Tag Archives: marketsmuse

People Profiles, Tech Talk

Symphony Singing As Ex-Reuters CEO Joins Board in Battle v. Bloomberg

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MarketsMuse.com Tech Talk aka Fintech update profiles the latest from Symphony, the brokerdealer-backed financial communications program that is looking to make the Bloomberg terminals (or at least their most-used messaging application) mute. This David v. Goliath type battle pitting well-backed upstarts against the ubiquitous Bloomberg LP could become a trend among other aspiring fintech, trading system and specialty financial data providers when considering last week’s snafu that, for a few hours, rendered the Bloomberg LP terminal farm “tradus interruptus” across the globe (albeit, the fix was made prior to the opening bell of US markets.)

Tom Glocer
Tom Glocer

As spotted first by of all places, the NY Post, “Tom Glocer, former CEO of Thomson Reuters and a managing partner of Angelic Ventures, is joining Symphony’s board of directors, according to a person directly familiar with the company’s plans (according to the NY Post).”

Symphony, which received a $66 million investment last year from 15 financial companies has been seen as a viable alternative to the $24,000-a-year Bloomberg terminal.

The company’s backers include a who’s who of Wall Street financial companies: Bank of America Merrill Lynch, BNY Mellon, BlackRock, Citadel, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Jefferies, JPMorgan, Maverick, Morgan Stanley, Nomura and Wells Fargo.

Last fall, these companies contributed $66M to finance Symphony, and using that money, purchased Perzo, a company that was building a secure communications platform. After the purchase, they named Perzo founder David Gurle as Symphony CEO.

In addition to providing encrypted chat services, Symphony doesn’t store any communications as a third party, and allows a bank’s compliance officers to stop chats from leaving the company — an increasingly important factor for banks who are seeing chat records in court papers.

The addition of Glocer is only the latest of alum of the news and financial data company to join Symphony.

David Gurle, Symphony’s founder and CEO, was global head of collaborative services at Thomson Reuters, and worked on the company’s chat tool, according to the company’s Web site.

In addition to Gurle, there’s Eran Barak, Symphony’s global head of business operations, and Koray Oztekin and Ann Demirtjis, who do product management, according to the company’s Web site.
At least four other Symphony employees in business development have formerly worked at Thomson Reuters, according to LinkedIn.

Symphony is already in wide use at Goldman Sachs, which led the round of funding last year. The service is expected to be broadly rolled out to Wall Street by July.

Strike Price

AAPL in Advance of Earnings: A Truly Smart Options Strategy

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MarketsMuse.com Strike Price update takes a swipe at the plethora of sell-side analysts already dueling on air in advance of Apple Inc.’s April 27 quarterly earnings release (folks who will be proffering their respective EPS outlook post mortems and assortment of “consensus” talking points and take-aways after Tim Cook steps away from the conference call microphone). Instead, our MarketsMuse Option mart experts decided to share a uniquely thoughtful trade strategy for those fluent in options and agnostic as to the short-term stock price impact of mundane metrics that include a fresh look at Apple Watch orders and backlog of orders, or whether revenue reported conformed to the general consensus of Wall Street researchers.

The thoughtful idea is only for truly macro-friendly traders and professional investors, not for those who maintain “a longer-than-before-lunch-but before-the closing bell” approach to investment management. The AAPL  options idea in question (based on and intended to express a positive view on the company’s share price over medium-to-longer-term) is rare, as it is exclusively focused on a thesis that is driven by intellectual, macro-style rational reasoning, which requires one to embrace a disciplined approach to the overall investment process.

In the case of the noise already surrounding AAPL earnings, the idea is courtesy of widely-cited-by-mainstream media (and frequent MM contributor) Neil Azous, the principal of global macro think tank Rareview Macro and publisher of the investment newsletter Sight Beyond Sight. It starts with distilling the jibber jabber that is typical to CNBC guest bloviators and pontificaters and discounts the emotions of momentary price ticks  based on whether the Apple Watch will soon be followed by an Apple Car. Instead, the Alpha capture Apple of an idea is based on expert fundamental analysis, a global perspective that is very similar in style to the 2 prior Apple Inc-related ‘calls’ that Azous advanced in Feb and March of this year  (re: Apple Swiss Franc bond issuance and March (AAPL / GOOG options trade).

