The last few years have been difficult for bond investors. At first, interest rates were below historical averages, creating a difficult search for yield. Then the environment changed drastically in 2022 as the Federal Reserve implemented a series of interest rate hikes causing bond prices to fall sharply. Amid this volatility, a growing number of investors have broadened their bond horizons and added floating rate debt securities to their portfolios to increase the diversification of their fixed income holdings.

Unlike most traditional fixed income investments, floating rate securities offer a return that rises and falls with a benchmark interest rate, such as SOFR (Secured Overnight Financing Rate). Because the coupon “floats” above the prevailing interest rate, floating rate bond prices are less sensitive to changes in the prevailing interest rate.

Related: CLO prices rise slightly, attracting investors hoping to bottom out

Although floating-rate debt has been around for decades, its availability is limited in the United States, and high-quality (A-rated or better) security choices are even rarer. For many years, investors seeking floating rate exposure have favored the leveraged loan market, but because it is a sub-investment grade market, the benefits variable rate exposure are achieved at the expense of lower credit quality. Given this trade-off and growing economic uncertainty, investors are increasingly turning to another type of variable-rate debt: secured loan obligations (CLOs), as around 80% of CLOs have a credit rating of credit from A to AAA.

For nearly three decades, CLOs were largely only available to institutional investors, however, in 2020 the first ETF CLOs were launched, giving every investor access to the benefits of this asset class. Because of this better accessibility and a yield premium over other corporate credit instruments, the global market for CLOs has grown to over $1 trillion, despite the challenges of having a name that sounds a lot like the Collateralized Debt Securities (CDOs), a financial instrument widely known to have played a leading role in the global financial crisis of 2007-2008.

To be clear, CLOs are not the same as CDOs.

CDOs typically consisted of BBB-rated subprime mortgage securities first created in 2000. As a result, rating agency models for these mortgages were poorly calibrated since mortgages had only been around for a few years, and before the Global Financial Crisis, the U.S. real estate market had not seen a year of nationally negative appreciation since the Great Depression of the 1930s.

As mortgage holders began to default on their loans, including some within 90 days of mortgage origination, mortgage originators began to fail, housing prices soared, and the market of CDOs quickly collapsed.

Unlike CDOs, which were largely made up of consumer debt such as mortgages, car loans and credit cards, CLOs are securitized portfolios of commercial bank loans, which are issued to small businesses that do not generally have no access to bond markets. And rating agency models for corporate credit date back over 100 years, providing much more data for better calibration. Notably, not a single AAA CLO has defaulted since the inception of the asset class 30 years ago, a period that includes the global financial crisis and the economic disruption created by COVID-19. Throughout these extraordinary events, which had a significant impact on financial markets around the world, CLOs behaved as expected.

In fact, the two busiest months for AAA CLO trading were March 2020, a month marked by one of the most dramatic stock market declines in history (the Dow Jones Industrial Average fell about 26% in four trading days), and March 2022, when the Fed announced the long-awaited first interest rate hike, and fixed income assets declined overall. During the two months, the liquidity of many segments of the bond markets was negatively affected, but this was not the case for AAA CLOs. The liquidity of AAA CLOs increased during these months, demonstrating the resilience of the asset class.

In light of this track record, the risk-return profile and low correlation of other fixed income investments, including US Treasuries and the benchmark Bloomberg US Aggregate Bond Index, the recent surge in demand investors for CLOs is perhaps not too surprising. But with the Federal Reserve acting aggressively to reduce inflation by raising the fed funds rate, and most observers anticipating further hikes, many investors are taking a closer look at the performance of CLOs in times of rising rates. .

Prior to 2022, the most recent rate hikes occurred between December 2017 and late November 2018, when the Fed raised interest rates by 1.25%. During this period, the Bloomberg US Aggregate Bond Index lost 1.62%, the shorter duration 1-3 year Bloomberg US Government/Credit Index gained 0.82% and the JP Morgan AAA CLO increased by 2.55%.

Dating back a few more years to the previous tightening cycle, which occurred from December 2015 to November 2018 when the Fed raised rates by 2.25%, the JP Morgan AAA CLO index rose 8.63%, more than three times the yield of the Bloomberg 1-3. year US Government/Credit Index.

While this type of capital appreciation during a period of rising interest rates may seem counterintuitive, such is the nature of floating rate securities. And for those willing to look past the pitfalls of having a name that is often confused with secured debt securities, CLOs can be an attractive means of portfolio diversification in these volatile markets.

John Kerschner is Head of US Securitized Products at Janus Henderson Investors

AUD/USD price rose after relatively weak Chinese economic data. According to the National Bureau of Statistics (NBS), retail sales fell 0.5% in October, while industrial production and fixed asset investment fell 5.0% and 5.8%, respectively.

Bearish view

• Sell ​​the AUD/USD pair and set a take-profit at 0.6700.
• Add a stop-loss at 0.6900.
• Lead time: 1-2 days.

