Liquid Alternative investments have emerged over the past decade as one of the fastest-growing areas within asset management. As pensions, endowments, foundations and other institutional investors have long benefited from Alternative Investments within their portfolios, Liquid Alternatives enable investors to have access to alternative investment strategies in fund structures that provide daily liquidity, full transparency, low investment minimums and other key attributes for investors. DailyAlts is your source for the most up-to-the-minute news, commentary and analysis on the global market for Liquid Alternatives.
Unigestion, the Geneva-headquartered, independent, asset management company specializing in risk-managed equity portfolios and alternatives, has launched a global macro fund within its liquid alternatives cross-asset range.
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The Fed could take a leaf out of the Bank of Japan’s (BOJ) ETF playbook to address the current economic crisis created by the coronavirus pandemic. The Fed has already taken a never-before step by announcing it stood ready to buy bond ETFs. If its current fire-fighting moves come up short, it might even have to buy stock ETFs – something the BOJ is a past master at.
The coronavirus pandemic throws up ESG in a new light.
Far from spelling doom for ESG investing, the pandemic may have given it fresh, positive potential. An article by Marlene Satter in benefitsPRO outlines nine ways the pandemic could affect ESG, yet launch it as the new normal in investing. And ESG ETFs could benefit from a fresh tailwind.
ITB is the largest ETF in the home construction space. It provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. It currently has assets of $707.64 million and charges an expense ratio of 0.42%.
ITB may be ready to rebound, on account of both technical and fundamental factors.
Investors set up a record-breaking first quarter this year for inflows into U.S. money market funds. These funds gained from the massive risk-off sentiment that prevailed as investors realized the economic repercussions from the coronavirus. Investors dumped stocks and bonds and headed for the safety of money market funds.
Thursday, April 2, marks the beginning of a new era of active, non-transparent ETFs. In a brave step considering the current market conditions, American Century Investments will launch Thursday two new “active” ETFs. The American Century Focused Dynamic Growth ETF (FDG) and the American Century Focused Large Cap Value ETF (FLV) will list on CBOE Global Markets.
French asset manager Lyxor is the first ETF manager to launch a suite of ETFs that focus on the objectives of the European Union’s Climate Transition Benchmarks. These benchmarks target an immediate 30% reduction in carbon intensity and a 7% annual emission reduction trajectory.
It’s not at all unimaginable that the Fed could wade (further) into uncharted waters and mop up stocks. According to market experts, if the coronavirus leads to more panic and deterioration in the markets, the Fed will not hesitate to buy up stocks on a scale large enough to restore order. Given the present mood of the Fed, it may bring out the heavy artillery via purchases of stock ETFs.
Assets under actively managed ETFs constituted a minuscule percentage (< 3%) of total ETF assets ($4.4 trillion) as of end-2019. The most commonly attributed reason for this phenomenon is the fear that active managers face regarding their “secret sauce.” They are loath to make full daily disclosure of holdings as required by regulations for ETFs, as other fund managers and traders copy their strategies. However, a new breed of “non-transparent” ETFs that “mask” some or all of the fund’s portfolio, may soon become a reality.
These may be great for fund managers, but what about advisors and investors? Certainly, there is evidence of rising advisor interest in non-transparent ETFs.
HashCash Consultants are launching a new cryptocurrency, the Corona Fund Index Cryptocurrency (CFIX) in a drive to battle the COVID-19 pandemic crisis. The new crypto will launch on April 2 and trade on digital exchange PayBito, as well as other global exchanges. The CFIX crypto is backed by an inverse ETF tracking the S&P500.
Investors remain undeterred by the market turmoil and sustainability remains an investing priority. Accordingly, BlackRock has launched three ESG-screened, ultra short term ETFs in Europe. The ETFs are denominated in US dollars, euros, or pound sterling depending on the underlying investment-grade corporate bonds.
