Bond ETFs are seeing major inflows as of late because they have liquidity advantages over their underlying bonds and they have tax benefits. However according to Todd Rosenbluth, research head at VettaFi, in a conversation with MarketWatch, Vanguards Total Bond Market ETF, BND, is standing out from the crowd. One of the main advantages that BND has is investors transitioning from mutual funds into ETFs. Additionally, investors are capitalizing on tax-loss harvesting in the bond market which has taken a hit in H1 2022, both of these have been wins for BND. Vanguard users can also easily transition from mutual funds to ETFs. Moreover, investors are looking for safer storage of money, and shorter-duration treasuries and bonds are a good place to do that.

Finsum: The liquidity mismatch in the bond market is a huge advantage for ETFs and investors should heavily consider this.

Policymakers have been begging for a break in Oil and gas prices and the last week finally started to see the turning point. While demand is beginning to soften, which no doubt will help loosen the tight oil market, a surge in Libyan crude output pushed futures lower. Adding to that are the overwhelming signs that oil prices will also fall if the global economy takes a step back. Markets are preparing for recessions in the U.S. and the Euro area. Central bankers across the globe are committed to subduing rampant inflation and as much as a 1% hike in the Federal Funds rate could happen at the next Fed meeting. A recession would significantly reduce U.S. oil demand.

Finsum: There is still plenty of pressure on Oil prices with the War on Ukraine continuing, and supply bottlenecks are still the driving force.

Twenty years ago, ETFs held a fraction of the assets they hold today, but the cost-efficient product wrapper would go on to disrupt the investment management industry and see trillions in assets under management. Is direct indexing the next major disruptor? According to management consulting firm Oliver Wyman, customized solutions are expected to grow to $1.5 trillion by 2025 from $350 billion in 2020. That represents a 329% increase. Since investors typically face specific risks that are unique to only them, the demand for customized investing solutions is expected to explode. Where ETFs were able to provide cost and tax benefits over mutual funds, direct indexing can go a step further by not only minimizing capital gains taxes but placing restrictions on holdings using criteria such as ESG. Previously, customization was limited to ultra-high net worth investors, but with companies such as Vanguard and Fidelity offering direct indexing solutions, more and more investors may opt for more customized solutions.

Finsum: With assets under management estimated to jump 329% by 2025, direct indexing is expected to become a major disruptor in the investment management industry.

Page 10 of 38

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…