Bullish view

• Set a buy-stop at 0.6820 and a take-profit at 0.6920.
• Add a stop-loss at 0.6725.

The rise in AUD/USD prices accelerated after another round of positive US inflation data and the meeting between Xi Jinping and Anthony Albanese. It hit a high of 0.6793, the highest level since September.

Meeting Xi Jinping and Albanians

AUD/USD welcomed the meeting between Australian and Chinese leaders at the G20 meeting in Indonesia. The meeting was aimed at easing tensions between the two countries, which deal in goods worth billions of dollars each year.

This crisis began when Australia joined other Western countries in banning Huawei from its 5G network in 2020. It accelerated when Australia joined other Western countries in seeking responses to the Covid-19 pandemic.

In the aftermath, China announced a series of sanctions and tariffs on some of Australia’s main exports like wine, coal, beef, lamb and iron ore. Consequently, the AUD/USD price rallied as investors predicted that these talks would lead to a reset in the relationship.

The two leaders agreed on the need to continue the dialogue in the future. However, it is still unclear whether the two countries will resume normal trade relations in the short term.

AUD/USD price rose after relatively weak Chinese economic data. According to the National Bureau of Statistics (NBS), retail sales fell 0.5% in October, while industrial production and fixed asset investment fell 5.0% and 5.8%, respectively.

The pair also rose after another round of US inflation data. According to the Bureau of Labor Statistics (BLS), the producer price index rose from 8.4% in September to 8.0% in October. The Core PPI, which excludes volatile items, fell from 7.1% to 6.7%.

The figures came a week after the United States released encouraging data on consumer inflation. Therefore, most analysts expect the Federal Reserve to begin its pivot at the next meeting.

AUD/USD Forecast

The AUD/USD price has been in a strong uptrend over the past few weeks. It accelerated after the price broke above the important resistance level at 0.6518, the neckline of the reverse head and shoulders pattern.

The pair also rallied above the 25- and 50-day moving averages, while the Stochastic oscillator moved above the overbought level. The RSI has also reached the overbought point.

Therefore, the pair is likely to have a brief short-term pullback on profit taking. This pullback could take it down to around 0.6600.

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There has been speculation in financial circles as to whether the next decade has the potential to look like the 1970s.

Some of the factors that boosted the national and global economy then seem to have parallels with today. For those who remember the 70s and early 80s, it was a time characterized by an energy crisis fermented by the oil cartel, Opec.

This resulted in the rationing of gasoline via “car-free days”, an inflationary and wage spiral accompanied by an increase in interest rates. It was a period of interventionist government policy which included freezing wages and prices in the early 1980s in an attempt to control inflation.

These economic pressures ultimately led to two significant structural changes in the New Zealand economy; the floating of the New Zealand dollar in 1985 and the introduction of the Reserve Bank Act of 1989, which shielded the Bank from direct political interference.

As Mark Twain is famous for saying, “History never repeats itself, but it often rhymes”. Although I am not an economist, I suspect that there are lessons to be learned from this period.

New Zealand’s inflation rate may have peaked this year at 7.3% per annum and may be falling, but the 1970s showed that imported inflation, combined with inflation of national salaries, is very difficult to control.

During the 1970s, the average inflation rate was just over 12% per year. As a result, $100 at the start of the 1970s only had the purchasing power of $30 at the end of the decade. Some assets provide a natural hedge against inflation while other investments perform poorly by failing to keep pace.

During the 1970s, the worst performing asset class was fixed interest (meaning both term deposits and bonds). Funds invested in fixed interest have actually lost value relative to inflation.

The best performing asset class of this decade was commodities. Commodities are the raw materials used to create the products that consumers buy. Commodities vary widely and range from grain, gold, beef to oil and natural gas.

During the 1970s, a general commodity index rose by more than 20% per year. Some stocks offer good inflation protection. Stocks of infrastructure companies (such as power companies) tend to do well because they have the ability to increase their prices with inflation and the value of their physical assets. i.e. dams and power plants, increase as inflation increases their replacement cost.

Other stocks may struggle in a high inflation environment if they are struggling to pass on their rising costs and their profit margins are under pressure.

During this decade, real estate kept pace with inflation but did not rise sharply above inflation. The current government policy and the desire to increase supply are two other factors likely to limit real estate growth for the coming period. What lessons can we apply today? :

1. Be more intentional in your investment strategy. Since the beginning of this year, equity markets have been strongly negative. For investors who have supplemented their exposure to equities with exposure to commodities, their situation improves considerably. This is just one example of an intentional, forward-looking asset allocation decision based on the changing investment environment rather than passively relying on the past environment.

2. Don’t bet on just one asset class. Although I have a vision of the future development, I could easily be wrong. This is why I strongly caution against investing in a single asset class. If you own your own business, you might be forced to do this for a while, but when you can diversify away from concentrated investment risk, you should take this step. A “double or quit” approach may be acceptable to the casino, but is not acceptable to your retirement capital.

