Displaying items by tag: rates

Morningstar recently announced that it has launched an Annuity Intelligence Center for advisors to compare and manage annuities for their clients. Sales of annuities have been booming due to higher interest rates and increased demand for retirement income. The Annuity Intelligence Center aims to simplify annuity sales and management for advisors by offering a comparison tool, educational material, and product accessibility. The platform is a partnership between Morningstar and Luma Financial Technologies, an Ohio-based fintech company with a platform for broker-dealer firms to buy and sell annuities, long-term investment options issued by insurance companies, and alternative investments. The Annuity Intelligence Center is designed for retail annuity sales and management but does not include in-plan annuities for workplace-sponsored plans. While retail annuity sales have been flourishing, in-plan annuity sales have been lagging. Jeff Schwantz, global head of channel partnerships at Morningstar, said the following in a press release, “Assets in annuities are climbing, and while these vehicles are growing in popularity, the annuity marketplace remains opaque, and advisers serving investors have difficulty evaluating their options.”

Finsum:Morningstar is looking to take advantage of a booming retail annuity market with the launch of a platform for advisors to compare and manage annuities for their clients.

The private REIT market was recently rocked by the decision of Blackstone and Starwood, which manage two of the nation's largest private REITs, to limit and prorate investors' repurchase requests because they exceeded redemption restrictions. Private REITs are real estate investment trusts that are exempt from SEC registration and whose shares do not trade on national stock exchanges. While the private REIT market flourished during the low interest-rate era between 2017 and 2021, the expectation that interest rates will continue to rise could make it difficult for these private funds to perform well in the future. That and a perceived gap between the performance of nontraded private REITs and public REITs led to a surge in investor redemptions for Blackstone and Starwood. Both firms are trying to shore up their funds’ liquidity through redemption restrictions. The Blackstone Real Estate Income Trust (BREIT), which has $125 billion in assets under management, announced the closing of redemptions for this quarter in a letter to shareholders last week. The announcement from the Starwood Real Estate Income Trust (SREIT), which is valued at about $14.6 billion, came more recently over the weekend. 

Finsum:Rising interest rates led to a surge in investor redemptions for private REITs, resulting in Blackstone and Starwood restricting redemptions this quarter.

Bond. James B….. Well, no, not exactly. However, for the first time in 10 years, investors are gaining value in bonds,  according to JPMorgan Chase & Co.’s Bob Michele, as quoted on Bloomberg, reported zacks.com. That’s unfolding in the light of higher interest rates making fixed income more of a financial boon.

“Every wealth-management platform in JPMorgan, every institutional client -- they’re coming to us, they’re putting money in bonds,” Michele told host David Westin. “Bonds are back.” iShares 1-3 Year Treasury Bond ETF (SHY Quick QuoteSHY – Free is off 5.2% this year while the S&P 500 has lost about 17.2%.

Someone say double duty? They address steepling interest rates as well as yielding healthy current income. In the midst of a tumultuous year, this ETF’s proven relatively resilient.

For those who feast on bonds, a handful of potentially winning ETF strategies are highlighted below:

• High-yield interest-hedged ETFs
• ProShares High Yield-Interest Rate Hedged ETF
• Convertible Bond ETFs
• First Trust SSI Strategic Convertible Securities ETF
• Senior Loan ETFs
• TIPS ETFs
• Floating Rate Bond ETFs
• Short-Term Cash-Like ETFs

Meantime, for the period concluding November 30, 2022, the distribution amounts per security (the "Distributions") for certain of its exchange traded funds, recently was announced by Horizons ETFs Management (Canada) Inc., according to finance.yahoo.com.

Last week, Federal Reserve Bank of Chicago President Charles Evans said that volatility in the markets can create additional restrictiveness in financial conditions. Last week, global markets saw increased volatility triggered by turbulence in the UK markets. Investors in the UK were spooked by the government’s program of unfunded tax cuts, which sent the pound tumbling and the cost of government debt spiking. In fact, volatility bets last week were at their highest levels since March 2020. Evans said that “The U.S. economy and inflation are going to be largely dictated by the stance of monetary policy and everything else that is going on supply shocks, the labor issues we're dealing with. It is a case that financial market volatility can add to additional financial restrictiveness. So, anything around the world in terms of policy or developments like Russia's invasion of Ukraine can add to additional restrictiveness." Still, he did not indicate that financial conditions would change the Fed’s current course.

Finsum: Chicago Fed President Charles Evans stated last week that market volatility can create additional restrictiveness in financial conditions, but gave no indication the Fed would change course.

Fixed income investors might feel lost in the current environment, but with yields starting to generate real income and prices ultra-low it might be the perfect buying opportunity. A new series of bond ETFs centered around treasuries was launched to capitalize on this unique time in the bond market. Slope Capital LLC and Genoa Asset Management LLC launched 10-year (UTEN.O), two-year (UTWO.O), and three-month (TBIL.O) dropped ETFs that will hold the most recent current Treasuries in the respective categories. Managers of the funds say this is well crafted precise tool for the fixed income investors that need a product like this. It gives new potential to bond investors in a precise way to tailor portfolios. There has been a flood into fixed income products as of late and funds are launching rapidly in response and will continue over the next half-decade.

Finsum: These tools can be utilized for investors wanting bond exposure, but not wanting to deal with the task of trading in the treasuries market and constantly updating