News Mentions & Press Releases
Actively managed ETFs grew faster than the overall industry in April. Assets in active exchange traded funds rose by $550 million, or 2.8%, to $20.07 billion. That’s 28% growth in the past 12 months, or $4.44 billion, according to a new study by AdvisorShares.
Of 125 actively managed ETFs in total, two launched in April.
Total ETF industry assets grew 1.8% last month to $2.135 trillion, ETF.com recently reported…
With nearly 10,000 baby boomers retiring every day, it is no surprise that income has become a quest for advisers and their clients. The demand isn’t going away anytime soon, a realization that many exchange-traded-fund providers have embraced. In fact, of the top 15 ETF providers in the U.S., every single one offers at least one product that is focused on providing current income.
There are over 500 ETFs that yield better than the 10-year U.S. Treasury.
Given the large universe of income-focused ETFs, there are many factors to consider when analyzing the choices. For instance, there are various categories of income, each with different returns, risks, and taxation. Here is a look at three groups: equity income, fixed income and alternatives……
Greece continues to live on the brink. The troubled euro zone economy has just used an emergency reserve account to make a 750 million euro payment, and is seen as close to running out of cash and potentially defaulting on its commitments. But unlike the summer of 2011, when Greek worries unsettled U.S. stocks, many investors say Greece is simply not a big concern this time around.
“If you’re a money manager, and you don’t know that Greece could go bankrupt, then you deserve to go bankrupt,” quipped Nicholas Colas, chief market strategist at ConvergEx.
The bond market may be seeing the death knell of a popular bet that inflation will stay low.
The 30-year Treasury bond’s yield rose above a key level that this week, breaking out of what’s know as its 200-day moving average. That may signal traders are done betting the collapse of oil prices will lead to deflation after pushing the longest-maturity debt to record lows in January.
“People aren’t concerned about deflation anymore,” said Justin Lederer, interest-rate strategist at Cantor Fitzgerald LP in New York. “That trade is, at least for now, in the background.”
Bond yields rose Monday above the 200-day moving average of 2.849 percent, a crucial level for chart-watchers who look at technical indicators as a guide to future price moves. After breaking the level, the yield could rise as high as 3 percent, according to Tyler Tucci, a strategist with RBS Securities in Stamford, Connecticut. Bonds yielded 2.91 percent at 12:48 p.m. New York time.
We recently had the opportunity to talk with an institutional money manager that has been utilizing ETFs for over a decade – long before the mainstream financial media was touting their benefits. Below, Scott Kubie, the Chief Investment Strategist at CLS Investments, discusses why his firm has embraced the exchange-traded product structure along with his outlook for the rest of the year.
ETF Database (ETFdb): What’s your firm’s story? How long have you been using ETFs for? Do you see this product structure as the preferred means for building diversified, low-cost, long-term portfolios?
Scott Kubie (SK):: CLS was founded with one specific mission, which has endured as our guiding principle:to be a trusted partner to financial advisors and to deliver innovative investment solutions and reliable portfolio management to individual investors.
If investors are nervous that a market correction is ahead, where should they go?
Ordinarily, the question is not a difficult one to answer. Boring, high-yielding utilities stocks trade like a mix between stocks and bonds, and thus are seen as providing protection in times of market turmoil. But after soaring in 2014 as yields fell, the sector is likely to fall if rates rise this year.
Similarly, little protection can be found in bonds themselves. One of the big concerns for stocks this year is that the Federal Reserve will soon hike rates—a move that should hurt bond prices even more than it hurts stock prices. Gold, too, often trades inversely to yields.
Faced with this predicament, many investors have turned to the stable-sounding consumer staples stocks. Valuations in names like Colgate-Palmolive and Coca-Cola have risen considerably as a result, but that poses a problem.
