Category: Funds

(Some) Money Markets Float On this October

The weighted average of the Fed funds rate has edged higher.  Following the Fed hike in December 2015, the Fed funds average around 36 bp in January before moving into a 37-38 bp range.  However, since the UK referendum it has been trading consistently around 40 bp. 

The Fed fund futures contract settles at the average effective Fed funds rate for a given month, not at the policy rate.  Ahead of next week’s FOMC meeting where practically no one expects a change in policy, implied yield of the July Fed funds futures contract is 40.25 bp. 

Alibaba and the Latest Earnings

On Wednesday, August 12, Alibaba, one of China’s premier internet companies will report its quarterly earnings.  They will command more attention than one might suspect by global fund managers.  

Have S&P 500 Index Funds Lost their Sparkle?

In 1976, the Standard and Poor’s 500 became the first stock market index tracked by a fund when Vanguard launched its legendary Vanguard 500 Index Fund (VFINX), which started with just $11 million and grew to become the largest U.S. equity mutual fund in existence by the late 1990s.

The year 1992 saw the first successful launch of an exchange-traded fund (ETF). It, too, tracked the S&P 500. Nearly a quarter century later, and largest ETF in existence is SPY, which tracks — you guessed it — the S&P 500.

Funds

Funds, in terms of investing, are supplies of capital that belong to multiple investors. This capital collectively purchases securities. Each investor in a fund retains ownership and control of his or her own shares. Funds grant investors a broader selection of investment opportunities than they would normally enjoy on their own, as well as the benefit of professional management of the investment. The fees associated with trading the securities procured by an investment fund also tend to be much lower than individual investors would generally be able to obtain investing on their own.

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