Investment funds

The ETF industry in the U.S. has finally broken through the $2 trillion milestone, demonstrating the product’s surge in popularity with investors. Through December 22nd, assets have increased 18% in 2014 from $1.698 trillion to $2.007 trillion based on positive market performance and net new assets.

As investors pull billions out of commodities, Yale University Professor K. Geert Rouwenhorst’s funds are still attracting new money. SummerHaven Investment Management oversaw $1.5 billion as of November, from $600 million in January, even as raw-material prices fell and its exchange-traded fund declined.

The pursuit of yield has driven both advisors and investors toward newer, more complex ETFs and closed-end funds — products that use leverage, employ derivatives, deal in options and futures, sell short and so on. When such funds are held in clients’ IRAs they can generate additional problems for advisors, creating tax headaches and raising questions about investor suitability.

BlackRock, Macquarie Group and Millennium Capital Management former employees are planning a Hong Kong-based hedge fund which will use computer models to spot trading opportunities in 13 Asian stock markets.

When it comes to the ability of the U.S. government to finance itself in the bond market, this year will go down as as one of the best on record -- and dealers say 2015 will be no different.

The ideal investing approach should control downside risk while also achieving a reasonable rate of growth. Here are a few suggestions.

This past week saw a number of new offerings in exchange traded products and funds from Deutsche Asset & Wealth Management, KraneShares and FirstTrust, among others. Also, Van Eck Global closes five international-themed funds.

Janus shares surged 43% on Sept. 26, their biggest one-day gain ever, after it announced that Bill Gross would join the firm from Pimco. Hiring Gross was the boldest step yet in an almost five-year effort by Richard M. Weil to attract new money and change the public perception of Janus, a firm still known primarily for its growth-equity funds.

The industry saw Bill Gross attracting $769 million to Janus, the global ETP market breaking an asset record, a prediction on how much of 401(k) contributions that target-date funds will capture by the end of the decade and a J.P. Morgan executive joining Wilton, Conn.,-based Commonfund as CEO.

Carlson Capital, a $9 billion investment firm, plans to start three hedge funds to invest in the debt and equity of energy companies after oil prices slumped to their lowest in five years.

Investors have gotten more desperate in their pursuit of yield, reaching for ever-dicier products. What could possibly go wrong?

Regulatory approval of Eaton Vance's non-transparent ETF has its industry competitors closely studying its offering to determine how its proposal succeeded where others failed, and whether they need to develop and offer their own version.

Money managers’ profits in North America last year surpassed pre-crisis levels, rebounding to $34 billion on asset and revenue growth, according to a study by McKinsey & Co. Profits were 18% above the pre-crisis peak in 2007 after assets reached $30 trillion. Profits at asset managers globally also moved past 2007 levels, increasing 15% to $65 billion from 2007. Assets reached a record $64 trillion last year.

John Hancock Investments president and CEO Andrew Arnott discusses the strategic decisions the firm made as it reengineered itself following its 2004 acquisition by Canadian insurer Manulife Financial, the challenges facing asset managers in answering alternative investment demand and even potential competition from non-traditional players entering the asset management space.

Stung by poor returns and large redemptions, 889 hedge funds worldwide shut in the first 11 months of the year, above the annual average of 810 in the five years since the global financial crisis of 2008, according to figures from research firm Eurekahedge. In contrast, 56 Asia-focused funds had closed by the end of November, less than half the average 135 closures in the previous five years.

With ETF assets now poised to cross the $2 trillion mark in the U.S., industry experts gathered at the annual IMN global indexing and ETF conference in Scottsdale, Ariz., marveled at the rapid growth, innovation and market acceptance of exchange traded products in the last decade.

The net-long position in gold rose 31% to 104,532 futures and options contracts in the week ended Dec. 9, according to U.S. Commodity Futures Trading Commission data. “We are seeing safety trade toward gold,” says Peter Sorrentino, a senior vice president who helps oversee $1.8 billion at Huntington Asset Advisors in Cincinnati.

The industry saw ETF inflows break a record, Russell Indexes liquidating a fund and mergers between asset manager service providers.

As a rout in energy prices spreads to global equities, investors are returning to gold to take cover. Assets in the SPDR Gold Trust, the world’s largest bullion exchange-traded product, rose yesterday at the fastest pace since July. The holdings are up almost 1% in December, snapping four straight months of losses.

Fund managers need to focus on more than the strategies they intend to execute. They must also structure their funds and organizations in ways that address both increasing regulation and investors' concerns about the safekeeping of assets.