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FINSUM

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Tuesday, 23 August 2022 02:17

BlackRock Furthers Fixed Income Innovation

BlackRock launched a new series of fixed-income ETFs which allow access to buy-write investments on bond securities. iShares 20+ Year Treasury Bond BuyWrite Strategy (TLTW), Shares High Yield Corporate Bond BuyWrite Strategy ETF (HYGW), and the iShares Investment Grade Corporate Bond BuyWrite Strategy ETF (Cboe: LQDW) are all different variations of the new options available to investors. BR says buy-write strategies have been available to equity ETFs for a long time, but have not infiltrated fixed income. These options will give more exposure to yield in what has been one of the most difficult times for fixed-income investment in decades. This just adds to BR’s legacy of innovation and creativity in bond market ETFs.


Finsum: This is an interesting idea, and maybe if inflation is cooling quicker than expected bonds are too cheap. 

 

Fixed Income ETF: Bonds, Total Market, ETF, Treasuries

Tuesday, 23 August 2022 02:16

Biden Busting PE like Teddy Roosevelt

The U.S. has an extended history of periods of financial regulation, specifically trust-busting. That period has been in hibernation though for the last 50 years, that is, until now. Many judges in the United States may be getting a slue of cases related to similar topics with mergers and competition as Private Equity has extended its ownership to unprecedented levels. There is more alignment than ever within the administration on the future of competition and private equity when it comes to policy. They are pursuing new readings and interpretations of longer-standing precedents that will be more stringent on PE. This new strain of regulation has long-standing Democratic Economists like Larry Summers voicing concern, calling the new policies ‘populist antitrust’.


Finsum: There have been a large number of papers on the effect of co-ownership and competition that private equity companies are imposing, and that could be reaching its peak.

Tuesday, 23 August 2022 02:14

Tech Stocks In Major Trouble

Sure tech investors have had their share of ups and downs, but they have been largely insulated from the market’s bigger losses but things could change. The underlying trends in the technology sector are looking as bad as they have in a long time. There is severe weakness in consumer-oriented hardware products. Moreover, as supply chains relax these prices could fall further. Additionally, sub-sectors such as enterprise tech spending are starting to deteriorate. The weakening demand is beginning to show at the company level as earnings season shows signs of weakness in technology. While there have been outliers such as Cisco, the market might not be ready for widespread tech deterioration.


Finsum: The other huge problem is rising interest rates and rampant inflation which lower the value of future earnings and make growth stocks less attractive.

Monday, 22 August 2022 12:47

Volatility’s in the wind

Volatility can be a maddening beast. Sure, you can hope all well be relatively calm on the western front this month, and The Federal Reserve, the European Central Bank and the Bank of Japan won’t break bread until next month, pointed out marctomarket.com.

Meantime, the volatility of the S&P, the VIX, hovers at three month lows while the equivalent in the Treasury market’s off drastically from an early July peak.

A cocktail of burgeoning prices and moderating economies are giving investors a run for their money, the site continued.

Some economists insist the U.S. is sitting in a recession, hearty U.S. growth in jobs and with an unemployment rate at 3.6%, cyclical lows, aside. The market, in all its adamance, figures that prior to year’s end, the target of the Fed funds – currently 2.50% -- will bounce an additional 100 bp.


Inflation and the Fed’s policy are hanging is as some of the primary drivers of market and investor sentiment Advisors and investors upon which should train their focus in the year’s second half, Wisdom Tree believes, according to finance.yahoo.com, in an article was published originally on ETFTrends.com.

While model portfolios, of course, help pare down some of the labor inherent to the analysis of all investment positions, some advisors, nevertheless, outsource some – or all – of the investment management responsibilities by tapping third part model portfolios, according to flexshares.com.

Unlike funds, among other traditional investment vehicles, external solutions like third party portfolios provide financial advisors leeway over a gambit of aspects of managing a portfolio. They include  underlying holdings, asset allocation, rebalancing frequency, and trading.

“Advisors are typically seeking a holistic, cost-efficient, outcome-oriented solution from a trusted brand. Our models seek to provide a robust framework to navigate global markets and offer a straightforward means to help advisors build scale, enhance client service and satisfy regulatory expectations,” according to Melinda Mecca, director of Investment Solutions, Northern Trust Asset Management.

Also referred to by some RIA in the industry as the separately managed account, they’re used by investment advisors for accounts with higher AUM or asset under management, according to  synertree.io.

Now, trade and asset allocation decisions are beyond the wheelhouse of an RIA, but should have the chops to know the product without in extensive insight into each security within the model portfolio, the site continued.

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