The moves expand on the regulatory agency’s review of other potential bitcoin ETFs. The US has yet to approve a cryptocurrency-based ETF. Money management firms are seeking to capture potential gains from exposure to bitcoin, which has been pulling in more interest and activity from institutional and retail investors and companies.
Scaramucci’s SkyBridge is working with investment firm First Trust Advisors on the ETF project and in March filed for regulatory approval. If greenlighted, the ETF would trade on the New York Stock Exchange Arca, which specializes in exchange-traded listings.
Fidelity also in March submitted paperwork to launch a bitcoin ETF to track the digital currency’s performance. If that wins SEC approval, shares of the Wise Origin Bitcoin Trust would trade on Cboe Global Markets.
The SEC in late April said it expected to release its ruling on VanEck’s application on June 17. The agency said it was delaying the decision to take an “appropriate” amount of time for the review. A review period can be extended for up to 240 days.
Teens will soon be able to use a new no-fee service from Fidelity Investments to buy and sell stocks, exchange-traded funds, and Fidelity mutual funds.
The firm plans to offer investing accounts, along with debit cards and savings accounts, to 13- to 17-year-olds whose parents or guardians also bank with Fidelity, according to a Tuesday press release.
Parents can see what their teens are doing in the account and discuss the reasoning behind their child’s financial decisions. “Fidelity is committed to responsibly supporting young investors,” Jennifer Samalis, senior vice president of acquisition and loyalty at Fidelity Investments, said in the press release.
The youth account, which will become a standard brokerage account with more options when the teen turns 18, will also offer educational resources. In a pilot program of the new offering, Fidelity said 90% of parents and guardians used the account as a “teaching moment” to discuss saving, spending, and investing.
“Opening the account can create new opportunities for parents/guardians to engage their teens about money concepts, then allow the teens to independently take action and learn by doing,” Fidelity spokesperson Robert Bearegard said to Insider in an email.
The offering comes amid the firm’s push to attract new investors. Fidelity added 1.6 million accounts for individuals 35 years old or younger in the first quarter of this year, which is more than three times the amount from a year earlier, the Wall Street Journal reported, citing the firm.
Bank of America analysts have previously said Gen-Z will be “the most disruptive ever” to the stock market, pushing it to focus more on technology, sustainability, and climate change, and less on classical institutions.
At the beginning of the year, an army of day traders on Reddit drove the GameStop stock price to surge from single to triple digits in an effort to squeeze short sellers. The rally signaled the power of a new wave of investors and a new trend of investing in so-called “meme stocks” like AMC and GameStop, among others.
Energy sector exchange-traded funds were the only group this week to add more than $1 billion in inflows as the cargo-ship blockage in the Suez Canal helped oil prices recover from their slump into correction territory.
Energy ETFs were a standout as flows to sector funds “fell prey to the general uncertainty” that ran through the week ended March 24, said EPFR, a subsidiary of Informa that provides fund flows and asset allocation data.
Four of the 11 major groups — commodities, telecoms, technology and financial sector funds — logged outflows for the week, according to a note issued Friday.
Investors pushed into energy sector funds “during a week when the blockage of the Suez Canal, the prospect of the North American spring and summer driving season and expectations of less investment in new supply helped the price of oil rebound from an earlier correction,” said Cameron Brandt, director of research at EPFR, in the note.
Brent oil, the international benchmark, and West Texas Intermediate crude prices tracking US light, sweet crude this week fell into correction territory, with prices down 10% or more from recent highs.
Prices have since recovered some ground, with Brent and WTI each rising by more than 4% on Friday. Brent traded above $64 a barrel after sliding below $61 this week. WTI hovered close to $61 following its drop under $58 a barrel.
Oil prices gained on expectations of tighter oil supplies while a cargo ship remains stuck in the Suez Canal, a key trade route that’s used to transport crude and refined products and connects Europe to Asia. Analysts have said it may be weeks before the Ever Given, a nearly 200-foot-wide and 1,300-foot-long vessel, is dislodged from the canal.
