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Exchange Traded Funds Hit Record $2.865 Trillion In April; May Reach $5.9 Trillion By 2021

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Exchange traded funds (ETFs) – baskets of assets traded as stocks by investors and institutions that typically charge lower fees than mutual funds – hit a record $2.865 trillion in April, driven by rising stocks, according to a report from ETFGI, an ETF researcher.

Source: ETFGI

The ETFGI estimate is in line with a February report from PricewaterhouseCoopers that pegged ETF assets at $2.5 trillion and predicted they will rise to $5.9 trillion by the end of 2021, according to Investopedia. Nigel Brashaw, PwC partner and global ETF leader, said the estimates are based on survey data, analysis and modeling.

Milestone Reached Following Elections

The iShares ETF from BlackRock Inc. surpassed the $1 trillion asset mark for the first time in January, Reuters reported. The milestone came following a shift in markets following the November U.S. presidential election, carrying a stock rally.

ETFs’ low cost and tax efficiency is expected to drive this growth, along with investor disappointment with high fees and poor returns on actively managed funds.

The demand for ETFs has survived questions over the funds’ durability in periods of market stress.

Martin Small, the U.S. head of iShares, said clients are using iShares ETFs in place of individual securities to trade more efficiently than futures, individual bonds and swaps to assume long term positions.

Equity Markets Drive ETF Growth

“Investors continued to favor equities over fixed income and commodities as equity markets performed positively in April,” said Deborah Fuhr, ETFGI managing partner and co-founder. She said the S&P 500 was up 1%, while emerging markets and global equity markets outside the U.S. were both up 2% in April.
“Investors were captivated by a closely-fought first round of the French elections during April,” she said.

U.S. listed ETFs/exchange traded products (ETPs) gathered $36.09 billion in April, a record amount of net inflows for the month and marking the 14th straight month of net inflows, according to ETFGI, which according to its website is the leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, based in London, England.

Equity ETFs/ETPs took in the highest net inflows with $26.41 billion, followed by fixed income ETFs/ETPs with $8.83 billion. Commodity ETFs/ETPs suffered net outflows of $889 million.
Inflows year to date reached a record $169.71 billion compared to $45.31 billion last year.

iShares accounted for April’s largest net ETF/ETP inflows with $24.21 billion, followed by Vanguard at $9.93 billion and Schwab ETFs with $2.53 billion.

Year to date, iShares took in the largest net ETF/ETP inflows of $78.53 billion, followed by Vanguard’s $50.43 billion and Schwab ETFs’ $9.21 billion.

Passive ETFs To Lead Growth

Passive ETFs that track market indices will provide the majority of the next $1 trillion in U.S. ETFs, according to PwC’s Brashaw. PwC expects smart growth ETFs to be a more critical part of the market in the future.

Actively managed funds that are not transparent represent another segment of the market. The U.S. Securities and Exchange Commission (SEC) requires daily transparency of actively managed ETFs, Brashaw said. He said this segment of the ETF market will expand if the SEC eliminates the daily transparency rule, which does not apply to mutual funds. He predicts the transparency rule will be changed at some point in the future.

The transparency rule is less of an impediment to actively managed fixed income ETFs.

Cost Drives Passive Index ETFs

Low cost is the main consideration for passive index trackers, Brashaw said. For the other two types of ETFs, investment managers’ track records are the main differentiating factors.

The average ETF investor is usually younger or has higher net worth and more sophistication than the average investor overall.

Robo advisors tend to use ETFs on account of the lower cost. Robo advisors will face higher performance and digital delivery channel expectations over time.

More investment strategists are using ETFs for building portfolios, including some who completely use ETFs.

Bitcoin ETF Awaited

Cryptocurrency users, meanwhile, are awaiting the SEC’s approval of the first bitcoin ETF since it will make the cryptocurrency more accessible to the investors and enhance its credibility. The SEC rejected a bitcoin exchange-traded fund (ETF) sought by Tyler and Cameron Winklevoss in March, but the proposal is currently under review.

