Wall Street Journal: Leveraged ETFs Blamed For Late Trading Surge
Traders are blaming leveraged exchange-traded funds for huge fluctuations in the last hour of activity on stock exchanges, reports a trio of Wall Street Journal reporters.
The article points to outside data that shows a big uptick in last minute trading recently. "In November, an average 26.2% of trading volume in the stocks in the Standard & Poor's 500-stock index took place in the final hour and 17.1% in the last 30 minutes, according to data from Credit Suisse," the journalists wrote.
To see how leveraged ETFs are being tied to the issue, you can find the story here.
Wall Street Journal: Asset Allocation Divided In Thirds
As we all are well aware at this point, formulating an asset allocation plan—and sticking to it—during a recession can be quite tricky.
But Tom Lauricella of the Wall Street Journal talks to advisors who break the process into three distinct views: short-, mid- and long-term investment horizons. In the shorter term, the suggestion is to more actively rebalance; in the midterm, to guard against active management under-performing their respective benchmarks; and in the longer term, buy stocks cheap.
Also mentioned is the use of ProShares ETFs that take short positions and passively managed portfolios from Dimensional Funds Advisors. You can read the story here.
Wall Street Journal: Deutsche Group Loses $1 Billion On Bad Bond Bet
Not to load up on Wall Street Journal stories, but the paper was reporting Sunday night about bond managers at a unit of Deutsche Bank making bets in the corporate bonds market that has resulted in huge losses.
The story came up through our coverage of exchange-traded notes, of which Deutsche Bank is a major player. Since ETNs carry counterparty risk as basically unsecured debt of the issuing financial institution, this might be an article worthy of noting.
Respective of any interest by ETN investors, this piece is a fascinating look at how active management can go bad—even with the best, and seemingly most enterprising, of intentions. You can read the story here.
InvestmentNews: The Next Big Thing?
The fund industry is out in force marketing the next big thing in high-cost packages. They're calling these multi-asset funds and they apparently invest in a little of everything. According to this InvestmentNews article, these are more flexible than current flexible funds.
Although off-the-beat active funds are hardly new, PIMCO and at least one other fund company planning to take a bigger role in the ETF marketplace are involved with these multi-asset funds. That might mean a low-cost version, or index, will be coming down the pike in the not-so-distant future.
You can read the story here.
Credit Suisse ETN website is down for repairs.
A new index from Dow Jones and RAFI addresses a real issue.
One native of Scotland argues that because Scotland’s not broken, there’s nothing to fix.
If CalPERS is taking hedgies out, ETFs may be coming back in.