“The blockage has impacted over 20 oil tankers and the longer this lasts, it should drive oil prices higher,” Edward Moya, senior market analyst at Oanda, wrote in a note. Meanwhile, “Europe is slowly getting their vaccine rollout in order and that should trigger energy traders to price in an improved crude demand outlook by the summer,” he said.
As the summer driving season approaches in the US, roughly 14% of the population has been vaccinated for the coronavirus, according to the Centers for Disease Control and Prevention. President Joe Biden on Thursday raised his vaccination goal to 200 million for the first 100 days of his administration after hitting his previous target of 100 million.
Vaccine distribution is priming the economy for a reopening later this year, and the pace so far has been faster than officials expected. Optimism is growing and investors have been piling into stocks that were beaten down by the pandemic but are now set to thrive as economic activity restarts. Investors are finding ETFs to be a solid bet on a range of reopening plays, sending some funds soaring year-to-date in 2021.
“ETFs are an instant global diversification to many different companies from around that industry,” Andrew Chanin, CEO and co-Founder of ProcureAM, told Insider. Chanin is behind UFO, an ETF focused on space exploration launched in 2019. UFO, he said, is “for investors looking to get access to the space economy and don’t want to settle or just pick a couple of names.”
Year-to-date, ETFs tracking oil, air travel, and retail are soaring, thanks to the value stocks – typically well-established companies that are often undervalued and have lower price-to-earnings ratios – in their holdings that could appreciate with a burst of new economic activity.
Cyclical industries are usually attuned to various business cycles. Revenues are higher when there is economic growth and lower in times of contraction.
Andrew Slimmon, managing director and senior portfolio manager at Morgan Stanley Investment Management, in a recent note said he is “extremely bullish” on value stocks, especially after the Federal Reserve’s decision to keep its policy in place until the US economy rebounds last week.
Here are three ETFs that are benefitting from investor sentiment around the economic reopening:
The United States Oil Fund primarily invests in listed crude oil futures contracts and other oil-related contracts. The ETF, which debuted in 2006, may also invest in forwards and swap contracts.
The roughly $3 billion fund has gained 26% year-to-date.
Oil prices have soared since mid-February due to outages in Texas from the freezing temperatures. Refineries have taken a while to bounce back from the historic blast of winter weather, causing inventories to drop. Still, a summer rally may be in store for the oil ETF amid a tighter market.
The US Global Jets ETF invests in the global airline industry, which includes airline operators and manufacturers around the world.
Launched in 2015, the roughly $11.5 billion fund has gained 25% year-to-date.
The index utilizes a tiered weighting scheme driven by market capitalization and passenger load. 70% of its weight is in US large-cap passenger airlines with the top four companies receiving 10% each. The next five largest US or Canadian airlines each receive a 4% weighting.
United Airlines and American Airlines are the ETF’s biggest holding both at 11% each, followed by Southwest Airlines and Delta Airlines at roughly 10% each. Alaska Air Group takes up 4%
The airline industry was among those that suffered the most when large swaths of the global economy shut down, halting travel in nearly every part of the world for some time. Optimism is gaining, however, when the Transportation Security Administration in mid-March revealed that air travel spiked to its highest level in nearly a year.
The SPDR S&P Retail ETF primarily invests in the US retail industry from apparel, automotive, computer and electronic, to department stores, general merchandise stores, and internet and direct marketing, among others.
The roughly $635 million fund has gained 42% year-to-date.
The top sectors it focuses on are internet and direct marketing at 21.5%, followed by automotive and retail at 18% each.
Holdings include Hibbett Sports, Wayfair, Best Buy, eBay, Murphy USA, Revolve Group, Magnite, Dick’s Sporting Goods, Albertsons companies, and Target, all weighing a little over 1% each.
As the economy rebounds from pandemic lows, the retail sector is making a strong comeback, driven by the pent-up consumer demand. Retail sales, according to the National Retail Federation, are expected to grow between 6.5% and 8.2% this year to more than $4.33 trillion in sales.
Many of the retail companies have also invested in enhancing their online presence to catch up on the e-commerce trend that many experts say is here to stay.
Teladoc is now the largest holding in the ARK Genomic Revolution ETF and is tied for the third-largest holding in the ARK Innovation ETF with Roku.