ETF holdings by individual investors have been stable at 45% to 55% of total U.S. assets even as interest from institutional investors and the ETF market itself has grown, according to Brashaw.

S&P 500 ETF Benefits

The S&P 500 is considered by many to be the best representation of the U.S. economy since it covers all the main economic sectors and covers about 80% of the country’s market capitalization. About $7.8 trillion of investor cash is held in the index’s equities, of which more than $2 trillion is in index ETFs.
Some S&P 500 ETFs do a better job of replicating the index benchmark while some do a better job at a lower cost.

Warren Buffet has suggested investing 90% of retirement funds in S&P 500 ETFs.

ETF Picks For 2017

Top ETF picks for 2017 according to Investopedia are as follows:

SPDR S&P 500 ETF (SPY)

Issued by State Street Global Advisors, SPDR S&P 500 ETF had $227 billion under management and has increased 4.13% year to date as of March with a 0.09% expense ratio.

SPY is a unit investment trust and technically not an ETF. It is the oldest of the S&P 500 benchmarked funds and has the most assets under management. The fund trades in excess of $25 billion daily, making it an attractive tactical trading instrument in addition to being a buy-and-hold investment.

iShares Core S&P 500 ETF (IVV)

With $94.5 billion assets under management, iShares Core S&P ETF gained 4.09% year to date as of March with a 0.04% expense ratio. The fund offers S&P 500 exposure at low prices. The fund is liquid for every class of investor, with more than 3 million shares trading daily.

Unlike SPY, the iShares Core S&P 500 is a true ETF, escaping the cash drag that is inherent in a unit investment trust.

Vanguard S&P 500 ETF (VOO)

With $61 billion in assets under management, the Vanguard S&P 500 ETF gained 4.09% year to date as of March with a 0.05% expense ratio. The fund offers low costs, high liquidity and offers large-cap coverage of an S&P 500 benchmark fund.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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Bitcoin

Pessimism Spreads and Blocks Out Opportunities for Bitcoin, Ripple and Ethereum

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  • BTC/USD is in a key technical scenario.
  • The dominant pessimism is likely to turn upside down.
  • ETH/USD rejects leadership again and the market languishes.

The weekend is approaching without significant changes among the main protagonists of the Crypto board. I am reviewing the dominant emotional state in social networks and pessimism rules. The gloom sets an optimal atmosphere for a change in the direction of the market.

Extreme pessimism is the antagonist of the blind euphoria we saw exactly a year ago. This melancholy crushes the psyche of the HOLDers, but should not do so in the minds of traders. For a trader, the direction of the market must be secondary.

This extremely depressing environment covers with anxiety the ability to look at the market and make the right decisions. The task of an analyst is to provide a clear picture of the current scenario that will help investors in the process of managing their portfolios.

Seeking to offer this service, today I will analyze the graphs of Bitcoin, Ripple and Ethereum represented in logarithmic scale. This type of representation helps analyze very volatile assets with wide ranges.

BTC/USD Daily Logarithmic Chart

BTC/USD trades at the price level of $3,362. The price has reached the trend line that governs the movement of the BTC/USD for years, and therefore we are facing a decisive moment. We can see if we review the graph. In recent years the price of Bitcoin has moved below the line on several occasions, to return to rising above it again.

Below the current price, the first support level is at $3,275 (price congestion support and very long-term uptrend line). The second support level is at $3,177 (long-term bearish trend line). The third support level is at $2,890 (price congestion support). Regarding this third level of support, I find it very improbable that it can be reached in the next few days because it would take an extraordinary sales force to break the two intermediate supports.

Above the current price, the first serious resistance level is at $3,925 (price congestion resistance). The second resistance level is at $4,390 (price congestion resistance). The third resistance level is at $4,693 (EMA50), a critical level from which we could start to speak of an upward turn.

