Connect with us

ETF Trends

Webinar: A New ETF Strategy for the SPAC Surge

Avatar

Published

on

2020 was a lightning rod for financial innovation as a flurry of firms came to market through blank-check structures known as Special Purpose Acquisition Companies (SPACs). In fact, SPACs represented 50% of U.S IPO issuance last year vs. 23% in 2019. Register for our upcoming webcast as Tuttle Tactical Management joins ETF Trends to dive deep into the world of SPACs, explaining what they are and how advisors can utilize a specialized investment strategy to gain exposure to this disruptive growth opportunity.

Date: February 23, 2021
Time: 2 PM ET
Sponsored by: SPCX

SUMMARY

Dave Nadig, CIO of ETF Trends and ETF Database, will moderate a discussion on:

  • An overview of SPACs, why they exist, how the market has evolved and where it’s going
  • A primer on why a focused, actively managed approach is essential for delivering alpha
  • How financial advisors can enhance a portfolio through exposure to SPACs

Pending acceptance for one hour of CFP/CIMA CE credit for live and on-demand attendees

CFA Institute members are encouraged to self-document their continuing professional development activities in their online CE tracker.

SPEAKERS

Matthew Tuttle

CEO and CIO
Tuttle Tactical Management,
Advisor to the SPCX ETF

Dave Nadig

CIO, Director of Research
ETF Trends and ETF Database

Register at ETF Trends

Source: https://spacfeed.com/webinar-a-new-etf-strategy-for-the-spac-surge?utm_source=rss&utm_medium=rss&utm_campaign=webinar-a-new-etf-strategy-for-the-spac-surge

ETF Trends

SPACs Looking Spectacular in Actively Managed ETF Wrappers

Avatar

Published

on

Special purpose acquisition companies (SPACs) remain all the rage on Wall Street, and that theme is trickling down to the world of exchange traded funds. There are now three SPAC ETFs on the market, all of which are recent launches.

Competition is fierce in the exchange-traded fund (ETF) landscape, and differentiation is important for providers seeking to separate themselves from the masses. One trend that’s catching fire is special acquisition companies (SPACs), also referred to as blank check companies.

One of those funds is the SPAC and New Issue ETF (NYSE: SPCX), the first actively managed SPAC ETF. With the blank-check boom continuing in earnest, active management could be the way to go in terms of accessing this asset class.

SPCX’s active style has benefits in the SPAC universe.

“When looking at investing in a SPAC, focusing on the management team is key. Unlike a private equity fund, if you disagree with the management team and what the company bought, you can redeem your shares which is a major positive,” notes Robert Davis, a Partner and the Chief Investment Officer of Round Table Wealth Management.

Why SPACs Are Entering the Active ETF Space

SPACs have grown in popularity as they increasingly attract high-worth, credible sponsors. As the quality of their founders and the success of their merger companies grow, so does their integrity in the wider investment community.

Cementing the utility of SPAK is that the niche it addresses, though hot, is difficult to stock pick in, particularly before blank-check firms announce deals.

“Another positive of investing in SPACs is that it allows individuals to get a chance to experience the best fund managers they may otherwise not have access to. For example, not everyone is able to invest in Bill Ackman’s hedge fund. But with a SPAC, they can gain shares and access to his expertise as a professional money manage,” adds Davis.

Picking the winners of individual SPACs can be very difficult. The ETF structure allows investors to access the most liquid SPAC IPOs in a diversified basket. SPCX allows both financial advisors and retail investors to participate in an IPO private equity style of investing. Those are meaningful traits because many post-merger companies struggle after SPAC deals, underscoring the potential benefits of eschewing selection of individual names and embracing the fund’s active approach.

Source: ETF Trends – SPACs Looking Spectacular in Actively Managed ETF Wrappers

Source: https://spacfeed.com/spacs-looking-spectacular-in-actively-managed-etf-wrappers?utm_source=rss&utm_medium=rss&utm_campaign=spacs-looking-spectacular-in-actively-managed-etf-wrappers

Continue Reading

ETF Trends

Marrying Mid-Caps and Multi-Factors: The JHMM ETF

Avatar

Published

on

Investing in mid-cap stocks has its advantages. So do multi-factor exchange traded funds. Investors can marry those concepts with the John Hancock Multifactor Mid Cap ETF (NYSEArca: JHMM).

JHMM employs a rules-based selection process that is seen as a multi-factor approach, combining a number of factors in a single portfolio. Securities are adjusted by relative price and profitability. The underlying indices may overweight stocks with lower relative prices and underweight names with higher relative prices. The indices can also adjust for profitability by overweighting stocks with higher profitability and underweighting those with lower profitability.

JHMM YTD Performance

Some market observers note there are clear benefits with JHMM’s strategy.

“The resulting portfolio has noticeable tilts toward smaller and more-profitable stocks than the Russell Midcap Index, but its value tilt is less pronounced,” writes Morningstar analyst Ryan Jackson. “The quality focus is the primary culprit, as very cheap stocks tend to rank poorly in profitability metrics. This is a worthy trade-off. Mild value exposure is a fair price to pay to avoid stocks whose low profitability makes them unlikely to deliver strong returns.”

