(New York)

JP Morgan has plunged headlong into the ETF business since launching its first fund a few years ago. Now the asset manager has debuted a new broad equity tracker than undercuts the market on fees. JP Morgan’s new BetaBuilders US Equity ETF will track mid and large cap US stocks and will seek to track the results of the Morningstar US Target Market Exposure index. The fund costs just 0.02%, or $0.20 for every $1,000 invested per year, one basis point lower than its nearest competitor.

FINSUM: This is a good broad index tracker that costs next to nothing. We expect it will gobble up AUM nicely, but it remains to be seen how well its tracks the index versus competitors, as 1 bp is a tiny margin that could easily be eaten up by performance differences.

(New York)

In one of the most alarming bits of news we have seen about the economy is some time, new data out on the hiring market is showing a bleak trend. The US economy almost failed to produce any new jobs in February, with the total job creation figure at just 20,000. That is a major step down from the hundreds of thousands of new jobs investors had been used to seeing each month. The number is a meteoric fall from the 311,000 created in January, and way under the forecast of 180,000. Following the data, a senior member of the Fed reiterated that the central bank should take no actions on rates until at least the middle of the year.

FINSUM: This is very scary, but there is an important motto to remember here—one point does not a trend make.

(New York)

Where is the best place to find inexpensive income? That is a great question for any portfolio. With that in mind, here is a list of seven funds that can help investors get solid yields via inexpensive ETFs: iShares Core High Dividend ETF (HDV), SPDR Portfolio S&P 500 High Dividend ETF (SPYD), Invesco Dow Jones Industrial Average Dividend ETF (DJD), Vanguard High Dividend Yield ETF (VYM), JPMorgan U.S. Dividend ETF (JDIV), Xtrackers MSCI EAFE High Dividend Yield Equity ETF (HDEF). All the funds have expense ratios of between 0.07% and 0.20% and average yields ranging up to around 4%.

FINSUM: These are very core funds with good awareness, but always nice to have them all in one place. We particularly like the Xtrackers internationally-focused income fund because it can help get income from differing rate environments.

(New York)

There are a lot of worrying signs out there right now, but one thing that has bolstered optimism is the strength of the stock market in 2019. That said, there are signs appearing that underlying fundamentals are weakening. In particular, daily moves are shrinking, down from 0.9% in the 4 months leading to February, to just 0.4% in February. The slowdown in trading momentum is not only worrying in its own right, but also because the exact same trend appeared before the falls of February and December 2018.

FINSUM: Our counter argument is that average index moves were quite small through several solid years between 2014 and 2018, so it dos not necessarily indicate a problem.

(New York)

Wall street bulls are becoming an endangered species, or so says the Financial Times. In a worrying sign for stocks, investors are increasing their cash balances, a move that supports the flood of bearish outlooks out there right now. Most analysts have a fairly pessimistic view of the market, with many calling for a recession and market downturn by the end of 2020. Precious few have bullish views, leaving Krishna Memani, CIO of OppenheimerFunds, in a unique spot in that he thinks we are in the middle of a 20-year bull market.

FINSUM: Most everyone has gotten very bearish in their medium term outlooks. Counter indicator?

(Washington)

In what seemed an inevitable development, House Democrats are starting their push against the SEC’s Regulation Best Interest. The House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets will devote a hearing next Thursday to the SEC’s new rule proposal. The chairwoman of the committee is Maxine Waters, who was a champion of the defunct DOL Rule. Waters has commented on the SEC BI Rule that “When you have investment advisers who are not acting in [clients'] best interests but acting in their own best interests, it does not bode well for our senior investors in particular”.

FINSUM: We think the SEC BI Rule is a long way from ever getting enacted and will likely experience significant redrafting before implementation.

(Washington)

The whole market rally this year has pretty much been predicated on the Fed u-turning on rates. This makes sense, as it signaled that the Fed was not going to hike the economy into a recession. However, there are reasons to be nervous that the Fed may reverse course. One top economist thinks that the Fed may hike twice more this year as strong economic data will start to push Powell’s hand. US service industry data has been quite strong, and overall, “The fundamentals are not that bad. That could mean Powell has no choice but to hike.

FINSUM: We don’t necessarily agree with this view. While we are nervous about the Fed reversing course, we don’t think they will be under pressure to do so until inflation actually heats up.

(New York)

As our readers will know, we have been covering some of the best funds we met at February’s Inside ETFs conference. Today we want to profile a great service we found that we think would be useful to our readers. The service is a new ETF screener and research tool called ETF Action. The service was built by an experienced team from a major distributor and their experience shows in the design of the system. We were offered a free trial for their screener and found the user interface and functionality of the system very appealing. It was not only fast, but it was also useful to compare different funds side by side and search for new ones. For instance, we compared various dividends funds to help choose the best for our purposes, and the platform offered easy-to-access and multifaceted information for doing so. We preferred the system to the numerous other ETF screeners we have used. The company is building out the tool as a paid service and they have promotional pricing for advisors.

FINSUM: We really liked ETF Action and were impressed with the functionality. The management team clearly knows what they are doing and have in-depth industry experience, which is invaluable when it comes to thoughtfully building the system.

(New York)

“Cheap dividend” is a welcome phrase for many advisors. Income investments are precious, especially as clients age, but inexpensive and good-performing dividend funds are not quite as easy to find as one might expect. With that in mind, here are few names to consider: the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD), the Oppenheimer S&P Ultra Dividend Revenue ETF (RDIV), and the Wisdom Tree US Quality Dividend Growth ETF (DGRW). The first two average just under 4% yields and have fees well under 40 bp. The Wisdomtree fund seeks dividend growth names, has lower yields, and costs 28 bp.

FINSUM: We are fans of the high dividend and low volatility approach, so quite like the Invesco fund here. LeggMason also has another good option with that theme, LVHD.

(New York)

When and if the US-China trade deal finally happens, make sure to sell. At least that is what Bloomberg is arguing. In a classic case of buy the rumor, sell the news, Bloomberg thinks the completion of a deal should be a sell trigger. The trade situation itself is shaping up as a lose-lose for investors. Either it will be a symbolic-only deal that is short on details and does little to actually resolve tension, or Trump may walk away from the table with no deal (like with North Korea). In either situation, it is hard to see the market celebrating.

FINSUM: We tend to agree with this view. The way this is shaping up, it does not seem like there is going to be some grandiose trade accord that solves everyone’s issues.