The MACD in the daily range shows a perfect profile for an upward movement. After moving to extreme harmful levels, it draws a bullish divergence and crosses over to the upside. It is bullish according to the manuals, but the current situation can generate even more extreme movements.

The DMI in the daily range shows the bulls increasing their activity since the arrival of the price to the current zone. It is, therefore, a shopping area. The bears, on the opposite, should think the same as they have been decreasing their strength to approach the current levels.

XRP/USD Daily Logarithmic Chart

XRP/USD is currently trading at the $0.306 price level after failing to conquer the first resistance level at $0.32 yesterday. After this failed attempt the XRP/USD came down for support at the $0.30 price level and found it. These are now the warning levels for this pair.

Above the current price, the first resistance level is $0.32 (price congestion resistance). The second resistance level is at $0.345 (price congestion resistance). The third resistance level is at $0.370 (price congestion resistance) and is very important if the XRP/USD beats it, which would allow an attack on the EMA50 at $0.394 and enter into a neutral scenario at least.

Below the current price, the first support level is $0.30 (price congestion support). The second support level is $0.271 (price congestion support). The third level of support is at $0.258 (price congestion support and annual lows).

The MACD in the daily range shows such a perfect bullish cross profile that I doubt it can be real and work. It is likely that we will see a downward rejection of this indicator in the next few days.

The DMI in the daily range shows us how neither bulls nor bears have changed their expectations when reaching this price range. The ADX shows a loss of trend strength in the last few sessions.

ETH/USD Daily Logarithmic Chart

The ETH/USD trades at the $89.3 price level. Yesterday it tried to breach the $95 resistance level but failed. The Ethereum has all the attention on it for his condition of the leader in bull markets and his current weakness worries analysts.

Above the current price, the first resistance level is at $95 (price congestion resistance). The second resistance level is at $125 (price congestion resistance). The third resistance level is at $144 (EMA50).

Below the current price, the first support level is at $80.5 (price congestion support). The second support level is at $69 (price congestion support). The third level of support is at $53 (price congestion support).

The MACD in the daily range also shows a bullish manual structure. I am amazed at the clarity of the structure when compared to the perceived pessimistic environment.

The DMI in the daily range shows bulls unconvinced of a possible upward change in the price path. The bears, for their part, have decreased a little in intensity but remain at very high levels.

To sum up the situation, if you have reached these levels without being pushed to sell, there is nothing right now to tell us that this market is irrecoverable — nothing to give us reasonable cause.

If you are thinking about buying, the levels are adequate not for the price but because the loss of any support level can give us the signal to execute stops and conserve capital to enter lower prices if we get to see them.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

Altcoin House of Sand: Only BTC, LTC and XRP Remain From Five Years Ago

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If anyone is in need of a harsh reminder of the precarious nature of the altcoin market, one could do worse than to browse historical cryptocurrency data charts. Of particular note is the severe lack of presence by a vast majority of coins which would have been considered major altcoins just five years ago.

Bitcoin, A Hardfork & The Coin Formerly Known as Ripple

Looking at a historical snapshot of CoinMarketCap’s front page from December 2013, we can see that only Bitcoin (BTC), Litecoin (LTC) and XRP (XRP) have survived the five years since.

In fact, from the entirety of the fifty coins listed in 2013, none are currently placed within the market cap top hundred, except the three previously mentioned. The coin to come closest is Nxt (NXT) – a coin which was ranked 16th in 2013, with a market cap of $5 million. Now Nxt floats just outside the top hundred, ranked 106th with a market cap of $28 million – a not insignificant upturn.

Ranked 4th in 2013, with a market cap of $87 million, Peercoin (PPC) went the other way, and now holds a value of $14 million. The once popular Namecoin (NMC) shared a similar fate.

Naming Conventions

As you can see from the names of 2013’s highest capped cryptocurrencies, the current convention of giving cryptocurrencies vague, enigmatic, somewhat futuristic names had not yet begun. (TRON, Ethereum, Ontology, Qtum, I’m looking at you).