3. The perception of security can be an illusion. In an uncertain world, it can be tempting to take less risk by avoiding investments whose principal value varies according to market conditions. The price swing that some assets experience can be uncomfortable, but that is precisely what is likely to help you weather inflation. Volatility is the price you pay for inflation protection. I note that several mortgage funds have recently stepped up their advertising with what looks like attractive yields. However, I question their ability to outperform inflation over the longer term and would point out that with rising interest rates, we are likely to enter a period of increasing mortgage defaults.

I mentioned the two economic changes, the Reserve Bank Act and our floating exchange rate, which were implemented in response to the experience of the 1970s.

Hopefully, these two changes will help ensure that the extremes of the 70s don’t fully play out in the next decade. However, you must prepare for a different environment than you have experienced in recent years.

— Peter Ashworth is a director of New Zealand Funds Management Limited and a financial adviser based in Dunedin. The opinions expressed in this column are his own and not necessarily those of his employer. His statements are available on request and free of charge.

Arizona State Retirement System, Phoenix, raised its public equity and credit targets following an asset-liability study.

The board of the $48.6 billion pension fund approved the changes at its September 30 meeting, the minutes of the meeting recently released.

The pension fund has a policy of conducting such studies every three to five years with the assistance of NEPC, its general investment adviser.

The board approved increasing the public equity target to 44% from 40% and the credit target to 23% from 20%, while reducing the real estate targets to 17% from 20% and interest rate sensitive assets at 6% from 10% and maintaining the private equity target at 10%.

The minutes of the meeting did not provide further information on the reasons for the specific changes. The NEPC, in a presentation attached to the March 25 board meeting documents, had said that an “argument can be made that ASRS’ 12-year experience in implementing private credit has consistently provided higher returns and lower volatility than the benchmark, justifying the change in capital market assumptions for this asset class.”

As of June 30, the actual allocation was 23.5% credit, 21.4% domestic equity, 19.8% real estate, 14.5% international equity, 12.7% private equity and 6.9% interest rate sensitive fixed income securities and 1.2% cash.

Spokesman David Cannella could not immediately be reached for further information.

For bond traders, the upward drift in Treasury yields was not that hard to predict. It’s the short-term fluctuations that are vexing.

The world’s largest bond market is in the grip of its longest period of sustained volatility since the start of the financial crisis in 2007, marking a sharp break with the stability seen during the long period of historically low interest rates. And the uncertainty that fuels it doesn’t seem likely to fade any time soon: inflation is still at its highest level in four decades, the Federal Reserve is raising interest rates aggressively and Wall Street has difficult to assess how well a still resilient economy will hold up.

The result is that fund managers see no respite from the turmoil.

“Bond market volatility will remain high for the next six to 12 months,” said Anwiti Bahuguna, portfolio manager and head of multi-asset strategy at Columbia Threadneedle. She said the Fed could pause rate hikes next year only to resume if the economy is stronger than expected.

Sustained volatility pushed some major buyers away, draining liquidity from a market struggling with the worst annual loss since at least the early 1970s. Analysts at Bank of America Corp. warned that Treasury market liquidity – or the ease with which bonds are traded – has deteriorated to its worst since the March 2020 Covid crash, leaving it “fragile and vulnerable to shocks”. After falling from June to early August, Treasury yields rebounded as a key measure of inflation jumped in September to its highest level since 1982 and employment remained strong. Those numbers and comments from Fed officials have led the market to expect the Fed to push its rate to a high near 5% early next year, from a range of 3 to 3.25. % currently.

Major data releases for the coming week are unlikely to change this outlook. The Commerce Department is expected to report that an inflation indicator, the Personal Consumption Expenditure Index, accelerated to an annual rate of 6.3% in September while the economy grew 2.1% in the third quarter, rebounding from the decline of the previous three months. Meanwhile, central bank officials will be in their self-imposed period of calm ahead of their November meeting.

The widespread expectation that the Fed will adopt its fourth consecutive 0.75 percentage point on November 2 has indeed raised questions about the direction of monetary policy next year. There is still considerable debate about where the Fed’s key rate will eventually hit and whether it will drag the economy into a recession, especially given the growing risks of a global slowdown as central banks around the world whole are tightening together.

The uncertainty was underscored on Friday, when two-year Treasury yields rose, falling as much as 16 basis points after the Wall Street Journal reported the Fed would likely discuss plans to potentially slow the pace of its rate hikes after next month.

“If they stop after inflation drops and the economy slows, market volatility will decrease,” said Steve Bartolini, fixed income portfolio manager at T. Rowe Price. “The day the Fed takes a break, volatility should drop, but we’re unlikely to return to the low-volume regime of the 2010s.”

While the high volatility may provide buying opportunities, any effort to bottom out has been thwarted as yields have risen. Additionally, investors are also aware that recessions and financial crises that have followed excessive monetary tightening in the past have been associated with notable spikes in volatility.

