Global ETFs drew in US$20.8 billion with no thanks to bonds. In all, outflows from bond ETFs hit a nine-month low at US$2.9 billion, as investors fled from investment grade corporate and high yield bonds.
When it comes to pension plans and hedge funds, size matters. That message came across loud and clear last fall when the US$298-billion California Public Employees’ Retirement System (CalPERS) eliminated its $4-billion hedge fund program.
Heading into Canada Day, it doesn’t exactly look like it’s going to be a relaxing summer. For one thing, it’s turned cold and rainy here in Toronto which is a major bummer for local kids (including mine) as they try enjoy the first summer weekend. But it’s not the weather I’m worried about - it’s all the volatility cropping up in the markets. Greece aside, the big story last week came out of China, where investors are experiencing a major market slide.
Over half of managers are not confident their performance numbers are accurate.
The active versus passive debate is pretty black and white -- but as investors have discovered, there’s a whole lot of grey area in between. Cue the development of products like smart beta that aim to address the gap. Although popular, new research shows smart beta ETFs might not be delivering on their promise.
Investors are pulling out of exchange-traded funds (ETFs) tracking U.S. corporate bonds - who are they and what does it mean for the fixed income space?
Not the most surprising development in the exchange-traded fund (ETF) world, but notable all the same: ETF assets globally finally topped US$3 trillion at the end of May according to London-based research firm, ETFGI. But as ETFs reach a new milestone, a couple of other ETF stories last week showed a couple of shifts in the space - gold and smart beta.
And while global ETF assets are edging closer to US$3 trillion in asset under management, the industry has reached another milestone - 500 ETFs have closed or delisted. That’s a 22.7% mortality rate given the 2,207 that have been listed on U.S. exchanges. Of the 1,712 products currently listed and traded today, the loss of a further 315 from the deathlist could significantly boost that percentage. But this could be a good thing.
In some circles it’s called a “liquidity sleeve” - that sliver of exchange-traded fund (ETF) exposure that can keep at least a portion of your exposure liquid in case you need to liquidate in a hurry. For active managers, however, ETFs have another use: as a tool to avoid the dreaded “cash drag” -- that 3 to 5 percent hit on performance that comes from holding the necessary cash to manage investor redemptions. But does it always work?
A new study by Greenwich Associates finds that large institutional investors are turning to bond ETFs in greater numbers as they struggle to find products in a highly challenging fixed income space. What happens when they decide to cash in?