December 23, 2020
Socially responsible investments that track environmental, social, and governance principles have outperformed this year and attracted greater inflows, but this does not necessarily mean a bubble is forming in the asset category.
“Overall, our findings deflate the notion of an ESG bubble during our sample period. If rising inflows into ESG investing had created a price bubble, we would expect to see rising valuations for these companies (as measured by increasing P/E ratios). Instead, our return decomposition showed little support for this theory. We found that outperformance of ESG was mainly driven by companies’ earnings growth and better dividend yields,” Guido Giese, Executive Director; Navneet Kumar, Vice President; and Zoltán Nagy, Executive Director, MSCI Research, said on ETF Strategy.
Silver ETFs Gain As Analysts Predict Significant 2020 For Metal December 23, 2020
Silver is up over 1% on Wednesday, after falling steeply in the prior session. The industrial metal found support near the $22 per ounce level late last month and climbing more than 20% throughout December to reach over $27.50.
The
iShares Silver Trust (SLV) gained 1.71% as the holiday week continues and could present an opportunity for precious metals buyers who foresee a run higher, which some analysts are now touting as likely.
Earlier this month, Saxo Bank released its annual Outrageous Prediction report, which included silver in the commodities section. In a headline-grabbing prediction, the bank predicts silver prices could target their all-time highs around $50 in 2021.
As he explains, “The growth within the active segment of the fixed-income market has led us to believe we have two great products. It’s something we continue to have a desire to build more of. We’re seeing traction for sure.”
Performance for active managers in the ETF space has been a mixed back, but the 3rd quarter let many active bond managers shine. For example, the intermediate product beat its core benchmark by almost a percent in just the quarter, as the fed started winding down purchases of corporate bonds that may have led to inflated prices and depressed yields in the second quarter.
Treasury Bond ETFs Slide as Pending Brexit Deal Saps Safety Bets December 23, 2020
U.S. Treasury bond exchange traded funds slipped Wednesday, with the yield curve steepening to a four-year high, as risk appetite improved on signs that negotiations between the United Kingdom and European Union were progressing toward a historic post-Brexit trade deal.
The
iShares 7-10 Year Treasury Bond ETF (IEF) dipped 0.3% while yields on benchmark 10-year Treasury notes rose to 0.96%, its highest level since March. Bond yields and prices have an inverse relationship, so falling prices correspond with rising yield.
Investors trimmed safe-haven exposure, which contributed to the fall in Treasury bonds and rise in rates, as U.K. and European officials were closing in on a new trade deal that would help the two sides avoid heavy tariffs at the start of the new year, the Wall Street Journal reports.