Without further ‘background’, the trade idea makes for great reading by option market intellects, especially when considering that the expert in question is considered to be a Hedge Fund Industry Rising Star (nominee for Institutional Investor’s 2015 award), via a $300mil model porfolio, he is outperforming the leading global macro strategy investing peers, and within the context of this post, an expert who is batting 1000% and is 2:2 (as in home runs) when it comes to taking a bite out of and best leveraging the action in Apple Inc.

The fresh-off-the-press (April 21) AAPL options-centric trade idea is easily-accessed via the archives section of the Rareview Macro website (subscription required, Free Trials are available to newbies). For Twitterites, Rareview Macro updates can be followed via @RareviewMacro.

ETF News

Largest US Health Insurer Creates Spark In Health Care ETFs

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MarketsMuse blog update profiles the largest US health insurer’s stellar first-quarter and the effects it has on the market with ETFs such as iShares U.S. Healthcare Providers ETF (NYSEARCA: IHF) receiving a huge boost from the insurer. This MarketsMuse update is courtesy of SeekingAlpha’s article from Zacks Funds, “Play UnitedHealth Q1 Strength With This Health Care ETF”  with excerpts from the article below. 

The largest U.S. health insurer UnitedHealth Group (NYSE:UNH) reported blockbuster first-quarter 2015 results. It topped our estimates on both the top and the bottom lines as well as raised its full-year outlook.

UnitedHealth Q1 Results in Focus

Earnings per share came in at $1.46, well above the Zacks Consensus Estimate of $1.33 and 32.7% better than the year-ago earnings. Revenues rose 13% year over year to $35.76 billion, edging past the Zacks Consensus Estimate of $34.73 billion. The robust performance was driven by rising enrollments and strength in the Optum Health Services business.

Market Impact

The market has welcomed UNH’s earnings beat and its strong outlook. Shares of UNH jumped as much as 4.3% following its earnings announcement on elevated volumes, making it the biggest percentage gainer on the Dow Jones Industrial Average Index for the day.

Since UnitedHealth is the first insurer to report earnings and a bellwether, the result has spread optimism across the broad health insurance sector with stocks of other players in the space in green at the close on the day. Some of these players include Aetna (NYSE:AET) – up 3.2%, Anthem (NYSE:ANTM) – up 2.4%, Cigna (NYSE:CI) – up 2% and Humana (NYSE:HUM) – up 0.5%.

Given UnitedHealth’s strength to lift the health insurer corner of the broad health care space and the solid run up in its share price, one ETF – iShares U.S. Healthcare Providers ETF (NYSEARCA:IHF) – could be worth a look for investors seeking to ride out the recent surge. It has the largest allocation to this big giant and looks to be in focus in the coming days with room for upside.

Bottom Line

UNH’s earnings beat sent the stock higher on the day, thus becoming the cornerstone for other stocks in the space. A merger and acquisition frenzy and encouraging industry trends bode well for the health insurer stocks and the related ETFs.

Other ETFs like Health Care Select Sector SPDR Fund (NYSEARCA:XLV),Vanguard Health Care ETF (NYSEARCA:VHT), iShares U.S. Healthcare ETF (NYSEARCA:IYH) and Fidelity MSCI Health Care Index ETF (NYSEARCA:FHLC) also have a decent exposure to UnitedHealth in the range of 3-4%. These funds also have the potential to move higher on UNH strength in the coming days but with less momentum.

To read the entire article on health care ETFs from SeekingAlpha, click here.

ETF News

China Stock Craze Will Go A Step Further With First Leveraged ETF

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In the past year alone, investors have invested more than $2 billion into ETFs that invest in China’s stocks. MarketsMuse update profiles the new ETF, The Direxion Daily CSI 300 China A Sharell 2X Shares (CHAU), this ETF is the first in China-focused ETF of its kind in the US. This MarketsMuse blog update is courtesy of Bloomberg Business’s Elena Popina and Boris Korby’s article “China Stock Frenzy Gets More Manic With First Leveraged ETF“, with an excerpt below. 

