Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
 

  Alternatives Update 4th Quarter 2022
Posted Under: Alternatives

As 2022 ended, many capital market participants gladly said adieu. It was a year of horrid returns for traditional portfolios, a stellar year for alternative strategies, and possibly the year that forced regulatory agencies to get more serious about their oversight of the digital investment arena after a string of historic thefts, alleged frauds, and bankruptcies.  Inflation remained quite high at 7.1% (CPI YoY) but continued its downward trajectory in the 4th quarter. Risk assets rallied on the hopes that the Federal Reserve (the “Fed”) was nearing the end of its tightening cycle.  Mortgage rates moved below 7% but are still at levels not seen in over a decade.  Concluding that peak inflation is in the rearview mirror presumes many things: well behaved energy markets, resolute Central Banks, less international strife, reasonable environmental regulations, and disciplined government spending. None of these can be taken for granted or even considered probable, in our opinion.  

Investor focus seems to have shifted from inflation as a juggernaut to how soon the Fed’s pivot on interest rates will come and flash the “all clear” to go all in on risk.  The Fed has repeatedly said high rates are here to stay for quite some time and they will not be cutting in 2023.  In our view, the long end of the U.S. Treasury market and the outsized positive moves of equities in response to softening economic data convey that the markets don’t believe the narrative and think sooner than later, the Fed will fall back on their old ways of priming the economy with easy money.  Inflation still exceeds growth in the U.S. by a wide margin, only a robust job market prevents classifying the current economic environment as solidly stagflationary.    

To view the entire article, click here.

Posted on Monday, January 23, 2023 @ 2:12 PM • Post Link Share: 
Print this post Printer Friendly
  Closed-End Fund Fourth Quarter 2022 Review
Posted Under: CEFs

Following three consecutive quarters of negative total returns for the average closed-end fund (CEF), CEFs rebounded during the fourth quarter and posted an average return of 6.4%. It was a broad rally in the fourth quarter with the average equity CEF returning 9.3%, fixed-income CEF returning 4.9%, municipal CEF returning 4.4% and taxable fixed-income CEF returning 5.1%. Equity CEFs benefitted from the 7.6% return for the S&P 500 Index during the quarter. Fixed-income CEFs benefitted from positive total returns from several key fixed-income indices for the quarter including a 3.9% return for the S&P National AMT-Free Municipal Bond Index, a 4.1% return for the iBoxx USD Liquid High Yield Index, a 3.1% return for the iBoxx USD Liquid Leveraged Loans Index, a 1.9% return for the S&P U.S. Aggregate Bond Index and a 4.6% return for the iBoxx USD Liquid Investment Grade Index. (Source: S&P)

To view the entire article, click here.

Posted on Wednesday, January 18, 2023 @ 11:24 AM • Post Link Share: 
Print this post Printer Friendly
  ETF Data Watch - Asset Flows Monitor January 2023 Edition
Posted Under: ETFs
Supporting Image for Blog Post

 

Asset Flows Monitor January 2023 Edition

  • Net inflows for US-listed ETFs totaled $41.1 billion in December, bringing total ETF assets under management to $6.46 trillion.

  • Equity ETFs had net inflows totaling $24.3 billion in December, bringing trailing 12-months (TTM) net inflows to $366.2 billion.

  • Fixed income ETFs had net inflows totaling $17.5 billion in December, bringing TTM net inflows to $195.2 billion.

  • Commodities ETFs had net outflows totaling $1.5 billion in December, bringing TTM net outflows to $4.2 billion.  Broad commodities ETFs (-$1.1 billion) was the weakest commodity sub-category in December.

Click here to continue reading.

Posted on Tuesday, January 10, 2023 @ 10:35 AM • Post Link Share: 
Print this post Printer Friendly
  Market Minute December 2022
Posted Under: Market Minute

For the three calendar years ending in 2021, the price appreciation of the S&P 500 Index was 90%. The total return with dividends was 100%. Only 10% of the return came from dividends. That belies history. According to Ibbotson Associates, a division of Morningstar, dividends have provided approximately 39% of the 10.46% average annual total return on the S&P 500 Index from 1926 through 2021.

Continue reading by clicking here.