In a move aimed at ensuring liquidity in the bond market and related ETFs, for the first time, the U.S. Fed will purchase corporate bond ETFs. The Fed’s new facilities are the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issues, and the Secondary Market Corporate Credit Facility (SMCCF), to provide liquidity for outstanding corporate bonds.
There has been a sudden jump in the demand to borrow ETFs for purposes of shorting. Investors may be looking to short ETFs for various reasons, but one major factor is the sudden spike in the cost of options. Options are widely used for hedging strategies but have become expensive because of the intense, coronavirus induced volatility in the market in March. As a result, borrowing costs of ETFs have, on average, shot up 40% according to a report by data provider S3 Partners.
Financial markets faced a multitude of headwinds as never before.
ETFs, the innovative financial products that sprung from the calamitous financial crisis of 2008, have played a calming role in the recent market mayhem.
Investors have plowed in $3.2 trillion into hedge funds and $1 trillion into equity-linked structured products, investments that have limited downside protection, according to Bruce Bond, Co-Founder, and CEO, Innovator ETFs. (ETF Trends) Instead, they could consider an alternative investment strategy that could protect them from a loss shock up to a known buffer value on the one side, but also let them participate in the gains from a rally (up to a cap) on the other.
The Japanese central bank took a slew of monetary steps in response to the global coronavirus pandemic.
At an emergency meeting, Monday the Bank of Japan kept interest rates unchanged at a negative (-) 10 bps, but doubled its annual ETF buying plan to ¥12 trillion from ¥6 trillion. It also introduced a new lending program to smooth funding for firms.
Liquid Alternatives: Despite Meltdown, YTD Net Inflows to Global ETFs/ETPs Are Higher Than Last Year
Year to date net inflows into global ETFs/ETPs as at end February’20 are USD 98.68 billion, versus USD 61.57 billion as of end February’19.
ETFs and ETPs listed globally gathered US$31.52 billion in net inflows in February, according to ETFGI’s February 2020 Global ETFs and ETPs industry landscape insights report.
By every definition, the coronavirus pandemic is a ‘black swan’ event, one that is unpredictable or unforeseen but with extreme consequences.
The Amplify Black Swan Growth & Treasury Core ETF (NYSEARCA: SWAN) is designed for times like these. The coronavirus epidemic has sent global stock markets into a tailspin on fears of a massive recession.
One man’s meat is another man’s poison goes the saying. While oil-producing countries and US-listed oil companies have borne the brunt of the massive slide in crude oil prices recently, certain emerging market countries will, however, benefit.
The SEC’s proposed regulations have triggered widespread opposition, particularly those relating to leveraged (geared) ETFs.
The public has until March 24, 2020, to submit its comments on the proposals.
Qraft Technologies, a South Korean artificial intelligence firm, just launched its third ETF in the US. The Qraft AI Enhanced US High Dividend ETF (HDIV) targets high dividend US stocks selected through a proprietary AI system. Qraft Technologies has brought the ETF to market in collaboration with Exchange Traded Concepts, a white label ETF provider.
Call it the great bust of passive investing?
The IMF warned Wednesday that regulators and authorities need to start watching asset managers and ETFs over the threat that they could start liquidating assets. The IMF wrote this in a blog post on Wednesday.
Nationwide’s recently launched Nationwide Risk-Managed Income ETF (NYSEARCA: NUSI) helps investors find safe-haven fixed-income assets in the face of steadily declining Treasury yields. In the relentless rush to earn yield, investors may be turning to alternatives such as high dividend stocks, REITs, emerging market debt, high-yield bonds, preferred stock, and MLPs. However, investors may not be considering the attendant risks of such investments, according to Jonathan Molchan, Executive Director and Portfolio Manager, Harvest Volatility Management. He warns that these could come with risks attached such as interest rate, duration, inflation, commodity exposure, and leverage.
The coronavirus has hobbled travel, supply chains, and global economic growth forecasts. Crude oil will pay the price. Norway’s biggest independent energy consultancy Rystad Energy predicted on Thursday that The coronavirus outbreak will cut growth in global crude oil demand by more than half this year compared to earlier forecasts.