News 18 February 2017

ETF Providers Now Control The U.S. Stock Market

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  • Vanguard could own 30% of U.S. stock market before limit reached: Vanguard, the fastest-growing asset manager with $4 trillion in assets, has plenty of room to expand before it hits potential ownership limits on U.S. stocks. Bloomberg explains Using Apple as a microcosm of the entire U.S. stock market, Vanguard collectively owns 6.3% of the shares, but none of its funds has more than 2%. The biggest holder is the $428 billion Vanguard Total Stock Market Index (VTSMX). As a diversified fund holding good assets, its stake could rise fivefold before running into ownership caps


  • Individual shares no longer are the most actively traded securities in the market. That distinction goes to exchange-traded funds, which took in a record $400 billion in the past year to become a $3.8 trillion industry


  • After putting a record total of $282 billion into ETFs in 2016, Investors added a whopping $40.1 billion,m in January, leaps and bounds above the $350 million seen in the same month a year ago


  • Just how pop­u­lar are ex­change-traded funds? Ac­cord­ing to data com­piled by Credit Su­isse, only one of the 15 most heav­ily-traded se­cu­ri­ties on the stock mar­ket in 2016 was ac­tu­ally a stock. All the rest were ETFs


  • To­tal ETF vol­ume in 2016 rose 17% over 2015 and gained 50% over 2014. That com­pared to a 7% rise in trad­ing vol­umes be­tween 2014 and 2016, ac­cord­ing to Credit Su­isse. There are nearly 2,000 ETF listings, an all-time high, Credit Suisse data show


  • Eq­uity ETFs ac­counted for the bulk of ETF trad­ing. Yet other as­set classes are fu­elling the growth in trad­ing vol­ume. Trad­ing vol­umes for com­mod­ity-based ETFs — five of which made the top 15 list — ac­counted for rose 170% com­pared to 2014, fol­lowed by a 100% gain among volatil­ity and other al­ter­ative funds and a 70% in­crease by fixed-in­come ETFs, ac­cord­ing to data from Credit Su­isse


  • Last year, ETFs ac­counted for 30% of all U.S. trad­ing in terms of value, and 23% in terms of share vol­ume. The ris­ing pop­u­lar­ity has been fu­eled by con­ve­nience and chang­ing trends. The funds of­fer in­vestors a way to in­vest in al­most any as­sets class, from stocks and bonds to cur­ren­cies and com­modi­ties, as well as sec­tor, ge­o­graphic re­gion and strat­egy. It also plays into the grow­ing fo­cus on pas­sive in­vest­ing, since the largest ETFs are in­dex funds


  • CFRA: “What we are seeing is investors are increasingly using ETFs as a replacement for individual stocks,” said Todd Rosenbluth, director of ETF and mutual funds at CFRA, an independent research provider. “That happened in 2016 and it’s going to continue in 2017 and beyond.”


  • How Can We Profit From This New MegaTrend?


  • Peak Prosperity Consulting Presents AlphaPlus, A Global ETF Fund that capitalizes on long/short sector, country and index based strategies in the $2 trillion US ETF market. Through the use of proprietary algorithmic systems, AlphaPlus aims to deliver optimal Apha returns to its Investors by profitably positioning itself regardless of market direction. AlphaPlus is ushering in a new era of fund investing based on an asset class that has taken the investing world by storm