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Jeff Margolin
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  Asset Flows Monitor May 2021 Edition
Posted Under: ETFs

 
Asset Flows Monitor May 2021 Edition
  • Net inflows for US-listed ETFs were strong in April, totaling $89.8 billion.  Total ETF assets under management reached $6.17 trillion, another new all-time month-end high water mark.
  • Equity ETFs brought in the lion's share of net inflows in April (+$61.2 billion), bringing trailing 12-month net inflows to $429.9 billion.
  • Fixed income ETFs brought in $29.0 billion in net inflows in April, bringing trailing 12-month net inflows to $244.8 billion.
  • Commodities ETFs had net outflows in April (-$1.0 billion), bringing trailing 12-month net inflows to $10.3 billion.  A closer look shows that precious metals ETFs (-$1.8 billion) accounted for most of April's net outflows, while broad market commodity ETFs had net inflows totaling $0.9 billion.
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Posted on Thursday, May 6, 2021 @ 12:04 PM • Post Link Share: 
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  Alternatives Update 1st Quarter 2021
Posted Under: Alternatives
The Biden presidency is officially underway and the agenda they have laid out is no surprise: massive spending, massive deficits, massive tax increases, massive governmental expansion. Historically, such activity would raise investor concerns about distorted incentives, reduction in productivity and stifling of innovation. Throw conventional wisdom out the door; the stock market loves it. Fully in step with the new administration, the Federal Reserve (the "FED") has been outspoken in calling for outsized fiscal spending and Congress has delivered, as evidenced by the staggering spending deficit. Apparently the FED believes direct intervention into the capital markets and growing their $7 trillion balance sheet an additional $120 billion each month is not enough (see Figure 1). 
Year-over-year CPI came in at a paltry 1.7% for February (as reported in March 2021) which seems to be a bit of a disconnect with price changes in major swaths of the economy (see Figure 2). The shortage of semiconductors is grabbing headlines, but supply disruptions are affecting many sectors of the economy. Kimberly Clark, a consumer products global giant, announced they intend to increase prices in the mid to high single digits, yet neither the FED nor the Treasury convey worry.

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Posted on Tuesday, May 4, 2021 @ 2:14 PM • Post Link Share: 
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  Closed-end Fund Review - First Quarter 2021
Posted Under: CEFs
FIRST QUARTER 2021 OVERVIEW
Following a very strong fourth quarter of 2020 when the average closed-end fund (CEF) increased by 12.75% (https://www.ftportfolios.com/Commentary/Insights/2021/1/22/fourth-quarter-2020), CEFs continued their positive momentum and gained 6.42% for the first quarter of 2021. It was a broad rally with equity CEFs rising 11.94%, fixed-income CEFs gaining 3.36%, municipal CEFs increasing 1.72% and taxable fixed-income CEFs growing 4.71%. Equity CEFs benefitted from the 6.17% increase in the S&P 500 Index as well as the 3.49% increase in the MSCI All-Country World Ex US Index. Fixed-income CEFs (particularly credit sensitive fixed-income CEFs) benefitted from strength in the underlying high-yield bond and leveraged loan markets. The ICE BofA High-Yield Bond Index was up 0.91% for the first quarter, while the S&P/LSTA Leveraged Loan Index gained 1.78%. Despite a decrease of 0.64% for the ICE BofA 7-12 Yr. Municipal Index during the quarter, municipal CEFs increased 1.72%—which, in my view, reflects the demand for the attractive 4.26% distribution yield the average municipal CEF provides. 
(Source: Morningstar. All performance is based on share price total return).

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Posted on Thursday, April 22, 2021 @ 9:04 AM • Post Link Share: 
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  Asset Flows Monitor April 2021 Edition
Posted Under: ETFs

 
Asset Flows Monitor April 2021 Edition
  • Net inflows for US-listed ETFs were strong in March, totaling $87.9 billion.  Total ETF assets under management reached $5.84 trillion, another new all-time month-end high water mark.
  • Equity ETFs brought in the lion's share of net inflows in March (+$78.9 billion), bringing trailing 12-month net inflows to $385.0 billion.
  • Fixed income ETFs brought in $13.1 billion in net inflows in March, bringing trailing 12-month net inflows to $237.9 billion.
  • Commodities ETFs had net outflows in March (-$4.4 billion), bringing trailing 12-month net inflows to $24.3 billion.  A closer look shows that precious metals ETFs (-$5.0 billion) accounted for most of March's net outflows, while broad market commodity ETFs had net inflows totaling $1.1 billion.

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Posted on Friday, April 9, 2021 @ 4:26 PM • Post Link Share: 
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  First Trust Industrial and Infrastructure ETF Primer
Posted Under: ETFs
As the global economy prepares for life after the COVID-19 pandemic, we find that many investors' attention has begun to shift towards industries and themes that may benefit. We view industrial, manufacturing, and infrastructure stocks as potential beneficiaries of a cyclical rebound in earnings in the months ahead, but also believe many of these stocks may benefit from several longer-term trends, such as the growing likelihood of large-scale public infrastructure spending and the desire of many companies to bolster their supply chains. Moreover, we believe valuations for many of these companies seem relatively attractive. In this report, we provide a brief overview of the methodologies of four First Trust ETFs that provide exposure to industrial, infrastructure and manufacturing stocks.