That potentially means more pain for leveraged financial investments that have taken off in a world of low inflation, rates and volatility, said Bob Miller of BlackRock Inc., head of fundamental fixed income for the Americas. But for other investors “there will be opportunities to take advantage of market dislocations and build fixed income portfolios with attractive yields above 5%.”

Still, he expects the market to continue to be rocked by price swings. “Implied volatility is clearly the highest since 1987 outside of the global financial crisis,” Miller said. “We’re not going back to the experience of the previous decade,” he said, “anytime soon.”

What to watch

Economic calendar

Oct. 24: Chicago Fed Activity Index; S&P Global Manufacturing and Services PMIs

Oct. 25: FHFA house price index; Conference Board Consumer Confidence; Richmond Fed Manufacturing Index

Oct. 26: MBA mortgage applications; trade balance; wholesale and retail inventory; new home sales

Oct. 27: GDP; durable goods orders; applications for unemployment benefits; Kansas City Fed Manufacturing Index

Oct. 28: employment cost index; personal income and expenses; pending home sales; U. of Mich Inflation Sentiment and Expectations

Fed calendar: blackout period until November 1-2 meeting

Auction schedule:

October 24: 13 and 26 week invoices

October 25: 2-year tickets

October 26: 5-year bonds, 2-year floating rate bonds, 17-week bonds

October 27: 7-year tickets, 4-week and 8-week tickets

Thesis

Thornburg Income Builder Opportunities Trust (NASDAQ: TBLD) is a new CEF in the Thornburg family of funds. The vehicle is new, having been floated in July 2021. The fund pursues a multi-asset strategy:

The Trust will invest at least 80% of its assets under management, directly or indirectly, in a wide range of income-producing securities. The Trust will invest in both equity and debt securities of companies located in the United States and around the world. The Trust may invest in companies of any market capitalization and may invest in US and non-US countries, including up to 20% of its assets under management at the time of investment in equity and debt securities of companies of Emerging Markets. The Trust’s global equity allocation is expected to represent 75% of assets under management and may vary over time between 50% and 90% of assets under management. The Trust’s overall debt allocation is expected to represent 25% of assets under management and may vary over time between 10% and 50% of assets under management.

Currently, the CEF currently owns approximately 70% stocks and 30% bonds, but it has the mandate and the flexibility to change this allocation. In addition to outright assets, the fund features a nice, interesting overlay of written calls:

The Trust’s options strategy aims to generate current income from option premiums and to enhance its risk-adjusted returns. The notional amount of the options strategy will be approximately 10% to 40% of the Trust’s assets under management.

We like this approach because writing covered calls can act as a buffer in bear markets. It will be interesting to see how the fund allocates this option overlay when the market turns – i.e. in rising markets, writing covered calls can significantly reduce the upside of a portfolio. . The fund is not perpetual but has a term structure:

The Trust does not intend to use leverage and has a term of 12 years.

Since the vehicle has just been listed on the stock market, we are not very concerned about its original maturity date. Like other equity CEFs, the vehicle currently has no leverage.

The fund is new and has lost value since its issuance, given its valuation near the top of the market. However, we like its build and approach. Incorporating an options overlay into a multi-asset structure is a good risk management tool and profit generator in a bear market. The fund is working to build a balance sheet, but the ingredients are there for a strong future. Although technology is currently overweight on the equity side, the vehicle chooses names with low P/E ratios.

Assets

The CEF currently owns around 70% stocks and 30% bonds:

On the equity side, the fund is overweight technology:

Although technology is a sore point at the moment, the fund seems to be doing a good job picking low P/E companies:

At a sub-10x P/E ratio, it feels like a very conservative build. Additionally, we like that the fund only has 58 holdings. When we look at the top fund concentrations, we like what we see:

The fund holds larger positions in energy and materials companies, which have held up better in the current environment. In addition, another advantageous aspect is the written options component:

Approximately 11.5% of the portfolio has written call options. This is a conservative strategy that generates cash in a bear market. As the market sells off, the written calls expire worthless and the fund pockets the premium. It would be interesting to see what the fund will do once the market turns – this strategy can cap the upside in a sustained rise in stock prices. However, we are a bit far from it at the moment.

On the bond side, the fund invests mainly in high yield securities:

We can therefore say that the main risk factors on the fixed income side are credit spreads rather than rates. The bond portfolio is also quite compact, with the fund providing fairly detailed statistics:

We can see that the vehicle only contains 111 names, with a fairly advanced effective expiration date of only 6.2 years.

Performance

The fund has been down since the start of the year:

The vehicle is down more than the S&P 500 since the start of the year due to the widening of the net asset value discount, but its performance is in line with the movement of the BlackRock Capital Allocation Trust (BCAT).