Want to double down on China’s world-beating stock rally? Now there’s an exchange-traded fund for that.

Direxion Investments is starting the first ETF that seeks to provide twice the daily return of mainland Chinese stocks using leverage, according to Andy O’Rourke, chief marketing officer for the New York-based fund provider.

The CSI 300 Index, which the ETF will track, has climbed to a seven-year high amid a frenzy of stock purchases by Chinese retail investors as the government eased monetary policy to counter a slowdown in the world’s second-largest economy. The ETF will be the first in the U.S. to use derivatives to amplify the return of mainland Chinese stocks, or so-called A shares, a market to which foreign investors until recently only had limited access.

“It was only a matter of time before a leveraged China A-share ETF came out trying to capitalize on the increased interest and flows into the area,” Eric Balchunas, a Bloomberg Intelligence analyst, wrote in an e-mail on Tuesday.

To continue reading about this new ETF for China’s stocks, click here.

Fixed Income, People Profiles

Which BrokerDealer Does Dare To Be Different re D&I: The CITI That Never Sleeps

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MarketsMuse is known for being both a curator of financial market news as well as a part-time pontificating platform, and yet our altruistic editorial team actually likes to lean towards and forward to our followers select stories that profile the truly compelling “social-sensitive” initiatives spearheaded by Wall Street banks.

While it may come as a surprise to the universe of cynics, ‘feel good’ stories-i.e. those in which Wall Streeters are actually doing things to add to society and not just their wallets, do take place every day. Sadly, those snapshots are typically under-noticed or not advanced by the traditional business media outlets, who typically reserve “Wall Street Doing Good and Giving Back”- type stories for Memorial Day and Veteran’s Day and limit those ‘profile pieces’ to a very short list of big-walleted sell-side advertisers.

(Shout out to anyone at CNBC who is reading this post, we hope you’re actually paying attention to this post!)..

Dean Chamberlain CEO, Mischler Financial
Dean Chamberlain CEO, Mischler Financial

Anyway, thanks entirely to the folks at Citigroup, along with minority-owned firms Mischler Financial Group and Williams Capital, Wall Street Leaders CAN and DO Dare to Be Different. This is best illustrated by Citi’s long-heralded, book-runner role for advancing Diversity & Inclusion initiatives aka “D&I” across Wall Street via alliances with aforementioned co-managers Mischler (the industry’s oldest firm owned and operated by Service-Disabled Veterans), Williams (the leading African-American owned BD) and corporate alliances with the likes of Toyota Motor Credit Corp., the combination of which helps promote the D&I message across the entirety of Main Street as well. Continue reading →

ETF News, Tech Talk

One New ETF Sets Itself Apart From The Rest

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MarketsMuse blog update profiles the new ETF, iShares Exponential Technologies ETF (XT), impress start. The ETF XT has collected over $600 million since its start in March of this year, this feat something only a few other new ETFs have been able to do. This MarketsMuse blog update is courtesy of Zacks Equity Research’s article, “Why Is This New ETF Growing So Fast?“, with an excerpt from below.  

The ETF industry has been growing by leaps and bounds since last year with issuers launching products with varied themes every now and then. While 2014 turned out a historic year for the ETF industry with assets hitting the $2 trillion (approximately) mark and over 180 ETFs being rolled out, 2015 took the story a step forward. A little over three months into the year, the industry has seen more than 65 launches with average market cap of the industry crossing $2.1 billion (read: 5 Very Successful ETF Launches of 2014). 

However, investors should note that all products do not witness an equal share of success. Some stand to gain massively and generate assets within a short span while some fail to secure investor interest and finally succumb to a shutdown. Let’s take a look at which new ETF, launched this year, emerged out as the best asset gather.

Inside iShares Exponential Technologies ETF (XT)

Investors might be surprised to know that this ETF has amassed over $600 million since its debut in March this year. It is a standard many ETFs fail to meet even after three years of launch. Apparently, the ETF saw this easy, or rather unimaginable success due to its unique investing objective.  

