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BlueStar Israel Equity Review & Outlook-Israeli Stocks Continue Gaining on Global Equity Peers
March 9, 2018--A late-January correction in global equities set February off to a volatile start which continued into the first week of March. Despite the backdrop of higher volatility, the BlueStar Israel Global Index is outpacing the MSCI EAFE index by roughly 1.5% in 2018 year-to-date, and 5% since BIGI's November 2017 low;
The Bank of Israel left its policy rate at 0.10% but expects to begin tightening its monetary policy sometime in Q4 2018 as inflation begins to move toward its target zone of 1%-3%; Inflation is expected to return to Israel as a result of its strong growth, a tight labor market and a reinflationary environment in Israel's largest import markets;
Israeli exporters, which comprise roughly 70% of the BlueStar Israel Global Index(R), outpaced domestically-oriented stocks in February as Israeli exports continue to grow, while domestically-oriented stocks sold off more sharply despite a strong earnings season for Israel's leading banks.
Source: Blue Star Indexes
IMF Working Papers-Canada's Carbon Price Floor
March 8, 2018--Summary
The pan-Canadian approach to carbon pricing, announced in October 2016, ensures that carbon pricing applies throughout Canada in 2018, with increasing stringency over time to reduce emissions. Canadian provinces and territories have the flexibility to either implement an explicit price-based system—with a minimum price of CAN $10 per tonne of carbon dioxide equivalent in 2018, increasing to CAN $50 per tonne by 2022—or an equivalently scaled emissions trading system.
This paper discusses the rationale for, and design of, the price floor requirement; its (provincial-level) environmental, fiscal, and economic welfare impacts; monitoring issues; and (national-level) incidence. The general conclusion is that the welfare costs and implementation issues are manageable, and pricing provides significant new revenues. A challenge is that the floor price by itself appears well short of what will be needed by 2030 for Canada's Paris Agreement pledge.
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Source: IMF
U.S. fund manager Breakwave to launch first ETF for shipping futures
February 8, 2018--U.S-based fund manager Breakwave Advisors is launching the first exchange-traded fund (ETF) focusing on freight futures, reflecting growing investor interest in shipping as it emerges from a near-decade long crisis, a regulatory filing showed.
Around 90 percent of traded goods by volume are transported by sea and global shipping sectors-such as dry bulk-are on course for a recovery this year, according to investors and analysts, prompting speculators to look for ways to trade.
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Source: Reuters
BMO Asset Management Inc. Launches Five New ETFs, Including Fixed Income Solutions
March 7, 2018--BMO Asset Management Inc. (BMO AM) today launched five new Exchange Traded Funds (ETFs)*. Among the new funds are three Canadian fixed income ETFs-including short-term bonds, corporate bonds, and government bonds- helping investors build and adjust portfolios with efficient, low cost ETFs.
"As one of the top 10 fixed income ETF providers globally**, we're excited to build on our successful and comprehensive suite," said Kevin Gopaul, Head of BMO Global Asset Management Canada. "We recognize that investors are searching for solutions in a rapidly changing fixed income market. We deliver tailored ETFs that are as wide or as precise as investors' needs to build the best possible portfolios."
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Source: BMO Financial Group
State Street Embraces New Investment Paradigm, Launches Investable Indices
March 7, 2018--Rules-Based Indices Package Dynamic Investment Strategies in an Index Wrapper
State Street Corporation (NYSE: STT) today announced it has developed and begun licensing a suite of rules-based investment strategies, or investable indices, for institutional investors.
"This is not smart beta or thematic investing," said Will Kinlaw, head of research and advisory for State Street Global ExchangeSM. "These investable indices represent a new phase of dynamic investing. We're packaging an active strategy in rules-driven index, where security weights can change dynamically as relevant factors and big data indicators evolve."
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Source: State Street Corporation
U.S. regulator urges registration of cryptocurrency exchanges
March 7, 2018--The U.S. Securities and Exchange Commission said on Wednesday that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules.
In a statement, the SEC said these "potentially unlawful" platforms may be giving investors an unearned sense of safety. And it said many of these platforms likely need to register with the SEC as a national securities exchange or an alternate trading system.
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Source: Reuters
CFTC.gov Swaps Report Update
March 7, 2018--CFTC's Weekly Swaps Report has been updated, and is now available.
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Source: CFTC.gov
CBO-Monthly Budget Review for February 2018
March 7, 2018--Total Receipts: Up by 2 Percent in the First Five Months of Fiscal Year 2018
Total Outlays: Up by 4 Percent in the First Five Months of Fiscal Year 2018
Estimated Deficit in February 2018: $216 Billion
Actual Surplus in January 2018: $49 Billion
The federal budget deficit was $392 billion for the first five months of fiscal year 2018, CBO estimates, $42 billion more than the shortfall recorded during the same period last year. Revenues and outlays were higher, by 2 percent and 4 percent, respectively, than during the first five months of fiscal year 2017.
As was the case last year, this year's outlays were affected by shifts in the timing of certain payments that otherwise would have been due on a weekend. If not for those shifts, outlays and the deficit through February would have been larger by more than $40 billion, both this year and last year-but the year-to-year changes would not have been very different.
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Source: Congressional Budget Office (CBO)
Research Affiliates-When Value Goes Global
March 7, 2018--Key Points
The value premium is traditionally associated with stock selection and market timing, however, value investing works just as well when applied globally across major asset classes.
The alternative value portfolios we study are typically uncorrelated with their underlying asset classes, traditional value approaches, and each other, thereby offering meaningful diversification benefits alongside attractive excess return potential.
The success of value portfolios hinges on their design, which allows investors to gain better exposure to desired risk premia not easily available when investing in a single market.
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“Buy cheap and sell dear.”- Benjamin Graham, The Intelligent Investor
Value investing, a well-known and popular strategy, enjoys broad adoption in the investment community and is supported by a wide array of academic articles. Investors likely associate the word “value” with terms such as book-to-market ratio, price-to-earnings ratio, and bond yield, which are traditionally used for selecting investments in individual stocks, an entire equity market, or local government bonds. A robust body of literature, however, indicates that value strategies work just as well when investing globally across international equity indices, foreign government bonds, currencies, and commodities.1
Source: Research Affiliates
Janus Henderson Group Announces Change to ETF Line-Up
March 6, 2018--Tail Risk Hedged Large Cap (TRSK) and Volatility Hedged Large Cap (SPXH) Exchange Traded Funds to Close
Janus Henderson Group plc (NYSE: JHG) today announced the Janus Detroit Street Trust Board of Trustee's approval for plans to close and liquidate Janus Velocity Tail Risk Hedged Large Cap ETF (NYSE: TRSK) and Janus Velocity Volatility Hedged Large Cap ETF (NYSE: SPXH). The decision to close the funds is based on a combination of unanticipated changes to underlying components of the funds' underlying indexes as further detailed in the prospectus supplement filed today, March 6, 2018, and a standard review of the firm's exchange-traded product line-up.
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Source: Janus Henderson Group plc
