Federal Reserve Chairman Jerome Powell, in his address at Jackson Hole, Wyo., this week, might address how the Fed plans to handle potential economic trouble spots. Other topics expected to be discussed include the size of central bank balance sheets and how global events affect various central banks' economic policies.
A Morningstar report found that funds with the lowest sustainability rating had a growth rate 3.7% lower than expected, while those with the highest rating grew about 1.4% more than expected. "This indicates investors strongly avoid funds that are rated poorly from a sustainability perspective and do so more strongly than they are [drawn] to funds that are rated more highly," Morningstar analysts noted.
Financial firms that use artificial intelligence could face complex legal and compliance issues, says attorney Rebecca Eisner. She advises that firms building or buying AI technology do thorough due diligence and set up an ongoing monitoring program.
Hedge funds' bearish positions on metals reached a record, spurred partly by US-China trade tensions, ahead of sharp price drops in the commodity market in recent days. Credit Suisse Group data show hedge funds had a net position in precious metals at negative 51% and a net position in base metals at negative 37% as of Tuesday.
Eurekahedge data show gains from January through July in double-digits for 8.5% of hedge fund managers, compared with 22.7% of managers achieving such results in the same period last year. The gain emerged largely from hedge fund managers that focus on a long-short equity strategy
Leveraged funds have remained bullish on dollar-yen, although Japan's latest inflation data might not halt the pair's downward trend, and the yen has maintained its safe-haven status. Commodity Futures Trading Commission data, meanwhile, show hedge funds are long on dollar-yen by a net 51,155 contracts.
Revisions to the Dodd-Frank Act and the Volcker rule are under development at five agencies, with the financial crisis 10 years in the rear-view mirror. The Commodity Futures Trading Commission raised concerns among Wall Street critics with its recent proposal to reduce swaps regulations for "de minimis" practitioners.
Brexit negotiations have prompted some EU policymakers to seek to limit UCITS funds' ability to delegate asset management outside the EU, said Sean Tuffy of Citigroup. A Citi report on financial regulations identifies UCITS delegation rules as a key area of concern for asset managers as debate over the issue could extend into 2019.
When TIAA asked defined-contribution plan sponsors about annuities, 14% said they think plan participants will turn to an in-plan or outside annuity for retirement income. If that figure holds up, it could mean $1 trillion of DC plan assets flowing into annuities over the next few decades, according to calculations by ThinkAdvisor.
Securities analysts at Morgan Stanley say variable annuity values and earnings are up because of a strong stock market, but they are concerned that fund outflows from variable annuities are running ahead of new sales. "We are generally seeing lackluster sales and escalated lapse activity weighing on the top-line growth," they write.