Premium/Rebate to NAV

During its brief existence, the fund has always traded at a discount:

That’s to be expected of a new CEF, especially a vehicle that was IPO at the top of the market. If an investor looks at the historical performance of CEF, they will notice a funny commonality – they all tend to lose money in the first 1-2 years. A CEF usually costs $20/share, but usually ends up going down. Not all CEFs are created equal, of course, but since inception there has been some pressure on the management team to allocate capital regardless of timing, which may not be optimal for the end investor. .

Examining very well-established managers such as PIMCO or BlackRock (BLK), particularly on the fixed income side, provides good insight into this nascent vehicle behavior. Again, our view here is that the manager is under significant pressure to make their cash work to justify the fees charged and in doing so they are investing at sub-optimal times.

Distributions

The fund appears to have a managed distribution plan, although we couldn’t find any detailed description in the annual and semi-annual reports regarding this feature:

Note that the same amount is paid monthly, although the fund does not currently generate a 9.5% return through its assets. Instinctive control is quite simple – the fund contains 70% stocks that generated losses in 2022 and a small return of 1.5% to 2%. The bond portion, which represents 30% of the fund, generates a coupon of approximately 6.5%. The calculations do not add up, so we believe that more than 50% of current distributions are ROC. The fund does not publicly provide a statement under Section 19a to be presented.

Conclusion

TBLD is a new multi-asset CEF. The vehicle is currently trading at a discount due to its lack of track record and underperforming holdings. We like the fund’s composition and granularity, as well as the covered call overlay feature. From a fundamental perspective, the portfolio and approach are solid, but just like other CEFs that were priced at the top of the market, TBLD was initially expected to underperform. Given its lack of performance, the fund is currently using a large amount of ROC to subsidize its 9.5% return. The fund’s year-to-date performance is largely in line with that of another multi-asset fund we’ve discussed, namely BCAT. We expect a much stronger year 2023 for the fund and want the fund to establish an identity and performance history so that insights can be extracted regarding its risk/return profile.

CHICAGO & LONDON–(BUSINESS WIRE)–Northern Trust Asset Management (NTAM), a leading global investment management firm with $1 trillion in assets under management as of June 30, 2022, today announced that Antulio Bomfim has been hired to head of Global Macro, a newly created position within its global fixed income group.

The expansion of NTAM’s global fixed income team, responsible for $470 billion in fixed income assets under management, is designed to enhance capabilities as the team responds to the changing needs of fixed income investors around the world.

Bomfim joins NTAM with nearly 30 years of experience in roles within investment management and the Federal Reserve Board System. Most recently, he served as Special Advisor to the Fed Board as well as Special Advisor to Chairman Jerome Powell.

Previously, Bomfim was at Macroeconomic Advisers as Senior Managing Director, co-head of Monetary Policy Insights. Previously, he was a portfolio manager and co-head of interest rate strategy for OFI Institutional Asset Management, a division of Oppenheimer Funds.

A long-time advisor, consultant and award-winning author, Bomfim brings in-depth practical and theoretical knowledge of economics and financial markets. His areas of research include asset pricing, monetary policy, macroeconomics, investments and financial markets. He holds a PhD, MS, and BA in Economics from the University of Maryland, and an MS in Mathematical Finance from the University of Oxford.

In his newly created role within NTAM’s Global Fixed Income Group, Bomfim has overall responsibility for overseeing the Global Macro Group, which is responsible for interest rate strategy, systematic volatility, liquidity and global systemic risk monitoring. Bomfim is also responsible for the company’s global cash management activities. He reports to Global Fixed Income Chief Investment Officer Thomas Swaney.

“As part of the Global Fixed Income team, our fundamental principle that investors should be compensated for the risk they take is manifested in our management of four key risks – interest rate, volatility, prepayment and credit” , Swaney said. “Antulio’s expertise is well suited to leading our multidisciplinary Global Macro Fixed Income team.”

About Northern Trust Asset Management

Northern Trust Asset Management is a global investment manager that helps investors navigate changing market environments, so they can confidently achieve their long-term goals. Supporting US$1 trillion in investor assets as of June 30, 2022, we understand investing ultimately serves a greater purpose and believe investors should be compensated for the risks they take. – in all market environments and all investment strategies. That’s why we combine sound capital markets research, expert portfolio construction and comprehensive risk management to design innovative and effective solutions that deliver targeted investment results. As committed contributors to our communities, we consider it a great privilege to serve our investors and our communities with integrity, respect and transparency.

Northern Trust Asset Management is comprised of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, KK, NT Global Advisors, Inc., 50 South Capital Advisors, LLC , Belvedere Advisors LLC, Northern Trust Asset Management Australia Pty Ltd and the investment staff of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking services to businesses, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 23 US states and Washington, DC, and 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2022, Northern Trust had assets under custody/administration of US$13.7 trillion and assets under management of US$1.3 trillion. For over 130 years, Northern Trust has distinguished itself as an industry leader for its exceptional service, financial expertise, integrity and innovation. Visit us at northtrust.com. follow us on Twitter @NorthernTrust or Northern Trust Corporation on LinkedIn.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 USA, incorporated with limited liability in the USA Global legal and regulatory information can be found at https://www.northerntrust.com/terms -and-conditions.