To continue reading about the success of the XT ETF, click here

Fixed Income, People Profiles, Tech Talk

Breaking News: Yet Another Corporate Bond Trading System: Bondcube

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Just when you thought the world of electronic bond trading had become saturated, MarketsMuse.com Fixed Income and Trading Tech departments continues coverage of the increasingly popular fixation on the part of entrepreneurs and technology firms, who have set up nearly two dozen new markets to trade corporate debt. In the rhetorical question posed by Bloomberg LP reporter John Detrixhe in his 15 April coverage of yet the latest entrant “BondCube”, the question is whether any of them will succeed.

In advance of the below extract from Bloomberg LP, MarketsMuse editors pose the following question: “Now that there are close on two dozen competing initiatives, which innovator from the world of FinTech will launch a platform that aggregates the APIs of the these disparate systems so as to provide a means by which bond traders can enter an order that will be seamlessly routed to the best destination for best execution? OK, So the likely answer is : Not until there are at least 4-5 systems that have demonstrated they have captured enough liquidity to make it worth the effort to build a fire hose for fixed income order routing. Here’s the extract from Bloomberg LP:

Paul Reynolds, CE0 Bondcube
Paul Reynolds, CE0 Bondcube

Bondcube, a London-based startup 30 percent owned by Deutsche Boerse AG, has gone live in the U.S. and Europe, according to a statement on Tuesday. The fixed-income market hosts securities denominated in 10 currencies, and averages about $300 million of orders a day.

“To simply start in this space as a new platform, never mind survive, you need a good idea, you need institutional financial support — in our case that is Deutsche Boerse,” said Paul Reynolds, Bondcube’s chief executive officer. “You need to be properly regulated. Unless you achieve those milestones, you’re not even going to start.” Continue reading →

ETF News

Oil ETF Investors Race For The Exits

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After pouring more than $6 billion into oil ETFs, investors are looking for a quick exit for two reasons: 1) the oil rebound might take much longer than originally expected and 2) the contango market is becoming an even bigger factor. This MarketsMuse blog update is courtesy of Reuters’ article “Look out OPEC! Oil ETF investors head for exit, risking new slump” with an excerpt below.

Oil investors who amassed a $6 billion long position in exchange traded funds, occupying as much as a third of the U.S. futures market, are now racing for the exit at a near record pace.

Outflows from four of the largest oil-specific exchange traded funds, including the largest U.S. Oil Fund (USO), reached $338 million in two weeks to April 8, according to data from ThomsonReuters Lipper. That is the first two-week outflow since September and the biggest since early 2014, marking a turnaround from heavy inflows in December and January on bets that oil prices would quickly rebound from six-year lows.

If the exodus gathers pace it could signal new pressure on crude oil prices that had begun to stabilize at around $50 a barrel this year following their 60 percent plunge, says John Kilduff, a partner at energy fund Again Capital LLC in New York.

Retail investors may have been “trying to bottom fish and got washed out with the recent new low,” he said.

To continue reading about the possibility of a new oil slump from Reuters, click here

ETF News

ETFs Are Having A Record Breaking Year, Near $3 Trillion Mark

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MarketsMuse blog update profiles the record breaking year ETFs have had. As investors become more comfortable with the idea of  using ETFs as an investment strategy, ETFs continue to become more and more popular. ETFs’ assets have grown at an exponential rate over last ten years. In fact, ten years ago ETF assets totaled $230 billion in the US and now we near the $3 trillion marker. This MarketsMuse update is courtesy of ETFTrends’ Tom Lydon’s article “ETF Industry Closing in on $3 Trillion” with an extract below. 

ETFTrends-logoExchange traded funds are becoming a household name as investors have been piling into the investment vehicle, expanding the global ETF market toward $3 trillion in assets.

After attracting an additional $36.1 billion, global ETFs saw $97.2 billion in inflows over the first quarter, or almost triple the total for the same quarter year-over-year. [ETFs Haul in $36.1 Billion in March]

As of the end of February, assets invested in exchange traded products, which include both ETFs and exchange traded notes, globally reached a new record high of $2.919 trillion.

