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JPMorgan Warns of Crowded Trades Amid Markets' 'Clear Consensus'
December 6, 2020-History shows consensus rarely plays out entirely: strategists
Crowded trades include short dollar, long copper, long Bitcoin
There's strong consensus in markets right now and investors need to position to hedge against crowded trades, according to JPMorgan Chase & Co.
The last time such a strong agreement on strategy existed was in late 2017 and early 2018, and that time period serves as a reminder that such a consensus view rarely plays out in its entirety, strategists led by Nikolaos Panigirtzoglou wrote in a note Friday. Global stocks reached records in January 2018 amid massive inflows, but extended positioning in risk assets became a concern and the next month the "Volmageddon" volatility spike crushed trades that many investors had viewed as a sure thing.
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Source: bloomberg.com
Citi Appointed by Dimensional Fund Advisors to Provide Securities Services for New Family of Active ETFs
December 4, 2020--Citi has been appointed by Dimensional Fund Advisors to provide securities services for its new family of actively managed, transparent exchange-traded funds (ETFs), the first two of which launched on November 18. As part of the mandate, Citi will provide fund administration, global custody, transfer agency, agency securities lending and ETF services.
Dimensional Fund Advisors is a global leader in systematic factor investing that has plans to grow its active, transparent ETF offering. Dimensional has successfully launched three core equity ETFs: Dimensional US Core Equity Market ETF (NYSE Arca: DFAU), Dimensional International Core Equity Market ETF (NYSE Arca: DFAI) and Dimensional Emerging Core Equity Market ETF (NYSE Arca: DFAE). In addition, the firm recently unveiled plans to convert six tax-managed mutual funds into new ETFs in 2021- one of the first to do so in the asset management industry.
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Source: marketwatch.com
Active fund investors earn higher returns for tolerating underperformance
December 4, 2020--Research suggests it pays to be patient as even the top active funds have long periods of undershooting the market
Investors looking to outperform the market by putting money into actively managed funds must tolerate longer periods of decline than most are prepared to weather in the hunt for return.
More than 80 per cent of outperforming active funds in the US spent at least one five-year period in the bottom 25 per cent of funds for performance, new research from Vanguard shows.
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Source: FT.com
FTSE Russell to drop eight Chinese companies after U.S. blacklisting
December 4, 2020--Index provider FTSE Russell said on Friday it will delete shares of Hikvision and seven other Chinese companies from certain products after a U.S. order restricting the purchase of shares in those firms.
In a statement sent by a spokesman for owner London Stock Exchange Group, FTSE Russell said it will remove shares in companies including Hangzhou Hikvision, China Railway Construction Corp, and China Spacesat.
FTSE Russell said it acted following feedback from index subscribers and other stakeholders, and that it was following its policy when sanctions are imposed that restrict investments.
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Source: reuters.com
Investors seek inflation protection as economic optimism rises
December 4, 2020--Tips funds have enjoyed inflows for nine consecutive weeks.
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Source: FT.com
Vanguard Announces Senior Leadership Changes
December 3, 2020--Vanguard today announced several senior leadership changes. Chris McIsaac, currently head of Vanguard's Planning and Development Division, has been named head of Vanguard's International business. After 33 years of dedicated service, Jim Norris, head of Vanguard's International business, will retire at the end of the year.
As part of this long-planned transition, Mr. McIsaac has partnered with Mr. Norris over the past year on the firm's international strategy, including sharpening the firm's focus on individual investors and the intermediaries who serve them, and developing Vanguard's global suite of mutual funds, ETFs, and advisory services. Mr. McIsaac will relocate to Vanguard's European headquarters in London during the month of December.
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Source: apnews.com
Flow Charts: Where the ETF Money Went in November 2020
December 3, 2020--November was a blockbuster month for money flooding into ETFs. Coinciding with the historic stock market rally, pro-cyclical plays were the biggest winners, with one notable exception: Emerging Market stocks.
Net ETF inflows totaled a record $83.6 billion in November, with the vast majority -$72.1 billion- coming from equity ETFs, and $12.3 billion from fixed income funds. (Commodity ETFs and other asset classes registered small outflows).
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Source: etfrc.com
S-Network MicroSectors Gold Miners Index to Provide Underlying Strategy for MicroSectors ETNs
December 3, 2020--S-Network, an Alerian company, is pleased to announce the launch of the S-Network MicroSectors Gold Miners Index (ticker: MINERS). The market cap-weighted index is designed to track the performance of the VanEck Vectors(R) Gold Miners ETF (GDX) and the VanEck Vectors(R) Junior Gold Miners ETF (GDXJ).
The index will function as the underlying strategy for leveraged and inverse leveraged exchange traded notes. These ETNs will be issued by the Bank of Montreal, trading under the symbols GDXU and GDXD.
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Source: Alerian
Ancestry bond deal sparks investor backlash over voting rights
December 3, 2020--Investors have warned that Private Equity-backed Ancestry.com's move to limit investors' voting rights in bond trading last week could erode the "cornerstone" of the corporate bond market.
The group has added a clause limiting investors' voting rights to 20% in a legal document supporting the $ 1.2 billion financing that is part of Blackston's acquisition of the group.
Ancestry's provisions have overturned a long-standing principle known as "one bond, one vote" that gives investors proportional voting rights.
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Source: californianewstimes.com
IMF Staff Country Report-Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil
December 2, 2020--Summary:
The COVID-19 pandemic has worsened Brazil's longstanding vulnerabilities of low potential growth, high income inequality, and weak fiscal position. While the authorities mounted a rapid and effective response to support the economy and protect the poor and vulnerable, the virus outbreak is yet to be brought under control.
Outlook and Risks.
Real GDP is projected to contract by 5.8 percent in 2020 followed by a partial recovery to 2.8 percent in 2021.
With weak domestic demand, inflation is likely to end 2020 substantially below target. Debt is projected to jump to 100 percent of GDP, due to a 10.6 percentage point deterioration in the primary deficit in 2020, and continue to rise over the next five years. The high level of debt exposes Brazil to confidence shocks. Securing congressional passage of structural reforms to raise potential growth remains challenging.
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Source: IMF