Bitcoin
BTC
Ethereum and other top ten cryptocurrencies have bottomed out after a huge selloff this year that could turn into a “panic”.

Subscribe Now to Forbes CryptoAsset & Blockchain Advisor and successfully navigate the $2 trillion bitcoin and crypto market crash

The price of bitcoin has fallen 70% since hitting a high of nearly $70,000 per bitcoin in November last year, collapsing in the face of ‘sharp’ interest rate hikes from the Reserve federal. The crash wiped around $2 trillion from the price of Ethereum and other top ten cryptocurrencies BNB
BNB
XPR, solana, cardano, and dogecoin (although a major US regulator released a surprise bitcoin and crypto price prediction this month).

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Now, Yassine Elmandjra, the top crypto analyst at Cathie Wood’s Ark Investment Management, has declared that bitcoin is a “$28 trillion opportunity,” based on a previous prediction that the price of bitcoin will hit $1 million per coin. 2030.

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MORE FORBESCoinbase CEO Reveals Explosive Selloff After Bitcoin, Ethereum, Crypto Price Drops $2 TrillionBy Billy Bambrough

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“When we look at bitcoin’s potential, we segment it into multiple use cases — everything from competing as a digital store of value, to a settlement network, to an insurance policy against corruption. arbitrary seizure of assets,” Elmandjra said. Bloomberg. “When you stack each use case on top of the other, you get an opportunity of around $28 trillion, which translates to over $1 million per bitcoin.”

Bitcoin proponents have argued that the cryptocurrency will eventually replace gold as the de facto global store of value and inflation hedge, with bitcoin often referred to as “digital gold” due to its fixed supply. and its decentralized nature.

ADVERTISING

This week, the bitcoin and crypto community pointed to a shock new PayPal policy that was quickly reversed and JPMorgan’s decision to cut ties with rapper Kanye West as proof of the need for “censorship-resistant money.”

“When you look at bitcoin as a strategic asset, a non-sovereign, censorship-resistant currency, competing with central banks and fiat currencies, with bitcoin supply capped at 21 million, I think there’s an arms race, especially as we move from the digital to the physical world – to be an asset independent of traditional financial systems and traditional asset classes,” Elmandjra said.

However, Ark this year sold $75 million worth of Coinbase shares, giving up its position as the crypto exchange’s third-largest shareholder. Coinbase stock tumbled along with the bitcoin and crypto market, with Coinbase chief executive Brian Armstrong revealing an explosive selloff this week.

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The technology and finance industries are still moving towards crypto adoption. Google
GOOG
this week announced it would start accepting bitcoin and some other cryptocurrencies as payment for its cloud services while Wall Street stalwart BNY Mellon joined other big banks in launching custodial services of crypto.

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MORE FORBESIt’s ‘Really the Answer’ – Kanye West, JPMorgan and PayPal Reveal ‘Bitcoin Case’By Billy Bambrough

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“If the price regains the psychological level of $20,000 with substantial trading volume in the coming days, bitcoin could test $23,000 next week,” Yuya Hasegawa, crypto market analyst at Bitbank, said in comments. by e-mail.

Crypto and the stock market were boosted this week by data that showed the US consumer price index (CPI) rose at an annual rate of 8.2% in September, from an estimated rise of 8 .1%.

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“It had been another tough week for the stock market up until the CPI, so the rebound will likely trigger an unwinding of recent risk aversion sentiment, which could have a positive effect on bitcoin’s price,” he said. Hasegawa said, adding, “Unlike last month when the market expected inflation to slow down, the market priced in a shock this time around, so although the price initially fell, it doesn’t wasn’t deep enough to cause panic.”

In September, Western Asset Municipal High Income Fund Inc. (NYSE: MHF) saw a significant drop in the number of short positions held in investor accounts. There was total short interest of 3,800 shares as of September 30, down 55.8% from 8,600 shares as of September 15, when there was total short interest of 3,800 shares. Based on an average daily trading volume of 45,500 shares, the day-to-cover ratio reached its current level of 0.1 day. This is the number she arrived at.