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Posted on Friday, March 19, 2021 @ 5:34 PM • Post Link Share: 
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  Asset Flows Monitor March 2021 Edition
Posted Under: ETFs

 
Asset Flows Monitor March 2021 Edition
  • Net inflows for US-listed ETFs were robust in February, totaling $89.5 billion.  Total ETF assets under management reached $5.71 trillion, an all-time month-end high water mark.
  • Equity ETFs had the strongest net inflows in February (+$79.3 billion), bringing trailing 12-month net inflows to $310.4 billion.
  • Fixed income ETFs brought in $11.8 billion of net inflows in February, bringing trailing 12-month net inflows to $201.7 billion.
  • Commodities ETFs had $2.4 billion of net outflows in February, bringing trailing 12-month net inflows to $33.9 billion. Most of February's net outflows came from precious metals ETFs (-$3.5 billion), while net inflows for broad market commodity ETFs accelerated to $1.3 billion.
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Posted on Friday, March 5, 2021 @ 9:10 AM • Post Link Share: 
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  Asset Flows Monitor February 2021 Edition
Posted Under: ETFs

 
Asset Flows Monitor February 2021 Edition
  • Net inflows for US-listed ETFs started 2021 on a strong note, with $69.9 billion in net inflows in January. Total ETF assets under management reached $5.56 trillion, an all-time month-end high water mark.
  • Equity ETFs had the strongest net inflows in January (+$45.8 billion), bringing trailing 12-month net inflows to $247.7 billion.
  • Fixed income ETFs brought in $22.3 billion in net inflows in January, bringing trailing 12-month net inflows to $213.4 billion.
  • Commodities ETFs had $0.9 billion in net inflows in January, bringing trailing 12-month net inflows to $38.7 billion.

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Posted on Friday, February 5, 2021 @ 1:24 PM • Post Link Share: 
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  Seeking Alpha with Thematic ETFs
Posted Under: ETFs
Over the past few years, thematic ETFs have grown in popularity among financial professionals seeking exposure to a variety of investment trends, many of which are related to innovative, high-growth industries. While there is no industry-standard definition for what makes an ETF "thematic," we generally consider those that seek to capture specific trends—often outside of broad sector constraints—as thematic investments. Many of these ETFs focus on secular growth opportunities in digital technologies such as cybersecurity, cloud computing, and blockchain, while some target trends in other industries such as water, agriculture, and green energy. For investment professionals seeking to incorporate thematic ETFs in client portfolios, we offer a few considerations and suggestions below.

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Posted on Friday, February 5, 2021 @ 8:20 AM • Post Link Share: 
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  Alternatives Update 4th Quarter 2020
Posted Under: Alternatives
In the fourth quarter of 2020 Wall Street cheered but Main Street seethed; it was truly a study in extremes. In our opinion, the highs were soaring assets prices, renewed cryptocurrency zeal, and emergency approval by the FDA of two COVID-19 vaccines. The lows were tremendous rancor surrounding the Presidential election, swaths of the economy remaining severely hobbled by the pandemic and rising COVID-19 deaths as a second wave gripped not only the United States but many countries across the globe.  

Congress wrestled over the next round of pandemic stimulus with some members of the Republican party re-embracing fiscal discipline once it became clear that Joe Biden would be the next President.  Meanwhile some members of the Democratic party seemed to move even further into monetary fantasyland with discussions of total student loan forgiveness, multi-trillion-dollar infrastructure and global warming initiatives, as well as supersizing more rounds of direct-to-consumer stimulus checks.  The Federal Reserve (the "FED") made nary a mention of any potential bubbles and did nothing to dissuade the notion that they were ready, willing and able to keep the printing presses rolling as well as find new and inventive ways to use those printing presses.

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Posted on Friday, February 5, 2021 @ 8:01 AM • Post Link Share: 
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  Closed-end Fund Review - Fourth Quarter 2020
Posted Under: CEFs
FOURTH QUARTER AND 2020 OVERVIEW
Following the third quarter, when the average closed-end fund (CEF) was up 3.27%, CEFs continued their positive momentum and increased—on average—by 12.75% during the fourth quarter. (https://www.ftportfolios.com/Commentary/Insights/2020/10/26/third-quarter-2020) The significant rally many CEFs had in the second, third and fourth quarters was enough to bring the average CEF to a positive total return of 2.66% for all of 2020. While this might not seem all that impressive, when you consider the average CEF was lower by 23.46% at the end of the first quarter as a result of the initial shutdown of the global economy, the roughly 3% average total return for 2020 becomes much more impressive. (Source: Morningstar. All performance is based on share price total return).

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Posted on Friday, January 22, 2021 @ 9:42 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 PREVIOUS POSTS
Asset Flows Monitor January 2021 Edition
Asset Flows Monitor December 2020 Edition
First Trust Green Energy ETF Primer
Asset Flows Monitor November 2020 Edition
Alternatives Update 3rd Quarter 2020
Closed-end Fund Review - Third Quarter 2020
What’s Fueling the Rise in Green Energy ETFs?
Asset Flows Monitor October 2020 Edition
Asset Flows Monitor September 2020 Edition
How Have Presidential Elections Impacted Biotechnology Stocks?
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