Vanguard

Best Blogs of the Week #268

Posted by Anu Heda on May 22, 2017, in Best Blogs of the Week , tagged with ,

(Look below for a highly indicative price-to-book chart.)

Two posts this week capturing basic considerations about valuation: one for equities and one for bonds.

SSgA – Charting the Market: With Global Stocks at All-Time Highs, Where is Value Emerging? – It shows emerging market (EM) equities are the only regional equity gauge trading below their historical 10-year average based on P/B, while the US is trading at its 10-year high—although within the US there are opportunities for value, namely in financials.

Vanguard – Rates change, but the role of bonds doesn’t – Barring default, you can be certain of getting income until the bonds mature. It’s that income that drives returns for patient bond investors who resist the urge to jump in and out of the market.

Price

 

massive

ETF Issuers and the Missed Education Opportunity

Posted by Anu Heda on Feb 20, 2017, in Thoughts , tagged with , , ,

In January, Ignites published a piece titled “AQR Second to Vanguard in Active Flows” (subscription required). The primary points orbit active fund flows. What caught my eye was a link to 2016 passive and active fund flows from Morningstar. From their data, only 6% of passive ETF fund flows ($31.5B) went to issuers outside the top five (Vanguard, BlackRock, SSgA, Fidelity, and DFA). That means 120 ETF issuers split $31.5B (issuer list via etfdb). Seems like a massive issuer group sharing a small slice of the ETF flow pie. What types of products do these issuers provide?

To learn more, I sifted through issuer lists and AUM data. Many of the issuers offer leveraged or inverse ETFs (Direxion, ProFunds) while others have thematic ETFs (GlobalX, VelocityShares). To focus my research, I searched for ETFs with investment strategies classified as “alternatives.” Here’s a list of the top 25 alternatives ETFs (image to the right). Only one comes from BlackRock, SSgA, or Vanguard (it’s from SSgA). To support alternative products, issuers need to educate prospective buyers. That’s basic communication strategy. massiveSo, I studied the Web sites of the four firms with the 5 largest alternative ETFs: 2 from IndexIQ (now part of New York Life by way of MainStay), WisdomTree, First Trust, and Hull Capital. None of them highlight education on their homepages or product profiles. Rather, they model their sites off of traditional active managers with promotions of thought leadership (2017 Outlook, anyone?), product, and firm.

I think that’s a massive mistake. Focus on education by answering: what’s an alternative ETF? why should you care? how does it precisely fit into an asset allocation plan?

 

Industry Viewpoints: Creating an Effective Blog

Posted by Anu Heda on Dec 27, 2016, in Best Blogs of the Week, Thoughts , tagged with , ,

Last month I was fortunate to present thoughts and ideas on industry blogs to 20+ marketers at a break-out session of PAICR‘s annual meeting. Obviously, writing the “Best Blogs of the Week” column for five years informed my point of view. And so much has changed in these five years. Two quick examples of change; first, when I started there were 6 asset managers with blogs; now there are over 40. Second, five years ago most blog posts were authored by “admin” with no graphs, charts, or tables; now that would be unconscionable.

The hour-long session was interactive and engaging. I appreciated the high volume of questions and even some attendees offering answers. Here are three notable takeaways, from the attendees. 

  1. “Blogs are not serious.” – This is a message one CEO said to his marketing team (yes, in 2016). Some firms will need generational change at the top echelons of management for this attitude to change. Apparently showcasing BlackRock, Vanguard, and SSgA as firms maintaining vigorous blogs isn’t sufficient anecdotal evidence.
  2. “Our blog is our content engine.” – This came from a firm with a high-volume blog in reference to their content syndication program. The Marketer made reference to the blog as central to all social and e-mail campaign efforts.
  3. “Three years in; we still don’t feel efficient [in creating posts].” – This message had over half the room nodding heads. Some firms leverage outsourced writers while others have in-house staff partnered with investment professionals. In both cases (and situations in-between) there’s a sense that too much time and effort goes into each post.

So while the industry has grown to use blogs in unbelievable (to five years ago) ways, I believe we’ll see more firms introduce blogs and currently blogging firms try to become more efficient.

 

 

Gaudi!

Best Blogs of the Week #248

Posted by Anu Heda on Oct 31, 2016, in Best Blogs of the Week , tagged with , , ,

1 election post. That is all I will bring you. Promise. Overall here are the four most engaging posts from the last three weeks.

Columbia Threedneedle – Election 2016: Lifting the cloud of uncertainty – Changes to tax policies are likely regardless of who wins in November. But it’s questionable how much change can actually be effected considering an expected divided government even if Trump wins.

DistributionsJPMorgan – Fatter tails and endogenous risk – Although endogenous risks are difficult to quantify, there are ways to recognize and mitigate them. Analysis of flow data and correlation can provide insight into crowding and cross asset dynamics.  Stress testing can help quantify potential tail losses, and hedging via non-linear products such as options can help protect against the risks.

Loomis Sayles – Global Growth Themes and Forecast (Infographic) – We’re in a “lower for longer” bond yield environment as inflation in advanced economies decelerates and major central banks—the Bank of England, European Central Bank and Bank of Japan—pursue quantitative easing (QE).

Vanguard – Good grief! They’re commoditizing index investing again – While it may be tempting to think that the same application of technology can displace the human element of running an index fund, we have not seen that disruption and probably never will. Indeed, people remain one of the most critical differences across providers.

 

Best Blogs of the Week #247

Posted by Anu Heda on Oct 03, 2016, in Best Blogs of the Week , tagged with ,

Two posts this week featuring investing timeliness from industry titans.

BlackRock – Bonds that have seen the most traffic lately – The first thing that jumps out at me from this Bloomberg data is the continued search for yield.

Vanguard – When the worst of times is the best of times  – To help you explain the challenges of timing the market to clients, we looked at the 20 worst and 20 best days from 1990 through 2015. What we found (see figure below) is that all but one of the worst days were within a month of at least one extreme up day.

 

Timeliness - Vanguard