Apr 29, 2015 — More advisers will partner or find a way to leverage robo technology in their plan business, and the technology can be an efficient way to scale advice. —
Mitch Caplan, chief executive of Jefferson National, describes robo adviser technology as a GPS system that allows investors—especially those who are starting to save for retirement—to be self-directed, but still receive some guidance. High-net-worth individuals, who will demand much more human support, are less likely candidates to receive robo services, he says.
Todd Clarke, chief executive of CLS Investments, recalls that when his firm began offering money management advice to plan participants in 2001, he found participants crying out for actual advice. “This holds very true today,” Clarke tells PLANADVISER. After receiving education on the available investments, technical information on equities, bonds and asset allocation, participants in an enrollment meeting would leap at the offer of a managed account from Clarke’s firm. They wanted advice, not general information.
Financial advice remains the purview of the traditional advisor and “robo” hype is merely catalyzing increased technology adoption among advisors, a study says.
“Robo advisors” do not provide advice and have therefore never really been a threat to the RIA space, says the chief executive of CLS Investments, Todd Clarke, describing the term as a “misnomer.”
The robo conversation is critically important to the industry, but perhaps not for the reasons one might assume, according to CLS, which has conducted a survey on the topic.
Despite concerns over the potential for “robos” to dilute the value of in-person financial advice, advisors are rising to what has been widely portrayed as a challenge by intensifying their focus on technology – they just need help with working out how much to invest and in what.
In fact, many firms are embracing the competitive pressure, which is in many ways good for the industry, Cerulli Associates noted earlier this month.
“The eRIA or robo-advisor business model presents the opportunity to bring technological upgrades to an industry hampered by legacy systems,” said Frederick Pickering, a research analyst. See more here.
However, advisors “only have so much time and budget to allocate to technology” and, given the blistering pace of change, client demand for digital solutions and services can “quickly seem overwhelming,” CLS said.
International markets are finally starting to realize the potential for outperformance that has been there for years. So far this year, the MSCI ACWI ex U.S. is up 7.63 percent in dollar terms, putting it about 5 percentage points ahead of the S&P 500 Index.
For some investors who have struggled to hold international stocks through periods of underperformance, just seeing the broad index outperform is enough. For the more adventuresome, there are opportunities for outperformance in diversified-factor ETFs that could be used for a portion of their portfolios.
Based on changes in fundamentals and policies, international value stocks and companies buying back large portions of their shares represent attractive factors to emphasize in international portfolios.
To access those two phenomena in ETFs, there’s the iShares MSCI EAFE Value ETF (EFV | B-94) that represents international value stocks well, and the PowerShares International BuyBack Achievers Portfolio (IPKW | D-42) is the only ETF focused on international buybacks.
Financial advisors are confused about robo-advisors. “They’re not sure if robo-advisors are their enemy, friend or frenemy,” says Todd Clarke, CEO of CLS Investments, a $6 billion third-party money manager that partners with thousands of advisors.
Clarke was talking about the results of his firm’s survey of 134 independent advisors designed to gauge their view of the growing robo-advisor market. As of year-end 2014, robo-advisors had about $19 billion worth of assets under management, a fraction of the roughly $2.4 trillion managed by RIAs.
Close to 80% of the survey’s respondents said they perceived robo-advisors as a “potential” or “significant” threat to their business, but 97% said they believed that human advisors and robo-advisors could coexist. More specifically 34% said robo-advisors could help their practice while 21% said it could hinder it. Forty-five percent saw “no discernible impact.”
Asked whether they would trust a robo-advisor as a partner to help manage and oversee assets, 60% of advisors said yes, and 40% said no.
Clarke says the growing presence of robo-advisors will be the catalyst that pushes advisors into embracing more technology in their practices, but he doesn’t expect robo-advisors will replace financial advisors. Advisors will still do financial planning, for example, but more will do that online rather than in person, sitting at a desk across from their client, says Clarke. And just like TurboTax and other online tax software didn’t replace accountants, robo-advisors won’t replace human financial advisors, says Clarke.