Monday morning briefing: Spotlight on yields
No stone is being left unturned in the exchange-traded fund (“ETF”) industry. ETF manufacturers have launched unique mandates, capturing different parts of the old and new economies. From e-sports to Bitcoin, no sector or asset class is off limits. North of the border, three Bitcoin ETFs have already been launched. Next one up appears to be an Ethereum ETF.
In the U.S., four firms currently have applications with the Securities and Exchange Commission (“SEC”) to launch Bitcoin ETFs. For investors looking for some exposure to something a little larger than earth, Harvest Portfolios has filed a preliminary prospectus to launch the Harvest Space Innovation Index ETF in Canada. Finally, for anyone with a fear of missing out (i.e., “FOMO”), there might be an ETF for that. An application has been filed with the SEC to launch a FOMO ETF from the Collaborative Investment Series Trust.
Economic/industry news
The Fed holds its target range steady at 0.00% to 0.25%: Fed sees stronger economy and higher inflation, but no rate hikes
Canada’s inflation rate 1.1% in February: Canada inflation inches higher to 1.1% on rising gas prices
Canadian retail sales drop in January: Retail sales fall 1.1 per cent in January to $52.5B: Statistics Canada
CFA Institute launches new ESG program: CFA Institute launches certificate in ESG investing
Rising interest rates could negatively impact asset prices: This is the ‘biggest risk of all’ for investors, according to Howard Marks
Inflation now biggest concern among investors: COVID-19 no longer investors’ top tail risk: BofA
Reasons for hope
A return to the office may happen sooner rather than later: At long last, Wall Street sees path to return to the office
Many Canadians opened their own business: Surprise burst of entrepreneurship thrives year of grim economic fallout
Helping seniors book their vaccination appointments: Pennsylvania TSA officer praised for making COVID-19 vaccine appointments for local seniors
Adapting your business
Some tips on how advisors can reflect on their accomplishments: Look back on your accomplishments
The pandemic brought lasting change to the wealth management industry: Five ways COVID-19 has permanently changed wealth management
Wealthy are looking for consistency: The need for consistent consistency with UHNW investors
Stock options help employee retention and productivity: Stock options driving loyalty, hard work among employees: study
Raising compliance budgets address working from home: Institutional investors boost compliance budgets amid work-from-home trend
Chart of the week: Spotlight on yields
The yield on the 10-year U.S. Treasury bond recently surpassed the dividend yield on the S&P 500 Index. This is the first time this has happened since the start of the pandemic, as yields plummeted along with stocks, driving up the dividend yield of the broader index.
As yields keep rising on expectations of higher inflation and a swift recovery, the gap between the two are widening. Given the relative safety of U.S. government bonds, this could make equities a little less attractive, potentially resulting in even more volatile conditions. On the other hand, business activity is picking up, which may be constructive for profitability and dividend payments, which could be a key theme to watch in the months to come. Let us know what you think.
Used with permission of Bloomberg Finance L.P.
News and notes (U.S.)
Hedge funds post positive performance in February: Hedge funds return 2.68 per cent in February
Health care industry looking to private equity for capital: Private equity’s presence in health care is growing
Many companies trying to launch the first Bitcoin ETF in the U.S.: Wall Street steps up Bitcoin ETF push with SEC verdict unknown
Is this the springboard for more PE firms in professional sports?: LeBron James’ Red Sox deal points to private equity’s future as a pro sports owner
News and notes (Canada)
CI purchases another RIA firm: CI acquires Atlanta-based RIA Brightworth
Canada’s population growth slowed in 2020 in response to the pandemic: Population growth slowed to World War I levels in 2020: StatsCan
Canada and Germany partnering to achieve shared energy goals: Canada strengthens energy partnership with Germany
IMF praises the federal government’s response to the pandemic, but there are gaps that must be tightened: Ottawa should review employment insurance as economy recovers: IMF