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| Has the Balance between Potential Risks and Returns Shifted in Favor of Bond Investors? |
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Posted Under: Podcast |
In this episode of the podcast, Ryan is joined by Bill Housey, Managing Director of Fixed Income at First Trust for a discussion about the US economy, the Federal Reserve, interest rates, and why Bill believes that an asymmetry between risk and return has shifted in favor of bond investors.
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| Market Minute - March 2024 |
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Posted Under: Market Minute |
One of our favorite Yogi Berra sayings is “Nobody goes there anymore. It’s too crowded.” Momentum was the most dominant equity factor in February (see chart above). In fact, it has been the main factor behind the massive equity rally that started in late October that has added almost 1,000 points to the S&P 500 Index in four months. The momentum factor is also extremely crowded... but everyone is still going there. For now. While we employ the momentum factor in our research, we prefer a multifactor approach and also like to see tangible evidence why the momentum factor is working and can continue to outperform. That is where our concern lies.
Click here to read entire piece.
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| Asset Flows Monitor March 2024 Edition |
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Posted Under: ETFs |
- Net inflows for US-listed ETFs totaled $66.7 billion in February, bringing total ETF assets under management to $8.34 trillion.
- Equity ETFs had net inflows totaling $48.9 billion in February, bringing trailing 12-months (TTM) net inflows to $444.1 billion. Active equity ETFs accounted for $15.5 billion in net inflows in February, compared to $33.4 billion in net inflows for passive equity ETFs. Total AUM in actively managed equity ETFs was $365.9 billion, accounting for 5.5% of all equity ETF assets ($6.65 trillion), as of 2/29/24.
- Fixed income ETFs had net inflows totaling $11.6 billion in February, bringing TTM net inflows to $212.0 billion. Active fixed income ETFs accounted for $6.5 billion in net inflows in February, compared to $5.1 billion in net inflows for passive fixed income ETFs. Total AUM in actively managed fixed income ETFs were $186.7 billion, accounting for 12.3% of all fixed income ETF assets ($1.52 trillion), as of 2/29/24.
- Commodities ETFs had net outflows totaling $2.5 billion in February, bringing TTM net outflows to $15.1 billion. Precious metals ETFs (-$2.5 billion) was the weakest commodity sub-category in February.
To continue reading, click here.
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| What Solutions Can Direct Indexing Offer? |
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Posted Under: Podcast |
In the episode of the podcast, Ryan speaks with Jon DiGiovanni, Managing Director of Direct Indexing and Separate Managed Accounts at First Trust, about some of the reasons that Direct Indexing has quietly been one of the fastest growing innovations in the financial services industry.
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| Getting Broader and Smaller in 2024 |
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Posted Under: ETFs |
After an unusually good year for US equities in 2023, concerns about high valuations and concentration risk for U.S. equity indices, such as the S&P 500® Index, have led some financial professionals to seek potentially better opportunities among small- and mid-capitalization ("SMid-cap") stocks. However, fears that an economic recession could be on the horizon have led some to shy away from tilting portfolio allocations towards smaller companies. Below, we discuss these issues, highlighting why we believe that SMid-cap stocks may offer an attractive opportunity, but also why selectivity may be critical for navigating the current market environment. We then discuss why we believe those seeking to increase allocations to SMid-cap stocks should consider the First Trust SMID Cap Rising Dividend Achievers ETF (SDVY).
Click Here to continue reading.
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| Dissecting Incentives and Opportunities in (Traditional and Alternative) Energy |
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Posted Under: Podcast |
In this episode of the podcast, Ryan is joined by Jim Murchie, co-founder of Energy Income Partners for a deep dive into the energy industry, discussing incentives and opportunities that lie on the horizon.
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| ETF Data Watch Asset Flows Monitor February 2024 Edition |
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Posted Under: ETFs |
- Net inflows for US-listed ETFs totaled $42.5 billion in January, bringing total ETF assets under management to $8.11 trillion.
- Equity ETFs had net inflows totaling $17.2 billion in January, bringing trailing 12-months (TTM) net inflows to $395.3 billion. Active equity ETFs accounted for $15.3 billion in net inflows in
- January, compared to $1.9 billion in net inflows for passive equity ETFs. Total AUM in actively managed equity ETFs were $340.7 billion, accounting for 5.3% of all equity ETF assets ($6.43 trillion), as of 1/31/24.
- Fixed income ETFs had net inflows totaling $21.4 billion in January, bringing TTM net inflows to $201.5 billion. Active fixed income ETFs accounted for $4.9 billion in net inflows in January, compared to $16.5 billion in net inflows for passive fixed income ETFs. Total AUM in actively managed fixed income ETFs were $181.1 billion, accounting for 11.9% of all fixed income ETF assets ($1.52 trillion), as of 1/31/24.
- Commodities ETFs had net outflows totaling $3.2 billion in January, bringing TTM net outflows to $13.1 billion. Precious metals ETFs (-$2.3 billion) was the weakest commodity sub-category in January.
To continue reading, click here.
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| Market Minute - February 2024 |
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Posted Under: Market Minute |
U.S. stocks have dominated the rest of the world’s stocks over the last 10 years. The MSCI USA Index outperformed the MSCI ACWI ex USA Index by 770 basis points annually over that period. The cumulative return over those 10 years was 208% for the MSCI USA Index and 51% for the MSCI ACWI ex USA Index. According to MSCI Global, as of January 31, 2014, the U.S. weight in the MSCI ACWI Index was 48.90%, as of January 31, 2024 it was 63.16%.
Click here to read entire piece.
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| Alternatives Update 4th Quarter 2023 |
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Posted Under: Alternatives |
In the fourth quarter of 2023, the Federal Reserve (the “Fed”) shifted to a more dovish stance and fueled speculation that rate cuts could be on the table in 2024. Risk assets seized on this pivot and staged a furious rally. Equities put on a “light show” reminiscent of the moonshot of later 2020 then driven by trillions of Covid relief money. Fixed Income also participated as hopes were high that inflation was vanquished and that a redux of the 1970s rate cycle would not be repeated. Not surprisingly, Alternative Investments (“Alternatives”) lagged as risk managed approaches or strategies lacking significant beta received punitive treatment by investors. Economic growth and unemployment have yet to show the effects of the steep rise in rates of the past 21 months while inflation data has fallen from its highs but is now flattening out at levels still above the desired 2% range. In our view, the market sentiment seems to be declaring that the war on inflation has been won, central banks are operating with the skill of neurosurgeons not lumberjacks, and the money pumps of the 2010s could and should be turned back on again. To those who believe monetary policies take a while to work through the system and aren’t quite as sold on the skills of central bankers, it might evoke images of President George W. Bush standing on the aircraft carrier USS Abraham Lincoln in 2003 against a backdrop with a sign declaring “Mission Accomplished”.
To view the entire article, click here.
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| Handicapping the Odds for a 2024 Recession and Upcoming Elections |
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Posted Under: Podcast |
In this episode, Ryan speaks with Bob Stein, Deputy Chief Economist at First Trust about why a US recession didn’t materialize in 2023, why it may still be coming in 2024, and implications for the upcoming elections in November.
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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.
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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.
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