How Advisors are Using Defined-Outcome ETFs
The relatively new category of buffered or “defined-outcome” ETFs has grown to $30 billion in assets, with more than $10 billion in inflows in 2023 alone. Amid significant uncertainty surrounding the Fed's trajectory for rate cuts, geopolitical tensions, and a presidential election year, investors are seeking new ways to mitigate risk in their portfolio while still participating in the returns of the equity market. AllianzIM entered the ETF market in 2020 to address this need with a growing suite of buffered ETFs. Buffered ETFs are a powerful tool for advisors and their clients to reduce volatility and diversify a traditional allocation.
Existing Home Sales Reach Five-Month High
Existing home sales jumped to a five-month high in January. According to the data from the National Association of Realtors (NAR), existing home sales rose 3.1% from December to reach a seasonally adjusted annual rate of 4.00 million units. This figure came in higher than the expected 3.96 million. Existing home sales are down 1.7% compared to one year ago.
Seven (More) Samurai to Take On the Magnificent Seven
They call them the Seven Samurai. Analysts from Goldman Sachs Group Inc. caused a stir in Tokyo this week with a well-timed report highlighting a group of stocks that could serve as Japan’s equivalent of the Magnificent Seven that have come to dominate US equities.
Chicago Fed: Economic Growth Decreased in January
The Chicago Fed National Activity Index (CFNAI) dropped to -0.30 in January from +0.02 in December. Three of the four broad categories of indicators used to construct the index decreased from December and three categories made negative contributions in January. The index's three-month moving average, CFNAI-MA3, rose to -0.02 in January from -0.14 in December.
‘Thousands’ of New ETFs Seen in $8 Trillion Market’s Next Leap
Outside the Fontainebleau Hotel in Miami, Florida last week, dozens of drones moved slowly through the night sky, projecting the Bitcoin symbol far and wide above one of the largest ETF gatherings of the year.
How to Avoid Another Lost Decade in Equities
The current speculative environment seems to increasingly resemble the Technology Bubble of 1999/2000. All bubbles eventually burst and the burst of the Tech Bubble led to the so-called lost decade in equities.
Fed Minutes Show Most Officials Flagged Risks of Cutting Rates Too Quickly
Minutes from the Federal Reserve’s latest gathering show most officials remained more worried about the risk of cutting interest rates too soon than keeping them high for too long and damaging the economy.
Gasoline Prices Rise for 4th Straight Week
Gas prices are up for a fourth straight week for the first time since August. As of February 21st, the prices of regular and premium gas increased 8 cents and 7 cents from the previous week, respectively. The WTIC end-of-day spot price for crude oil closed at $77.04, up 0.2% from last week.
A Tale of Two Metals Will Determine the Future of Energy
The world’s biggest miner BHP Group Ltd. grew powerful by building dominant positions in producing the minerals of the future. That makes the challenges it’s facing with two key clean-tech ingredients a sobering lesson for the energy transition.
Capital One's Deal for Discover Could Help Spark an M&A Rush
Capital One Financial Corp.’s $35 billion deal for rival credit card provider Discover Financial Services is more than an opportunistic move on a rival that had a lamentable 2023. The takeover reinforces the impression that corporate leaders are willing to take risks on big M&A again.
Junk-Bond Market Gets Riskier With Erosion in Credit Quality
The $1.4 trillion US junk-bond market is getting junkier, as more debt gets either downgraded or elevated out of the high-yield universe altogether, leaving greater potential risks for investors.
Cryptocurrencies: Bitcoin Breaks $52K for First Time Since December 2021
Bitcoin's price broke past $52,000 this past week for the first time since December 2021. BTC is currently up ~18% year to date. Here's the latest charts on three of the largest cryptocurrencies by market share through 2/20/24.
A key economic mistake people make is thinking growth leads inflation. One reason they do that is because inflation is a monetary phenomenon. When money is too easy, first growth rises, and then inflation rises with a longer lag due to excess dollars in the system.
Staying Ahead of the Game With Direct Indexing in Financial Advisory
Looking back, I believe the financial advisors who were most willing to adapt to changing times were generally more able to set themselves apart from the crowd and experienced a higher rate of success.
Popularity of REITs Could Be Positive for This ETF
The real estate sector represents a mere 2.31% of the S&P 500. Just two sectors – materials and utilities – command smaller allocations in the benchmark domestic equity gauge. That low weight garnered by real estate stocks and REITs belies the popularity of those assets among investors.
3 Portfolio Allocations Where Active Investing Helps
With one month in the books for 2024, and markets still waiting for a sign from the Fed, many investors may be looking to shake up their portfolios. What worked in 2023, after all, may not necessarily work in 2024.
Why Managed Futures Are Well Positioned in 2024
This year continues to follow in the footsteps of 2023, marked by increased investor optimism but ongoing uncertainty. For now, much remains unknown, and a higher January inflation print only proves the challenges that still lie ahead.
This Long Duration Treasury ETF Could Reward Patient Investors
Patience is required when embracing long-dated bonds and corresponding exchange traded funds. In standard market environments, intraday price action for long duration Treasurys usually isn’t breathtaking. Nor are investors expecting it to be.
World Markets Watchlist: February 20, 2024
Five of the eight indexes on our world watch list have posted gains through February 20, 2024. Tokyo's Nikkei 225 finished in the top spot with a YTD gain of 14.64%. The U.S.'s S&P 500 finished in second with a YTD gain of 4.91% while France's CAC 40 finished in third with a YTD gain of 3.51%.
Margin Debt Up 0.2% in January
FINRA has released new data for margin debt, now available through January. The latest debt level rose for a third straight month to $701.98 billion. Margin debt is up 0.2% month-over-month (MoM) and up 9.5% year-over-year (YoY). However, after adjusting for inflation, debt level is down 0.4% MoM and up 6.2% YoY.
The Future of AI in the Advisory Profession
The biggest trend in the advisory profession over the last year was the integration of AI into practices. Using generative AI for finance allows advisors to enhance their efficiency across multiple areas of their business, letting them do more with less. Increasing their productivity in investment management allows them to spend more time with their clients, and AI – which can reveal relevant news items for advisors – gives them natural touch points to reach out to their clients more often.
Tail Risk ETFs, Active Fixed Income, & PIMCO’s ETF Lineup
VettaFi’s Lara Crigger goes in-depth on the Simplify Tail Risk Strategy ETF (CYA), which is down nearly 100%. PIMCO’s Greg Hall discusses the potential benefits of active management in fixed income and highlights the firm’s expanding ETF lineup.
Active ETFs Gaining Popularity vs. Mutual Funds
Investors are turning toward active ETFs and away from mutual funds thanks to the ETF wrapper, per data from Trackinsight’s Global ETF Survey. The survey, which came out this week, showed growing investor favor toward active strategies.
Winning Financial Strategy Combines Strong Offense and Defense
Millions of people in the U.S. have a great offense when it comes to earning money that could provide them financial security. Yet it does not, because their defense in protecting and creating that security is gravely underperforming.