Posted on Tuesday, December 6, 2022 @ 1:16 PM • Post Link Share: 
Print this post Printer Friendly
  ETF Data Watch - Asset Flows Monitor December 2022 Edition
Posted Under: ETFs
Supporting Image for Blog Post

 

Asset Flows Monitor December 2022 Edition

  • Net inflows for US-listed ETFs totaled $66.0 billion in November, bringing total ETF assets under management to $6.56 trillion.
  • Equity ETFs had net inflows totaling $41.8 billion in November, bringing trailing 12-months (TTM) net inflows to $421.5 billion.
  • Fixed income ETFs had net inflows totaling $26.1 billion in November, bringing TTM net inflows to $199.1 billion.
  • Commodities ETFs had net outflows totaling $1.5 billion in November, bringing TTM net outflows to $5.2 billion.  Precious metals ETFs (-$1.3 billion) was the weakest commodity sub-category in November.

Click here to continue reading.

 

Posted on Monday, December 5, 2022 @ 1:59 PM • Post Link Share: 
Print this post Printer Friendly
  Asset Flows Monitor November 2022 Edition
Posted Under: ETFs
Supporting Image for Blog Post

 

Asset Flow Monitor November 2022 Edition

  • Net inflows for US-listed ETFs totaled $91.3 billion in October, bringing total ETF assets under management to $6.30 trillion.
  • Equity ETFs had net inflows totaling $61.7 billion in October, bringing trailing 12-months (TTM) net inflows to $440.0 billion.
  • Fixed income ETFs had net inflows totaling $31.9 billion in October, bringing TTM net inflows to $186.8 billion.
  • Commodities ETFs had net outflows totaling $2.9 billion in October, bringing TTM net outflows to $2.2 billion. Precious metals ETFs (-$2.0 billion) and broad commodities ETFs (-$0.8 billion) were the weakest sub-categories in October.

Click here to continue reading.

Posted on Monday, November 7, 2022 @ 1:18 PM • Post Link Share: 
Print this post Printer Friendly
  Market Minute November 2022
Posted Under: Market Minute

It's well known that companies underpromise and overdeliver on earnings. They set the bar low and analysts follow along with their estimates and a modest earnings outperformance is almost always the result once earnings are reported. Just look at the average earnings surprise for the S&P 500 Index each quarter from 2015 through 2019 [see chart in link below]. "Surprises" averaged 5.3% over those 20 quarters. Surprises were always pleasant and positive. In truth, the market wasn't really surprised during those quarters. It expected modest outperformance over the consensus. Everyone knows how it works. But starting in the second quarter of 2020, the earnings outperformance actually did surprise the market. For the last three quarters of 2020 and for all 4 quarters of 2021, earnings surprises averaged 16.1%. It's a significant reason we saw such big stock market gains in the last three quarters of 2020 (the S&P 500 Index was up 47% for those final 9 months) and 2021 (29% for the year). We can see, however, that the first 3 three quarters of this year are back to being more normal "surprises." Our expectation going forward is that we are back to normal when it comes to outsized earnings beats. The market won’t reward average surprises with high returns.

Continue reading by clicking here.

Posted on Friday, November 4, 2022 @ 3:34 PM • Post Link Share: 
Print this post Printer Friendly
  Hopeful Signs Emerging for the Biotechnology Industry
Posted Under: ETFs
The biotechnology and pharmaceutical industries have positively impacted the lives of billions of people over the past few years with the rapid development of therapeutics and vaccines for Covid-19. However, the biotechnology industry, which is generally credited with driving the most cutting-edge innovation, has underperformed the broader stock market over the past few years. Performance aside, hopeful signs are emerging thanks to more clarity on which drugs may be impacted by future anticipated price controls stemming from the recent passage of the Inflation Reduction Act, a robust pipeline of promising medicines and therapeutics, and a surprisingly resilient track record for the industry during periods of economic weakness. In our view, biotechnology is uniquely positioned to provide exposure to important innovations whose value may not be well reflected in equity prices today.
 