“The global ETF/ETP industry had 5,632 ETFs/ETPs, with 10,902 listings, from 245 providers listed on 63 exchanges in 51 countries,” according to ETFGI’s Deborah Fuhr. “We expect the assets to break through the US$3 trillion milestone in the first half of 2015.”

To continue reading the article from ETFTrends, click here.

ETF News

ETF Providers Look To Level Playing Field

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MarketsMuse blog update profiles ETF providers pushing to level the playing field with their mutual fund competitors by pushing to gain more information on clients who invest in ETFs, just like mutual funds already do. A new initiative from the Canadian ETF Association is doing just that. An excerpt from The Globe and Mail’s article, “ETF providers want to know who’s buying” is below explaining more about the initiative.    

Exchange-traded fund providers say they’re at a disadvantage compared to their mutual fund competitors and are aiming to level the playing field with a new lobbying effort to obtain data on the financial advisers who sell ETFs.

The initiative, which is being spearheaded by the Canadian ETF Association (CETFA), will provide ETF companies with information on the financial advisers who are selling exchange-traded funds, and the breakdown on which funds they are selling to their clients. Mutual fund companies already receive such information.

If implemented, it could result in a surge of ETF sales within the Canadian marketplace.

The lack of adviser information has plagued the rapidly growing ETF industry, which competes in a market where investors are heavily invested in mutual funds. Canadians hold more than $1.22-trillion in mutual funds compared to $80-billion in ETFs, as of February, 2015.

Currently, ETF providers may receive a report from an individual investment firm that shows the total number of ETFs held by their clients. But the reports are not sent on a regular basis and do not include information on the individual financial advisers who purchase the funds on behalf of clients.

To read the rest of the article from the Globe and Mail, click here.

Tech Talk

Big Data and the New Twist In Algorithms: BrokerDealer Big Brother

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While the title could be “Big Data Bags BrokerDealers”, MarketsMuse.com Tech Talk update is courtesy of extract from the 07 April Bloomberg LP story by Hugh Son profiling the recent initiative by JPMorgan (and presumably their bulge bracket brethren, and likely, a select band of black box-centric buysiders from the Hedge Fund world) to keep closer tabs on their respective ‘human assets’ via stealth “algorithmic” software designed to predict what’s going on inside the heads of traders, sales folks and well, everyone else that logs into a device monitored by JP’s surveillance sleuths.

We preface Son’s story with “Unless you’ve been asleep at your trading screen for the past 10 years, you already know that Algorithms aka Algorithmic Trading aka HFT are all the rage and that “algo-based trading” accounts for approximately 70% of daily US equity market trading, as well as increasing percentages across fixed income, FX and currency markets. Simply put, Wall Street quants were arguably the first to turn “big data” into big bucks via algorithmic models, which are now ubiquitous across an assortment of industries that are relying evermore on digital data to drive decisions that are neuroscience-based. Well, Wall Street is once again ahead of the curve, as we’re now in the Big Brother phase of this algo evolution..

With this new chapter, its safe to presume that whatever you type into a keyboard is not only going to be stored by compliance wonks, its going to be analyzed by predictive Surveillance Dept. software to determine if you are prone to crashing planes into the side of mountain or likely to pose an assortment of other risks to the enterprise.

Here’s the opening extract of Son’s report:

Hugh Son, Bloomberg LP
Hugh Son, Bloomberg LP

Wall Street traders are already threatened by computers that can do their jobs faster and cheaper. Now the humans of finance have something else to worry about: Algorithms that make sure they behave.

JPMorgan Chase & Co., which has racked up more than $36 billion in legal bills since the financial crisis, is rolling out a program to identify rogue employees before they go astray, according to Sally Dewar, head of regulatory affairs for Europe, who’s overseeing the effort. Dozens of inputs, including whether workers skip compliance classes, violate personal trading rules or breach market-risk limits, will be fed into the software.