Instead we have a succession of ‘coins’ with various levels of importance and function suggested by their names – ‘World’, ‘Prime’, ‘Peer’. The trend is bucked only by Bitshares PTS (PTS) and Quark (QRK), while further down the list we have BitBar (BTB), Franko (FRK) and Argentum (ARG) – none of which rank any higher than 900th today.

Bitcoin Loses Dominance

In 2013, the coins ranked 2nd, 3rd and 4th combined to produce a market cap just one tenth that of Bitcoin – which was worth $10 billion during December 2013’s peak. Litecoin, XRP and Peercoin added up to just over $1 billion at the same time.

Bitcoin dominance was at 88.9% five years ago, while even Litecoin’s 6% of the market share was greater than the ‘Others’ which made up the entire rest of the altcoin market.

This contrasts with today’s status quo which sees Bitcoin worth $60 billion, and the next three alts worth a combined $24 billion – a significant increase from one tenth, to two fifths of Bitcoin’s value.

Taking those numbers as a cross-section of the market, we see that the altcoins have exploded, and grown ahead of Bitcoin in the last five years – but for how much longer? As the Nxt (NXT) example shows, even though the altcoin market was diluted and overrun in the last few years, still enough new money came in during 2017 to continue to keep some old coins afloat.

But with the current altcoin decline of 95-99%, and the ICO trend beginning to fray around the edges, one wonders for how much longer cryptocurrency investors will keep faith in something that has proved so fleeting and transitory in the recent past.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 103 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Cryptocurrencies

Bitcoin SV Under Pressure Despite Growing Support Base

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Bitcoin SV was the worst-performing cryptocurrency in the top-ten on Thursday. The coin that previously demonstrated inverse price action with the rest of its peers now finds itself struggling to regain momentum despite signs of early adoption across the market.

BSV Update

Over the last 24 hours, the BSV price has fallen an average of 5.4% to reach $86.02, according to CoinMarketCap. The cryptocurrency market as a whole is down 1.4% over the same stretch.

In percentage terms, BSV’s downtrend is commensurate with the broader market over the past seven days, but details of the underlying price action reveal a divergence with its peers. Case in point: BSV saw highs of around $110 last Friday – a session where bitcoin and other cryptocurrencies registered new lows for the year. Losses over the next few days were much more contained relative to the broader market. It was only until Tuesday that the downtrend in BSV intensified, eventually breaking below the $90 handle toward the present lows.

Trading in SV reached $45.2 million on virtual currency exchanges, down from a high of $305 million last Friday. Binance and BitMart were the largest exchanges for BCHSV trades.

For all the controversy surrounding its release, BSV has emerged as the eighth largest cryptocurrency by market cap with a total value of $1.5 billion. Bitcoin SV has seen its ranking fluctuate over the past two weeks but maintains a strong grip on the top-ten. Bitcoin cash (BCH), which houses the ABC protocol, is ranked seventh at $1.7 billion. BCH has fallen three spots during the latest bear market.

Growing Support

Although the bitcoin cash hard fork divided the cryptocurrency community, more venues have extended support to the competing chain. Earlier this week, Circle’s Invest App enabled users to purchase BSV directly on their mobile devices, a move that could serve as a bellwether for future adoption. That being said, the success of SV on this platform is largely tied to adoption of Circle Invest in general. The app currently has only 50,000 downloads on Google Play compared with over 5 million for Coinbase. The latter has yet to offer support for BSV.

Money Button, a San Francisco-based transfer service, has already released a new JavaScript update for bitcoin SV. The company has essentially set up a virtual library for bitcoin SV that supports cryptography and transaction building for the new protocol. According to the official website, Money Button is a “digital currency payments button for websites and apps” that offers “nearly instant, nearly free” transactions.

The Malta-based Raisex exchange has also announced full support for bitcoin SV trading this week. Guarda wallet, which allows users to store cryptocurrencies, has also enabled storage of BSV on its desktop and mobile platforms.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 696 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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