On Thursday, investors were allowed to buy shares of Western Asset Municipal High Income Fund for $6.25 per share. The Western Asset Municipal High Income Fund hit a 52-week low at $6.19, while it hit a 52-week high at $8.91. Over the past 50 trading days and past 200 trading days, the company’s stock price has fluctuated between $6.58 and $6.67.
As a result of recent events, institutional investors and hedge funds have increased or decreased the scope of their interests in the company. During the second quarter, Karpus Management Inc. increased the proportion of its assets invested in the Western Asset Municipal High Income Fund by 231.6%. Karpus Management Inc. now owns 502,214 shares, giving it a market capitalization of $3,300,000 after purchasing an additional 350,767 shares in the last trading quarter. In the second quarter, Lloyd Park LLC invested approximately $268,000 in the Western Asset Municipal High Income Fund to acquire an additional stake in the fund and add to the holdings it already held. During the second quarter, LPL Financial LLC successfully added an additional 17.2% of shares of Western Asset Municipal High Income Fund to its portfolio.
Following the purchase of the additional shares, LPL Financial LLC now owns a total of 20,395 shares of the company, which have a value of $134,000; this represents an increase of 3,000 shares from his previous holdings. During the second quarter, UBS Group AG successfully added an additional 9.4% of shares of Western Asset Municipal High Income Fund to its portfolio. Following the acquisition of 3,770 additional shares during the period in question, UBS Group AG now owns a total of 44,040 shares of the financial services provider. All of these actions total $289,000. Additionally, the purchase of Western Asset Municipal High Income Fund by Quad Cities Investment Group LLC for $133,000 was completed during the second quarter. Institutions hold 17.58% of the total number of shares in the company.
Additionally, the company announced the payment of a standard dividend, which is expected to occur on the first Thursday of the month, December 1. Shareholders who are still of record as of November 22 will be eligible to receive a dividend payment of $0.0198 per share. For this reason, the dividend yield is 3.70% every quarter and the dividend payout is only $0.24 per year. The ex-dividend date for this dividend is set for November 21 and Monday of this week is when it occurs.

Western Asset Municipal High-Income Vehicle Inc. Mutual Fund is a closed-end fund that invests in fixed-income securities. Legg Mason Partners Fund Advisor, LLC is in charge of managing this fund, which is a type of mutual fund known as a closed-end fund. In addition, Western Asset Management Company actively participates in its management. The majority of the fund’s assets are invested in the fixed income securities markets found in the United States. Its principal investments are in municipal debt securities issued by state and local governments in the United States and the United States federal government. These instruments generally have maturities ranging from medium to long term.

Unlimited uses machine learning to replicate raw hedge fund returns across multiple alternative strategies in a tax-efficient, low-cost ETF

NEW YORK, Oct. 11, 2022 (GLOBE NEWSWIRE) — Bob Elliott, former member of the investment committee of Bridgewater Associates, today announced the launch of Unlimited, a new investment company specifically designed to give everyone investors gain exposure to the alpha-generating potential of alternative investment strategies without the high fees and adverse tax consequences. Alongside the launch, the company announced its first product, the ETF Unlimited HFND Multi-Strategy Return Tracker (NYSE: “HFND”), which uses a sophisticated machine learning engine to track the gross-of-fee returns of multiple hedge funds. . clues.

Mr. Elliott is CEO and Chief Investment Officer of Unlimited. He has developed innovative hedge fund strategies for over two decades, most recently as a member of the investment committee at Bridgewater Associates, where he developed strategies across all asset classes, including several for the flagship fund Pure Alpha of the company. He is joined by Bruce McNevin, co-founder and Chief Data Scientist at Unlimited. Mr. McNevin is a professor of economics at New York University and has held various data science positions at hedge funds Clinton Group and Midway Group, as well as positions at Bank of America and BlackRock.

“Having spent many years in the hedge fund industry, we have identified that investors are either underserved by the exorbitant fees in the asset class or unable to access these proprietary strategies,” said Ms. Elliott. “With HFND, we are filling what we see as a critical gap in the market by bringing together the best people in the hedge fund industry with the democratizing structure of an ETF. Ultimately, we believe that every investor should have access to institutional-grade return potential.

Investors facing a period of high volatility and uncertainty are increasingly looking for investments that will diversify their portfolios to help them weather varying market conditions. Hedge fund strategies have historically generated significant alpha, or returns above the relevant benchmark, but that alpha is typically eaten away by high fees and inefficient tax structures. Unlimited believes HFND is designed to mitigate these costs, bringing a more sophisticated approach to hedge fund replication than has been used in an ETF to date.

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Prior to the launch of HFND, hedge fund-mimicking ETFs relied on public filings, which proved too late or misleading to accurately reflect investment positioning. Other funds only offer a single hedge fund-like strategy that often experiences long periods of underperformance. Instead, Unlimited has built a set of machine learning algorithms that analyze real-time investment returns from a diverse set of hedge fund styles. HFND will allocate a basket of exchange-traded ETFs and futures to replicate the returns of these underlying hedge funds.

HFND is an actively managed ETF that will typically hold long and short positions in 30-50 ETFs and exchange-traded futures across all asset classes. It will have management fees that are about a quarter of the standard 2 and 20 cost of a typical hedge fund. The strategy will be managed by Mr. Elliott and Mr. McNevin.