As of market close on March 17, the combined shares bought by Wood’s ETFs were worth approximately $58 million.
Teladoc has been under pressure of late after Amazon announced it’s launching a rival telehealth business called Amazon Care. The service had previously only been available to Amazon employees in the state of Washington.
Now, as Insider reported back in December, Amazon Care is undertaking a national expansion with the goal of serving workers at other major companies in all 50 states.
Teladoc stock fell nearly 8% in a gap down move before Wednesday’s opening after the Amazon Care expansion was confirmed, perhaps signaling to Wood and co. that time was right for a buy.
Shares of the multinational telemedicine and virtual healthcare company have fallen over 36% from mid-February highs. While some investors fear Teladoc may have more downside ahead of it, many experts argue Amazon won’t be able to take over from the Harrison, New York-based firm so easily.
David Larsen, CFA, a managing director at BTIG, told Bloomberg, “the threat is overstated because Teladoc and American Well have contracts with many of the large health plans. Amazon has been very successful in taking market share from your traditional retail storefronts in many areas. But health care is different.”
Teladoc traded down 3% as of 3:49 p.m. ET on Thursday.
Roundhill Investments and Huddle Up newsletter founder Joe Pompliano launched the first-ever exchange-traded fund dedicated to professional sports teams and leagues on Wednesday.
The ETF consists of 36 sports-related holdings including sports teams, leagues, media companies, and even sports-related SPACs. The fund will trade under the ticker “MVP” on the New York Stock Exchange.
As of March 17, the MVP ETF consisted of 53.9% pro sports teams, 17.4% apparel companies, 14.1% pro sports leagues, 8.3% SPACs, and 6.2% media firms and others.
Sports teams in the ETF include the New York Knicks, New York Rangers, Atlanta Braves, Manchester United, Juventus, Borussia Dortmund, and AS Roma.
Professional sports league holdings include Formula One and WWE. Companies within the sports media and sports apparel sectors in the ETF include Nike, Puma, Adidas, and MSG Networks.
MVP’s largest holding is Madison Square Garden Sports Corp. at 9.39% of the total ETF value.
After the launch of MVP, Roundhill Investments will have five ETFs with combined assets under management of over $650 million. Roundhill also started ETFs like the BITKRAFT Esports & Digital Entertainment ETF and the Sports Betting & iGaming ETF.
In a substack letter to investors, MVP partner Joe Pompliano lauded the ETF’s promise given the professional sports industry, the consistent appreciation of sports teams and leagues, increased media rights, and an expanding sports betting market.
“Professional sports leagues and teams have a history of being premium, scarce assets with a strong history of value appreciation. With MVP, we have created a unique and efficient vehicle for you to adequately invest and diversify into the sector,” Pompliano wrote.
In a video posted to Twitter on Tuesday, Barstool Sports founder Dave Portnoy promoted a new exchange-traded-fund that is set to launch on the New York Stock Exchange this Thursday.
The VanEck Vectors Social Sentiment ETF tracks social media sentiment on various platforms like Reddit, StockTwits, and Twitter to fuel its holdings. The ETF will trade under the ticker symbol “BUZZ.”
“There is a new ETF launching that I’m a part of, that I’m putting my reputation behind,” Portnoy explained in the video. Portnoy added that he was “approached by these guys who built an algorithm” that “lingered” and “did its thing” for a number of years.
That algorithm is the BUZZ NextGen AI US Sentiment Leaders Index developed by Periscope Capital in 2015.
The ETF utilizes alternative data about stocks scraped from social media posts, news articles, and blog posts that are then filtered through an analytical system that helps determines whether the sentiment in either positive or negative. From their, the top ranked 75 US stocks with a market capitalization of more than $5 billion are included in the ETF, which is rebalanced monthly.
“BUZZ empowers individual investors to potentially benefit from the predictive insights gained by measuring the collective convictions about stocks, ultimately building the benchmark for social sentiment,” VanEck managing director Ed Lopez said in a press release.
