How much do you enjoy that no-foam-extra-hot-double-shot latte made exactly your way at Starbucks? It seems as if business is all about individual preference these days. So why not do the same thing in the investment space?
According to this article in the Financial Times, exchange-traded funds (ETFs) are to blame. They’ve ushered in a huge flows of fickle money -- and as ETF investors pull their cash, the developing world is falling victim to short-term thinking and speculation.
Buoyed by better funded status, there will be no great rotation for plan sponsors. Instead, many are shifting into reverse and heading for the exits when it comes to stocks and running toward bonds that better match their liabilities.
Exchange-traded funds (ETFs) will be on the menu for more insurance companies next year, including term-maturity ETFs—an ETF based on a portfolio of bonds that mature within a specific year. With rising rates on the horizon, it's all about timing.
Remember when everyone thought investors would ditch bonds for stocks in 2013? According to BlackRock’s ETP report, investors pulled their money from long-duration bond funds -- but they put it right back into fixed income in the form of shorter maturity products. So while fixed income ETF flows were down last year, short maturity products gathered considerable steam to the tune of $34.7 billion. Maybe we should call it the great duration rotation instead.
When it comes to global investing, plan sponsors want to focus on the winners and forget the losers. That's why they're asking questions about country-based exchange-traded funds.
Exchange-traded funds are now poised to overtake hedge funds on the investment front. And that raises questions about the future of alpha.
Institutional use of exchange-traded funds (ETFs) is rising exponentially, according to numerous experts and surveys. And yet plan sponsors in Canada at least have expressed the challenges they face when it comes to using them. Moreover, exactly how they are using ETFs isn’t 100% clear, unless, of course, you have access to anecdotal information. The $64,000 question: Are plan sponsors ready for longer-term strategic use?
I really hate end-of-year lists. So why am I subjecting you to this post? Because so much has happened in the exchange-traded fund space in 2013 that could fundamentally change the game for the industry in 2014 and beyond. I wrote about a lot of these developments on the site in 2013, but there are five that I think will gain traction in the coming months and years.
Some of the biggest asset managers in the U.S. are looking to make exchange-traded funds (ETFs) a little less transparent by asking the U.S. Securities and Exchange Commission to relax the disclosure requirements for actively managed ETFs. And while any push to reduce transparency should probably be looked at with a good deal of suspicion, this one actually makes a lot of sense.