A Jump for JHMM: More on the Fund

Mid-cap companies are slightly more diversified than their small-cap peers, which allows many mid-sized companies to generate more consistent revenue and cash flow, along with more stable stock prices. Additionally, they are not so big that their size would slow down growth. Increased mergers and acquisitions activity could be just what mid-caps need to catch up to large- and small-cap stocks.

JHMM “sweeps in a wide range of mid-cap stocks, so firm-specific risk is not a concern,” notes Jackson. “Neither is sector risk, as this fund evaluates firms’ value and profitability traits on a sector-relative basis, yielding a portfolio whose sector composition matches the Russell Midcap Index. This fund has exhibited more volatility than the Russell Midcap since its 2015 inception, which is a function of its smaller market-cap orientation compared with the index.”

Historical data indicate that even modest allocations to mid-cap stocks can improve long-term returns compared to portfolios that don’t feature mid-cap exposure.

JHMM’s “integrated approach has produced solid exposure to the quality and small-size factors. For example, its return on assets–a measure of profitability–comfortably exceeds that of the Russell Midcap Index. This fund’s small-size tilt is milder but consistent. The average market-cap of this fund’s holdings has hovered about $2 billion lower than the Russell Midcap since this fund’s inception. Value has not emerged the same way. Measures like price/book and price/earnings indicate a very similar value-growth orientation for this fund and the Russell Midcap Index,” according to Jackson.

For more on multi-factor strategies, visit our Multi-Factor Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Source: https://www.etftrends.com/multi-factor-channel/marrying-mid-caps-multi-factors-jhmm-etf/

Continue Reading

ETF Trends

The Volatility Management Portfolio: A Strong Option for Divided Government

Avatar

Published

on

It seems that Democratic nominee Joe Biden will be the next president, the Democrats will lose seats in the House, and the fate of the Senate won’t be determined until January.

In other words, it’s likely we’re heading toward a divided government, a scenario markets appear to like for now, but may grow uncomfortable with as time goes on. In fact, some prior instances of divided governments lead to lethargic returns for equities.

Investors can prepare for that with model portfolios, such as the Volatility Management Model Portfolio, which is part of WisdomTree’s broader universe of Modern Alpha model portfolios.

The Volatility Management Model Portfolio is “designed for investors who seek to incorporate alternative investments into a traditional portfolio using ETFs. Volatility Management is a reference to including non-traditional assets in addition to stocks and bonds in order to reduce overall portfolio volatility as measured by annual standard deviation. This model portfolio was previously known as the Alternatives Model Portfolio,” according to WisdomTree.

Volatility Management for Volatile Times

The size of the next fiscal stimulus package in particular hinges on the final makeup of Congress,” notes Director and Senior Investment Strategist Paul Eitelman. “Given that Congress controls the power of the purse—the ability to alter tax or spending policies—the outcome of these races is highly significant for the macro-market outlook, perhaps even more so than the outcome of the presidential race,” Eitelman remarked

Underscoring the relevance of this model portfolio now were pre-election expectations of a blue wave, which would have led to increased Democratic control in nation’s capitol, likely unleashing massive spending and stimulus. Now, that scenario is likely off the table.

That could lead to some increased turbulence for investors, but the WisdomTree model portfolio offers ways for dealing with that situation.

One of the components in WisdomTree’s Volatility Management Model Portfolio is the AGFiQ U.S. Market Neutral Anti-Beta Fund (BTAL).

BTAL YTD Performance

BTAL tracks an equal-weighted index that takes long positions in low beta US stocks offset by short positions in high beta US stocks. It provides consistent exposure to the anti-beta factor by investing in the underlying index which reconstitutes and rebalances monthly in equal dollar amounts in equally weighted long low beta positions and equally weighted short high beta positions within each sector.

For more on how to implement model portfolios, visit our Model Portfolio Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Source: https://www.etftrends.com/model-portfolio-channel/volatility-management-portfolio-strong-option-for-divided-government/

Continue Reading

ETF Trends

Why Chinese Yuan Stands Out Among EMFX

Avatar

Published

on

By Fran Rodilosso, Head of Fixed Income ETF Portfolio Management, CFA, VanEck

We wrote last month about the attractive yield pickup that onshore Chinese bonds currently offer versus U.S. and developed markets fixed income, which is particularly striking given several technical and fundamental tailwinds impacting the asset class. Like many non-U.S. dollar investments, particularly in emerging markets, investors need to consider not only the yield level but also the potential for currency appreciation or depreciation. Local currency emerging markets bonds have historically provided several tactical opportunities to take advantage of bouts of U.S. dollar weakness over the past five years, but overall currency movements have detracted from total return. We believe that the Chinese yuan (CNY), however, should not be grouped into the broad category of emerging markets currencies (EMFX) and has several characteristics that set it apart, potentially making exposure attractive to global bond investors—even those wary of EMFX volatility. These characteristics may also help China’s onshore bonds improve the risk-return profile of broad emerging markets local currency debt allocations.

