up less-complicated funds.
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Source: Bloomberg
CBO-How Changes in Economic Conditions Might Affect the Federal Budget
June 28, 2018--CBO has developed "rules of thumb”"that show how changes in four key economic variables might affect revenues, outlays, and deficits. An interactive workbook allows users to see the budgetary effects of their own alternative scenarios.
One source of uncertainty in budget projections stems from the fact that the federal budget is highly sensitive to economic conditions, which are difficult to predict. If conditions differed from those in CBO's economic forecast, budgetary outcomes could diverge from those in the agency's baseline budget projections.
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Source: Congressional Budget Office (CBO)
SEC Officials Blast Leveraged ETFs, Other Funds Get Easier Path
June 28, 2018--Any rule on leveraged funds needs Chairman Clayton's support
Concern that investors don't know how 'dangerous' products are
Two top officials at the Securities and Exchange Commission are sounding the alarm over leveraged exchange-traded funds--even as the agency looks to streamline sales of simpler ETFs.
Robert Jackson Jr., who holds a Democratic seat on the SEC, criticized a failure to address these...
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Source: Bloomberg