Click Here to continue reading.
Posted on Tuesday, October 25, 2022 @ 11:43 AM • Post Link Share: 
Print this post Printer Friendly
  Income ETFs: Beyond Traditional Dividend Strategies
Posted Under: ETFs
As we highlighted in our Inside First Trust ETFs newsletter earlier this year, dividend exchange traded funds (ETFs) have seen significant net inflows lately, which we attribute to investors seeking exposure to higher quality stocks, alternative sources of income, and dividend growth to seek to hedge against higher inflation. For those looking for income strategies across asset classes or from specific sectors and industries, this report provides a brief overview of four First Trust ETFs focused on income.
 
Thematic Dividends – Seek Inflation Protection with Income
First Trust Indxx Global Natural Resources Income ETF (FTRI) 
 
FTRI is a global portfolio of the 50 highest dividend yielding companies involved in five upstream natural resource categories–energy, materials, agriculture, water, and timber. On a quarterly basis, the underlying index is rebalanced so that no single category accounts for more than 30% of the index. To avoid high-yielding stocks that may be unable to sustain their dividends, FTRI includes screens for positive earnings-per-share (EPS), two consecutive years of dividends, and rising dividend payments.
 
FTRI provides indirect commodity exposure by holding common stock of companies involved in natural resource exploration and production. In addition to potentially benefitting from cash dividends and stock buybacks, equity investors may avoid some of the risks of investing in futures-based commodity strategies, such as negative roll yield, higher volatility, and potentially greater exposure to macroeconomic and geopolitical factors. Through the first nine months of 2022, FTRI outperformed the S&P 500 Index by 18.7% on a net asset value (NAV) total return basis.
 
Click Here to continue reading.
Posted on Tuesday, October 25, 2022 @ 8:37 AM • Post Link Share: 
Print this post Printer Friendly
  Closed-End Fund Second Quarter 2022 Review
Posted Under: CEFs
Following a very difficult second quarter of 2022 for the equity and credit markets (https://www.ftportfolios.com/Commentary/Insights/2022/7/19/second-quarter-2022) as well as for many closed-end funds (CEFs), the third quarter of 2022 was also a difficult one. Many of the factors that battered the equity and credit markets during the first half of 2022 were also present in the third quarter, including concerns about the potential for a global recession, rising short- and long-term interest rates, and stubbornly high inflation data. The total return for the average CEF was -6.6% for the third quarter and is now -22.9% for the year, as of 9/30/22. The weakness was widespread and similar to the second quarter, every single CEF category tracked by Morningstar posted a negative total return with the exception of the MLP category  where the average MLP CEF posted a third quarter total return of 2.8%. For the third quarter, equity CEFs returned -6.6%, fixed-income CEFs returned -6.6%, municipal  CEFs returned -8.5%, and taxable fixed-income CEFs returned -5.1%. As of 9/30/22, the year-to-date (YTD) total return for the average equity CEF was -20.0%, the average  fixed-income CEF was -24.3%, the average municipal CEF was -26.4% and the average taxable fixed-income CEF was -22.7%. 
 
To view the entire article, click here.
Posted on Friday, October 21, 2022 @ 1:30 PM • Post Link Share: 
Print this post Printer Friendly

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.
Search Posts
INVESTMENT INSIGHTS
Contributors
Dave McGarel
CIO, COO | Bio
  1. Market Minute
Bill Housey
Senior Portfolio Manager | Bio
  1. Income Insights
Ryan Issakainen
ETF Strategist | Bio
  1. ETF Data Watch
  2. ETF Observations
  3. Inside First Trust ETFs
Jeff Margolin
Closed-End Fund Analyst | Bio
  1. Closed-End Fund Quarterly Commentary
Client Resource Kits
  1. Alternatives
  2. Equity
  3. Fixed-Income
  4. Markets In Perspective
  5. Investment Themes
Other Newsletters
  1. Alternatives Update
  2. Housing Tracker
  3. Equity Newsletter
Subscribe To Receive Email
 


 PREVIOUS POSTS
Alternatives Update 3rd Quarter 2022
Asset Flows Monitor October 2022 Edition
Asset Flows Monitor September 2022 Edition
First Trust Energy Sector ETF Primer
Short-Term Weakness may Provide an Attractive Entry Point for Investors in Energy ETFs
Asset Flows Monitor August 2022 Edition
Alternatives Update 2nd Quarter 2022
Closed-End Fund Second Quarter 2022 Review
Asset Flows Monitor July 2022 Edition
Asset Flows Monitor June 2022 Edition
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2023 All rights reserved.