“It’s very difficult for a business head to take what could be hundreds of data points and start to draw any themes about a particular desk or trader,” Dewar, 46, said last month in an interview. “The idea is to refine those data points to help predict patterns of behavior.”

JPMorgan’s surveillance program, which is being tested in the trading business and will spread throughout the global investment-banking and asset-management divisions by 2016, offers a glimpse into Wall Street’s future. An industry reeling from billions of dollars in fines for the actions of employees who rigged markets, cheated clients and aided criminals is turning to technology to police itself better. Failure to do so will provide ammunition for those pushing to separate trading operations from retail banks. Continue reading →

ETF News

Coca Cola, Procter & Gamble, and Walmart ETF Is Promising

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MarketsMuse blog update profiles a safe ETF that thrives with the market during the good times and is safe during the bad times. The Consumer Staples Select Sector SPDR ETF (XLP), whose top three holdings are Procter and Gamble, Coca Cola, and Walmart, is the best ETF to invest in. This MarketsMuse blog update is courtesy of Investopedia with an excerpt below. 

If you’re looking for a safe investment that’s highly likely to appreciate during good times and capable of holding its own during the worst of times, then you have come to the right place. The Consumer Staples Select Sector SPDR ETF (XLP) is one of the most appealing exchange-traded funds (ETF) in the ETF universe for those who are looking for an investment opposed to a trade.

XLP Basics

IPO Date: Dec. 16, 1998 (Up 82.65% since IPO)

Total Assets: $8.10 billion (as of 4/2/15)

Yield: 2.33% (fairly generous)

Expense Ratio: 0.15% (well below average)

Annual Holdings Turnover: 3.94% (not too actively managed, demonstrates poise)

Purpose: Tracks the performance of the Consumer Staples Sector Index

Top 3 Holdings:

The Procter & Gamble Co. (PG): 12.39% of assets

The Coca-Cola Co. (KO): 8.93% of assets

WalMart Stores Inc. (WMT): 7.28% of assets

To read more about XLP from Investopedia, click here.

ETF News

Bitcoin ETFs: BIT Could Be “Balderdash” Says Sell-Side Seer

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MarketsMuse.com ETF snapshot takes another bite into the topic of Bitcoin, the dominant digital currency that continues to gain traction with leading brokerdealers and many, [but not all] from across the ETF universe, despite the currency’s 74 percent decline since November 2013. Below is excerpted from 07 April coverage courtesy of NewsMax.com

Big-time traders and investors are starting to participate in the bitcoin market, The Wall Street Journal reports. The list of participants includes Citadel Securities, KCG Holdings and Wedbush Securities. Citadel is a heavyweight investment firm led by Ken Griffin. KCG is the massive brokerage firm formed by the merger of Knight Capital and GETCO.

Citadel, KCG and Wedbush have offered bids to buy shares of the Bitcoin Investment Trust (BIT) since it was listed on the OTC Markets in March, The Journal reports. The BIT holds bitcoin in a trust in which accredited investors can then buy shares. Trading could begin as soon as this week.

KCG is “actively exploring various opportunities related to” bitcoin, its spokeswoman Sophie Sohn tells The Journal.

Some experts say use of the bitcoin by investors and traders will help to further legitimize the currency and increase its usage throughout the economy.

mf_monkeymathTo be sure, there is some skepticism about the BIT. The fund’s manager, Grayscale Investments, charges a 2 percent annual fee for administration and safekeeping, CNBC reports. That’s more than what most exchange-traded funds (ETFs) charge. One skeptical sell-sider has this to say about that..

“BIT investors may end up paying 5 percent more for shares of the fund than if they simply bought bitcoin on an exchange”, Eric Mustin, vice president of ETF Trading Solutions at WallachBeth Capital, tells the news service.

“People who read tabloids deserved to get lied to, and that’s how I feel about someone buying a bitcoin ETF,” he notes. “If you’re confident in this currency that you want to buy it, but you can’t take the 30 seconds to set up a wallet, which is incredibly easy, then you deserve to pay the 5 percent or whatever. I’m not cynical about bitcoin, but I just think it’s a goofy way to trade it.”