About Bob Elliot
Bob Elliott is co-founder, managing director and chief investment officer at Unlimited. He has developed innovative investment strategies for more than two decades, most recently as a member of the investment committee of Bridgewater Associates, LP, the world’s largest hedge fund. Mr. Elliott worked at Bridgewater from 2005 to 2018, where he created investment strategies across equities, fixed income, credit, FX and commodities, many of which are used in the fund Pure Alpha headlight. In his role on the investment committee there, he was responsible for overseeing Pure Alpha’s foreign exchange, sovereign credit and emerging markets portfolios. Prior to that, he built and led Ray Dalio’s personal investment research team at Bridgewater for 10 years. Mr. Elliott is also the author of hundreds of widely read daily observations of Bridgewater and directly advised the Treasury, the Federal Reserve and the White House during the global financial crisis in 2008. He holds a BA in history and science from Harvard University.

About Bruce McNevin
Bruce McNevin is Co-Founder and Chief Data Scientist at Unlimited. He is an economist with 35 years of experience specializing in econometric modeling and forecasting. From 2016 to 2022, he was Director of Bank of America’s Quantitative Strategy Group, where his primary responsibility was the development of mortgage-backed securities pricing models. He was at Bank of America for five years and before that he worked for 12 years at a hedge fund as managing director of Mortgage Research. For the past 16 years, Mr. McNevin has been an assistant professor in the Department of Economics at New York University, where he teaches master’s courses in financial econometrics and Bayesian econometrics. He maintains an active research program outside of his normal professional responsibilities and has recently published several articles on the use of wavelets to estimate the Beta of the Financial Asset Pricing Model (CAPM). Mr. McNevin holds a doctorate in economics from the CUNY Graduate Center.

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Before investing, you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information can be found in the prospectus. A prospectus can be obtained by clicking here. Please read the prospectus carefully before investing.

As with all ETFs, shares of the Fund can be bought and sold on the secondary market at market prices. The market price should normally approximate the net asset value per share (NAV) of the Fund, but the market price can sometimes be higher or lower than the NAV. There are a limited number of financial institutions authorized to buy and sell shares directly with the Fund; and there may be a limited number of other liquidity providers in the market. There can be no assurance that the shares of the Fund will trade at any volume, or at all, on any stock exchange. Low trading activity may result in stocks trading at a significant discount to net asset value.

Investments involve risk. Main loss is possible

Underlying risks of ETFs. The Fund will incur higher and duplicate expenses because it invests in underlying ETFs. There is also a risk that the Fund may suffer losses due to the investment practices of the underlying ETFs. The Fund will be subject to substantially the same risks associated with direct ownership of securities held by the Underlying ETFs. In addition, the underlying ETFs are also subject to the “ETF Risks” described above.

Derivatives Risk. Investing in derivatives of the Fund or an underlying ETF involves risks, including imperfect correlation between the value of such instruments and the underlying assets or index; loss of principal, including the potential loss of amounts greater than the original amount invested in the derivative; the possible default of the other party to the transaction; and the illiquidity of derivative investments.

Fixed Income Securities Risk. The Fund may invest in underlying ETFs that invest in fixed income securities. The prices of fixed income securities may be affected by changes in interest rates, the creditworthiness and financial strength of the issuer and other factors. An increase in prevailing interest rates generally causes the value of existing fixed income securities to fall and often has a greater impact on longer duration and/or higher quality fixed income securities.

Foreign Securities Risk. Foreign securities held by the underlying ETFs in which the Fund invests involve certain risks not associated with domestic investments and may experience more rapid and extreme changes in value than investments in securities of US companies. Capital markets in foreign countries are often not as developed, efficient or liquid as capital markets in the United States and, therefore, prices of non-US securities may be more volatile.

Short Selling Risk. The Fund may engage in short selling of underlying ETF securities, which involves selling a security it does not own in anticipation of a decline in the security’s price. Short selling can involve substantial risk and leverage. Short selling exposes the Fund to the risk that it will be forced to buy (“hedge”) the security sold short when the security has appreciated in value or is unavailable, resulting in a loss to the Fund. Short selling also involves the risk that losses may exceed the amount invested and may be unlimited.

Futures Contract Risk. The Fund or the underlying ETFs may invest in futures contracts. The risks of futures contracts include: (i) an imperfect correlation between the value of the futures contract and the underlying asset; (ii) the possible absence of a liquid secondary market; (iii) the inability to close out a futures contract when desired; (iv) losses caused by unforeseen market movements, which may be unlimited; (v) an obligation for the Fund or an underlying ETF, as applicable, to make daily cash payments to maintain its required margin, particularly when the Fund or underlying ETF may not have cash sufficient; and (vi) unfavorable execution prices due to a quick sale.

Swap Agreement Risk. The Fund or an underlying ETF may invest in swap contracts. Swap agreements are entered into primarily with major global financial institutions for a specified period, which can range from one day to more than six months. The swap contracts in which the Fund or an underlying ETF, as applicable, invests are generally traded in the over-the-counter market, which is generally less transparent than exchange-traded derivative instruments.

New fund risk. The Fund is a recently incorporated investment management company with no operating history. Therefore, potential investors have no background or track record on which to base their investment decisions.

The fund is distributed by Foreside Fund Services, LLC
Launch and structure partner: Tidal ETF Services