In an emailed statement to Insider, VanEck added: “David Portnoy is a shareholder of BUZZ Holdings, ULC, the parent company of the BUZZ NextGen AI US Sentiment Leaders Index. He represents the Index and has no affiliation with VanEck. He does not provide investment advice on behalf of VanEck. There is no affiliation with VanEck and Barstool Sports.”
A similar social media insight ETF from Sprott Asset Management that was based on a different social media sentiment index launched in 2016, but closed three years later after failing to attract enough assets.
Inflows into the equity market are strong despite the spike up in rates as investors respond to economic growth prospects by embracing risk and not staging a “taper tantrum”, BlackRock said in a note Monday.
Equity exchange-traded funds have raked in $120 billion so far this year, outpacing inflows into fixed income ETFs by 4:1, according to iShares data outlined by Gargi Chaudhuri, head of US iShares markets and investments strategy at BlackRock.
That rush of investor cash into equities has taken place at the same time that Treasury bond yields have made notable moves higher, including a jump past 1.5% on the 10-year yield last week.
“That’s not because the stock and bond markets have become untethered, but rather because rates are moving for the right reason: stronger U.S. growth,” wrote Chaudhuri in the note, describing equities as “resilient”.
Economists have broadly been increasing their forecasts for economic growth as vaccinations to prevent COVID-19 continue to accelerate. Meanwhile, House representatives in Washington last week passed a proposed $1.9 trillion stimulus bill, sending it to the Senate for approval. The US economy in 2021 could grow by the most in decades, said John Williams, president of the Federal Reserve Bank of New York, last week.
“Unlike previous bouts of rising rates (like the Taper Tantrum of 2013), equity investors have generally responded with risk-on reallocations into pro-cyclical exposures this time around,” said Chaudhuri.
The response by investors could also be explained by real rates remaining “extremely accommodative” at around -70 basis points after the recent rise, she added. Real interest rates exclude the effects of inflation.
ETFs skewed towards value and cyclical stocks will keep benefiting as rates continue to rise and the yield curve steepens, Chaudhuri said, “with over $8 billion of ETF inflows to the value factor corroborating this view.” The inflows of $8 billion represent nearly as much as the previous six months combined, BlackRock said.
Meanwhile, earnings forecasts for 2021 and 2022 should increase through the spring and summer, “further cushioning in the impact of the rise in Treasury yields,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a Monday note.
Shepherdson said the spread between Treasuries and the S&P 500 earnings yield recently fell to 115 basis points after widening by 363 basis points at the peak.
“A narrower spread is no guarantee of future equity gains, but it ought to provide of measure of comfort,” he wrote.
This article and headline has been corrected from an earlier version that said $8 billion has flowed into ETFs this year. That figure refers to inflows into value stock ETFs. The correct figure for year-to-date inflows into ETFs is $120 billion.
Cathie Wood emerged as the breakout star investor during one of the most chaotic years in Wall Street history.
While her career dates back to 1981, 2020 was the year when her performance and fund inflows earned her a cult-like following in the industry.
The $24.5 billion ARK Innovation ETF, her flagship exchange-traded fund, rose 150% last year, thanks partly to Tesla’s 730% gain. Her other funds that cover the fintech, genomic, and internet industries all landed on the list of the 10 best-performing ETFs of 2020.
Retail and professional investors alike took notice of Wood’s performance: Last year, Ark’s family of ETFs grew at the fastest proportional growth rate of any ETF or mutual-fund manager in a Morningstar database that goes back to 2000.
Ark ETFs continue to command the industry’s attention in 2021 by attracting new investor money at a pace that rivals stalwarts like BlackRock’s iShares and Vanguard. Even her less-popular index funds are in the top 10% of flows year-to-date, according to Bloomberg data.
Following Wood’s rapid rise over the past few years, there are questions about whether, and for how much longer, she can sustain her outperformance. The recent sell-off in high-growth stocks triggered a record one-day outflow of $465 million from her flagship innovation ETF. But in a sign of her staying power, investors poured a near-record $464 million back into the fund on the final trading day of February, Bloomberg data shows.
Insider will continue covering every angle of her cult-like status, from her ascendancy to the biggest investing bets she is making and the corners of the market she’s exploring next.