ETF News

ETF Investors Look For Success Outside The US

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MarketsMuse blog update is courtesy of CNBC’s Jeff Cox. As we have seen so far this year, ETFs have been becoming increasingly popular among all investors. MarketsMuse blog update profiles the biggest trends in ETF investing, including investing in international currencies. An excerpt from CNBC’s Jeff Cox’s article, “Hottest ETFs are currency hedges, non-US funds” is below. 

Exchange-traded funds have surged in popularity in 2015, but it’s not U.S. equities that are leading the charge.

Investors poured $97.2 billion into various ETFs and other similar products in the first quarter, marking the $2.9 trillion industry’s biggest start ever despite a wobbly U.S. stock market and a testy geopolitical climate, according to data from BlackRock, the world’s largest provider of such funds. (U.S.-based ETFs have about $2.1 trillion in assets.)

There essentially have been three major investment themes this year, and players in the exchange-traded market have made each work: A quest for investment themes outside the U.S.; the offshoot of that, which has seen domestic attention turn away from large caps and toward mid- and small-sized companies, and capitalizing on the big moves in currency markets, particularly an appreciation of the U.S. dollar and the decline of its global competitors. The greenback has gained 7 percent so far against a trade-weighted basket of other leading currencies.

Some $59 billion has found its way into products that focus on currency hedging, according to ETF.com, which said the group represented four or the top 10 funds for investor flows during the first three months of the year.

To read the rest of the article on ETF investment trends from CNBC, click here.

Tech Talk

Bitcoins Become Trading Firms’ Focus

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MarketsMuse blog update profiles how the increasing interest in bitcoins is leading some investors in opening bitcoin financial services firms. Many believe that this move can help reduce the volatility and increases favorability of bitcoins.  This update is courtesy of the Wall Street Journal’s article, “Big Investor Involvement Could Boost Bitcoin“, with an excerpt below.

Some of the U.S.’s biggest proprietary traders and investors are testing the waters for a bigger move into bitcoin, giving a potential boost to the fledgling virtual-currency industry.

While still cautious of becoming exposed to “cryptocurrencies,” some of the firms, which trade with their own money on the.ir own behalf, say they see potential for big profits in trading bitcoin as more investors enter the market and financial-services firms use the currency to streamline transactions.

Their involvement could help reduce volatility in the market for bitcoin, which has struggled to gain legitimacy in part because of concerns about wild swings in its price.

Among the companies at the forefront of this move is DRW Holdings LLC, a high-frequency trading firm in Chicago founded by former options-pit trader Donald Wilson in 1992. DRW is a founding investor in a new bitcoin financial-services firm called Digital Asset Holdings that launched last month. Cumberland Mining & Materials LLC, a DRW subsidiary, has “begun to experiment with cryptocurrency trading,” DRW said.

To continue reading the article on bitcoin firms from the Wall Street Journal, click here.

 

ETF News, Fixed Income

Bull Week For High Yield Bonds, Thanks To ETFs

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MarketMuse blog update profiles the positive market conditions bringing a good cash flow to high yield bonds, some say both are due to the ETF market. MarketMuse blog update is courtesy of Forbes’ article “High Yield Bond Funds See $315M Cash Inflow, Thanks To ETFs” with an excerpt below. 

Retail cash flows for U.S. high-yield funds were positive $315 million for the week ended April 1, down from positive $856 million last week, according to Lipper. Both were essentially all related to the exchange-traded-fund segment, with this week’s ETF inflow of $318 million dented by a small, $3 million outflow from mutual funds.

The two-week inflow total of approximately $1.2 billion follows two weeks of outflows totaling $3 billion in mid-March. Those were the first outflows after six weeks of heady inflows.

Even with the fresh inflow this week, the trailing-four-week average holds fairly steady, at negative $446 million per week, from negative $448 million per week last week, as an inflow five weeks ago was essentially the same as this week’s inflow. Recall that the trailing-four-week reading of positive $2.5 billion seven weeks ago was the largest in this measure on record.

To read the full article from Forbes, click here.

