MarketWatch - 03/26/2015"Have you now, or have you ever, worked on Wall Street?" That might well be the question posed in the form of an indictment by the latter-day McCarthyites who find it convenient to paint all who earn their living in finance as Gordon Gekkos. Not that there aren't rapacious and vicious bastards in the financial markets who would stab their grandmothers to gain an advantage.
Reuters - 02/12/2015By Sam Forgione NEW YORK, Feb 12 (Reuters) - Investors in U.S.-based funds poured $7.7 billion into taxable bond funds in the week ended Feb. 11, with investors favoring higher-risk debt after a strong U.S. jobs report, data from Thomson Reuters' Lipper service showed on Thursday. The inflows marked the funds' sixth straight week of net positive demand. Riskier high-yield bond funds attracted $2.9 billion, with the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) attracting $924 million - its biggest inflows since Lipper began tracking the exchange-traded fund in 2007. Stock funds attracted $4.3 billion in inflows, with all of the new cash flowing into stock ETFs, which are thought to reflect the behavior of the institutional investor. Stock mutual funds, however, which are commonly purchased by retail investors, posted $216 million in outflows. The inflows into higher-yielding bond funds and stock funds showed heightened risk appetite after a stronger-than-expected U.S. payrolls report for January. Bond investors were reassured, even as the report suggested a greater likelihood of a Federal Reserve rate hike by mid-year. "There's definitely a little more risk-taking," said Jeff Tjornehoj, head of Americas research at Lipper. "Investors still regard a rate hike as speculative, and they're not threatened by that so much as they are made more enthusiastic by this jobs report." Funds that specialize in safe-haven U.S. Treasuries posted $126 million in outflows, marking their first weekly net withdrawal in five weeks. That followed $5.2 billion in inflows the prior week, which were their biggest in a year. Safer investment-grade corporate bond funds attracted cash, albeit less than high-yield funds, at $2.3 billion. European stock funds attracted $339 million in new cash, marking their third straight week of inflows despite fears of a Greek exit from the euro zone. Lipper's Tjornehoj also said meetings between euro zone finance ministers during the period boosted hopes for Greece's status in the euro zone. Funds that specialize in energy stocks posted $667 million in outflows, their biggest since last October. Oil prices ended a three-day rally over the period. "Anyone getting into energy is taking on Vegas odds right now - they're gambling," Tjornehoj said. Low-risk money market funds attracted $2.8 billion, their first inflows in six weeks. The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds. The following is a broad breakdown of the flows for the week, including exchange-traded funds (in $ billions): Sector Flow Change Assets Assets Count (%) All Equity Funds 4.297 0.08 5,117.682 11,449 Domestic Equities 2.743 0.07 3,732.789 8,239 Non-Domestic 1.554 0.11 1,384.893 3,210 Equities All Taxable Bond 7.676 0.33 2,309.938 5,964 Funds All Money Market 2.828 0.12 2,378.096 1,275 Funds All Municipal Bond 0.460 0.13 345.530 1,465 Funds (Reporting by Sam Forgione; editing by Diane Craft and G Crosse)
Credit Grade / Maturity
A classification of an ETF's exposure according to the credit rating of the constituent debt. Credit grade is based on credit ratings assigned by a rating agency such as Standard & Poor's. Credit ratings reflect the rating agency's opinion of the relative credit risk of a security. Examples include: 'AAA' (highest credit quality), Investment Grade, and High Yield (below investment grade). The percentage may not total to 100% if an ETP holds non-fixed income securities such as cash and equities. If a security is rated by two or more of the credit rating firms of S&P, Moody or Fitch, then the most conservative (lowest) rating is used. If only one of those firms rates the security, that rating is used. If a security is not rated by any of those firms, it is classified as "Not Rated". The "AAA" grade consists of those securities having a credit rating of AAA. The "Investment Grade" consists of those with a credit rating of AA down to BBB (or of SP1 for municipal securities). The "High Yield" grade consists of all securities below BBB (or for municipal securities, a rating of SP2 or SP3) that are not in default. The "Default" grade consists of securities rated "D". Only credit grades applicable to the ETP are shown. Cash and derivatives are not considered to be fixed income securities. It is updated daily and calculated by XTF Inc. using constituent assets (ETP's holdings) aggregated and mapped to corresponding category.
A classification of an ETFs exposure according to the maturity of the constituent debt. Maturity refers to the length of time until the principal amount of a bond must be repaid. Bonds are typically classified into the following three categories:
- Short-Term (bills): maturities between one and five years; (instruments with maturities less than one year are called Money Market Instruments)
- Intermediate-Term (notes): maturities between six to ten years;
- Long-Term (bonds): maturities greater than ten years.
Updated daily and calculated using constituent assets (ETP's holdings) aggregated and mapped to corresponding category.