ETF price wars deepen as Deutsche cuts fees at flagship fund (FT)
Deutsche Bank’s asset management trimmed the expense ratio of its $281m Xtrackers USD High Yield Corporate Bond ETF from 25 basis points to 20bp, making it about half as expensive as the two big junk bond ETFs from BlackRock and Vanguard. That means it costs 20 cents annually to buy $100 worth of the ETF. Also on Monday, Franklin Templeton Investments unveiled a series of 16 ETFs that track the stocks of a country or region, such as Australia, Germany, Japan or Europe as a whole, most of which cost just 9bp annually.
Study: SEC Employees Earn Insider-Trading-Like Returns (II)
Employees at the U.S. Securities and Exchange Commission earn investment returns similar to the insider traders they prosecute, according to new research from Columbia University and Arizona State University. A portfolio mimicking trades made by SEC employees between 2009 and 2011 earned excess risk-adjusted returns of about 4 percent a year for all securities, with abnormal gains jumping to 8.5 percent when only stocks of firms based and registered in the U.S. were tracked.
Wall Street bankers are getting bigger bonuses again (NYP)
The average banker bonus in 2017 is poised to get fatter for the second straight year, as hopes for deregulation have led to a flurry of trading and underwriting on Wall Street, according to New York State Comptroller Thomas P. DiNapoli. The bonus projections outpace the 1 percent rise seen in 2016, but checks mailed out next spring will still fall far short of the all-time high of $180,420 in 2006.
Bets on the Next Fed Chair: A History of Speculation Gone Wrong (WSJ)
Investors expected Mr. Volcker to tackle runaway inflation with tighter monetary policy, meaning higher short-term rates, and they were right. But after his appointment, many bet that a Fed chair committed to bringing down inflation meant lower long-term bond yields, a lower gold price and a stronger dollar. They made money for about two weeks, before being crushed.
Pimco Quants Find Stocks Need a Better Hedge Than Just Bonds (BBG)
“For most of the past 20-plus years, bonds have fulfilled this role in portfolios, aided by a substantial tailwind of stable or falling inflation,” Pimco analysts wrote in a draft report seen by Bloomberg. “Bonds will continue to be a key part of portfolios, but the potential for both positive expected return and negative correlation with equities may be tested at times.”
Ex-Third Point Partner’s Bond Trades Focus of SEC Probe (BBG)
U.S. regulators are investigating whether a top trader who left Dan Loeb’s Third Point hedge fund earlier this year contributed to the mispricing of hard-to-value mortgage bonds, two people familiar with the matter said. The Securities and Exchange Commission is probing whether former Third Point partner Keri Findley caused the thinly traded bonds to be undervalued, said the people.
This Guy Documents Nearly A Year Of Quality Problems With His Tesla Model S (Jalopnik)
“If the car is built poorly enough that simple things are routinely failing, than is it such a stretch to worry about what the long term viability is for the major mechanical components?”
He Said He Wanted a 'Lawyer[,] Dog'; The Court Ruled That Was Too Vague (Reason)
"If y'all, this is how I feel, if y'all think I did it, I know that I didn't do it so why don't you just give me a lawyer dog cause this is not what's up." That was Warren Demesme talking to the police after he voluntarily agreed to be interviewed over accusations he sexually assaulted a minor. In an opinion concurring with the Louisiana Supreme Court, Justice Scott Chricton insists that Demesme only "ambiguously referenced a lawyer."