CNY Has Behaved

Looking at the chart above, CNY has been less volatile and displayed greater resiliency than the basket of currencies that represent broad emerging markets exposure. In fact the correlation between the CNY and this basket has been historically low, at only 20%.CNY’s value is determined through a managed rate pegged to a basket of currencies, and is only allowed to move within a narrow band on a daily basis. This has reduced the currency’s volatility, but longer term the currency’s value should generally reflect fundamentals. Even with the recent removal of the “countercyclical adjustment,” there are many factors that we believe provide long term support.

Strong and resilient economic growth, particularly this year, has been a key driver of CNY strength relative to the U.S. dollar and in contrast to the weakness experienced by other more vulnerable emerging markets. More broadly, China’s massive economy and role in driving global growth set it apart from other emerging markets. Although no currency can match the U.S. dollar in terms of its role in the global economy, the CNY is growing in importance. It now makes up approximately 2% of foreign exchange reserve assets and that is expected to grow to up to 10% by 2030, according to Morgan Stanley. That will make it the third largest reserve currency, behind the U.S. dollar and euro. As China’s economy continues its transformation into a more consumer led economy that is less dependent on lower value exports, policymakers have also continued the gradual opening of onshore markets to foreign investment. As China’s weight in global bond and equity indices continues to increase, foreign investor flows may provide further support to the CNY. Note in the chart above that, despite the improving fundamental and technical stories, the currency is still 5% weaker versus the U.S. dollar than it was just two-and-a-half years ago.

In the context of a portfolio or index of emerging markets local currency bonds, China’s onshore bonds’ growing weight may act as a stabilizer in future periods of U.S. dollar strength. With less than half the volatility and a low correlation with the broader EMFX universe, CNY exposure can provide valuable diversification benefits and relative stability within a portfolio while also still providing an attractive yield pickup.

Originally published by VanEck, 11/5/20


DISCLOSURES

Source: Bloomberg. Data as of 10/31/20

Please note that Van Eck Associates Corporation serves as investment advisor to investment products that invest in the asset class(es) included herein.

J.P. Morgan GBI-EM Global Diversified Index tracks emerging markets local government bonds that are accessible by most foreign investors. The weighting scheme provides additional diversification by more evenly distributing weights among the countries in the index. Countries are capped at 10%.

This content is published in the United States for residents of specified countries. Investors are subject to securities and tax regulations within their applicable jurisdictions that are not addressed in this content. Nothing in this content should be considered a solicitation to buy or an offer to sell shares of any investment in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction, nor is it intended as investment, tax, financial, or legal advice. Investors should seek such professional advice for their particular situation and jurisdiction.

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.

All investing is subject to risk, including the possible loss of the money you invest. Bonds and bond funds will decrease in value as interest rates rise. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.

Source: https://www.etftrends.com/tactical-allocation-channel/why-chinese-yuan-stands-out-among-emfx/

Continue Reading
Esports3 days ago

Dota 2 Patch 7.29 Will Reveal a New Hero

Esports4 days ago

Valorant Redeem Codes: How to redeem?

Blockchain5 days ago

MicroStrategy kauft weitere 253 BTC für 15 Millionen US-Dollar

Esports4 days ago

How to watch the TFT Fates Championship

Esports3 days ago

Best Warzone guns: the weapons you need to use in Black Ops Cold War Season 2

Esports5 days ago

Ludwig passes 200,000 Twitch subscribers, closes in on Ninja’s record

Esports4 days ago

W33 Removed From Team Nigma’s Active Roster

Blockchain4 days ago

Playa del Carmen: Krypto-Hotspot mit HODLversity

Esports5 days ago

“Lost control,” TM Sentinel issues apology; seeks forgiveness for ‘disgraceful’ comments

Esports5 days ago

Tournament platform Epulze secures £4.7m investment

Esports5 days ago

These are the teams participating in the F1 Pro Series 2021

Blockchain4 days ago

Unternehmen gründen Crypto Council: Fidelity und Coinbase mit dabei

Fintech4 days ago

Standard Chartered turbocharges digital payments proposition with investment and the merger of CurrencyFair with Assembly Payments

Fintech5 days ago

Leading SME finance provider Capify breaking new ground with the launch of their exclusive solution for finance brokers

Esports5 days ago

[Interview] Leo: “Work Auster Force is definitely a mechanically gifted team”

Esports5 days ago

The five most shocking roster moves in CSGO history

Esports3 days ago

Overwatch Archives event 2021: new challenges, skins, and more

Fintech2 days ago

Novatti’s Ripple partnership live to The Philippines

Blockchain3 days ago

Evil Geniuses Partner With Cryptocurrency Exchange Platform Coinbase

Blockchain5 days ago

Steigt der Bitcoin Preis bald über 60.000 USD?

Trending