ETF News

How To Score In The 2nd Quarter: Which ETFs To Invest In

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With all of first quarter’s numbers in seeing the success of some ETFs, like the solar ETFs, where should you invest for the second quarter? MarketMuse blog update looks to panel of investment strategists with experience of managing billions of dollars for which ETFs to invest  in this quarter. MarketsMuse blog update is courtesy of Reuter’s Trang Ho and her article, “Q2 Investing Strategies: Top Five ETF Buys From Powerhouses With $1 Billion+ In Assets Under Management“, with an excerpt below.

If you were stranded on an island in the second quarter and could only take one exchange traded fund with you, what would it be? We asked a panel of investment strategists whose firms manage more than a billion in assets to share their best ETF investing idea for Q2.

1. Market Vectors Agribusiness ETF (MOO)

The Market Vectors Agribusiness ETF (MOO) should do well when we have a bad weather summer. The constituents of this ETF are lagging because grain prices have been so low. The May 2015 futures contract for corn is $3.92 a bushel. In 2012, a bushel was almost $8. The May 2015 contract for soybeans is $9.63 a bushel. In 2012, it was close to $18. So when will this change? When we have a summer that is way too dry or way too wet. Or, as with any commodity, the cure for low prices is low prices–farmers will stop planting grains if the prices are too low and supplies could fall, thus increasing prices. Seven billion people can’t be wrong. Those seven billion people need to be fed.

The fund only has a fee of 0.55%. Not bad. It is truly global with companies from Israel to Russia, denominated in every currency from the Norwegian kroner to the Russian ruble. You won’t find that type of diversity too often. The SEC dividend yield is 1.58%. Not horrible.

– Holmes Osborne, principal of Osborne Global Investments with $1.5 billion in assets under management in Santa Monica, Calif.

2. iShares Currency Hedged MSCI Germany ETF (HEWG)

The European Central Bank (ECB) has embarked on an ambitious quantitative easing program in the Eurozone, creating investment opportunities in European equities. We think European equities represent a good value relative to expensive US stocks, both from a price-to-earnings and price-to-book perspective.

Furthermore, Germany, the strongest economy in Europe, represents a potentially attractive way to access the driving forces behind Europe’s momentum higher-quality, cyclical tilt. First, there are few attractive opportunities for German investors outside of stocks as most German sovereign bonds currently offer negative real yield. Second, Germany, as the fifth largest exporter to the U.S., appears poised to capitalize on a strong dollar/weak euro and an improving American economy.

U.S. dollar-based investors can consider accessing the strong momentum and potential opportunities presented by Europe’s quantitative easing and seek to mitigate the risk of a depreciating euro through the iShares Currency Hedged MSCI Germany ETF (HEWG). HEWG invests in large- and mid-cap German equities and seeks to mitigate exposure to fluctuations in the value of the euro and the U.S. dollar. Investors should consider risks including a potential global economic slowdown, strengthening of the euro, and a rally in European bonds. We will also be watching the outcome of the ECB’s bond buying program, Greece’s economic situation and its impact on the eurozone, and European debt issues.

– Heidi Richardson, global investment strategist, BlackRock with $4.652 trillion AUM in New York City.

To see the complete list from Reuters, click here.

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MarketsMuse: This ETF Trading Expert Has This To Say About That…

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MarketsMuse.com ETF update is pleased to share an informative perspective about best practices and “best execution” that institutional investment managers, RIAs and others should consider when using ETFs, courtesy of insight from one of the more widely respected members of ETF “agency-only” execution space. Here’s the excerpt of the ETFdb.com interview:

etfdb logoAll walks have come to embrace the exchange-traded product structure as the preferred vehicle when it comes to building out low-cost, well diversified portfolios. Furthermore, active traders have also taken note of the inherent advantages associated with the ETF wrapper, embracing the product structure for its unparalleled ease-of-use and intraday liquidity.

ETFdb.com recently had the opportunity to talk with Mohit Bajaj, Director of ETF Trading Solutions at WallachBeth Capital, about his firm’s role in the industry as well as the evolution of ETF trading in recent years.

ETF Database (ETFdb): What’s your firm’s story? What role do you play in the ETF industry?

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