You wanna know what is going on? David Rosenberg explains…

“US consumers are cutting back, and where they are not cutting back, they are scaling down. This new cycle is all about ‘getting small’ and it is deflationary. For yet another in the litany of signs pointing in the direction of social change towards thrift, have a look at what is transpiring at the upper echelons of the income strata – Now Even Millionaires See the Benefits of Budgeting on page B5 of the Saturday NYT is a must read.

“Not only are the rich trading down, but the article quotes a high net worth financial advisor who said ‘many of our clients are very happy to be sitting on bond portfolios and cash reserves.’ And see the article on page 2 of the Sunday NYT – Beauty Products Lose Some Appeal During Recession. According to the NPD Research Group, total sales

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World stocks retreated further from last week’s 11-month high on Monday as lower energy and commodity prices and caution ahead of a Federal Reserve meeting and G20 summit prompted investors to trim risky trades.

Leaders of the Group of 20 meet on Thursday and Friday in Pittsburgh and U.S. President Barack Obama said on Sunday he would push world leaders for a reshaping of the global economy in response to the crisis.

World stocks, measured by MSCI have risen over 26 percent this year, recouping more than half of last year’s losses, underpinned by repeated pledges by G20 policymakers to keep emergency support for the economy in place.

“The market might look slightly overbought near term, but the economy is definitely improving, corporate profits are definitely improving, interest rates are staying low, valuations aren’t expensive,” said Nick Nelson, European equity strategist at UBS. MSCI world equity index <.MIWD00000PUS> fell 0.7 percent, while the

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p style="text-align: left;"By Claus Vistesen: Copenhagenbr /emspan/span/em/pp style="text-align: center;"emspanbr //span/em/pp style="text-align: center;"emspanChina! China! burning bright /span/em/p p style="text-align: center;"emspanIn a bubble, Day and Night /span/em/p p style="text-align: center;"emspanIs it Bust or is it Boom/span/em/p p style="text-align: center;"emspanThat frames thy fearful asymmetry?* /span/em/p pbr //p pspanbr //span/ppspanCan you feel it? That calm and soothing feeling of low volatility and heaven bound risky assets driven by green shoots and second derivatives. Well, if you can't you are excused since neither can yours truly, or more precisely; he has a distinctly difficult time seeing from where people get the idea that we are headed for a broad based global recovery. However, beauty as always lies in the eye of the beholder and whichever way you look at it would be difficult to completely deny that the three key ingredients for a global recovery (and a resurgence of carry trade) in the form of ...

China! China! burning bright

In a bubble, Day and Night

Is it Bust or is it Boom

That frames thy fearful asymmetry?*

 (click on pictures to enlarge)

Can you feel it? That calm and soothing feeling of low volatility and heaven bound risky assets driven by green shoots and second derivatives. Well, if you can't you are excused since neither can yours truly, or more precisely; he has a distinctly difficult time seeing from where people get the idea that we are headed for a broad based global recovery. However, beauty as always lies in the eye of the beholder and whichever way you look at it would be difficult to completely deny that the three key ingredients for a global recovery (and a resurgence of carry trade) in the form of low volatility, steadily climbing risky assets, and benign credit wholesale market credit

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New hedging ETF to tackle emerging markets and global macro strategies.

 

 

The second exchange-traded fund aiming to deliver hedging strategies at bargain-basement prices is set to launch on Tuesday.

The IQ Hedge Macro Strategy Tracker ETF (NYSE Arca: MCRO) is expected to hit the market taking a more specialized approach. Its sister IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI) set the table in March for using ETFs to mimic hedge funds. But it takes a broad approach across six different types of hedging strategies. (See related story here.)

The new ETF will focus on combining two hedging strategies—global macro and emerging markets. According to IndexIQ, which created MCRO’s underlying benchmarks and serves as its sponsor, the fund will start with about a 75% allocation to emerging markets and 25% to more diversified global markets.

Just as with QAI, the new fund will come with an expense ratio of 0.75%.

As with

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New hedging ETF to tackle emerging markets and global macro strategies.

 

The second exchange-traded fund aiming to deliver hedging strategies at bargain-basement prices is set to launch on Tuesday.

The IQ Hedge Macro Strategy Tracker ETF (NYSE Arca: MCRO) is expected to hit the market taking a more specialized approach. Its sister IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI) set the table in March for using ETFs to mimic hedge funds. But it takes a broad approach across six different types of hedging strategies. (See related story here.)

The new ETF will focus on combining two hedging strategies—global macro and emerging markets. According to IndexIQ, which created MCRO’s underlying benchmarks and serves as its sponsor, the fund will start with about a 75% allocation to emerging markets and 25% to more diversified global markets.

Just as with QAI, the new fund will come with an expense ratio of 0.75%.

As with

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In our ETF based newsletter, the carry trade is one of the strategies that we employ.  For those unfamiliar with the carry trade, you are essentially trading the interest rate differentials of different countries.  You short a low-yielding currency and go  long a higher-yielding currency.

You can make money in two ways.  You earn the “carry” if the currencies remain very stable, and neither move.  You can also make money in this trade by being correct in the direction.  For instance if you are short the Japanese Yen and long the Australian dollar, then you can also make money if the Australian dollar goes up, and the Yen goes down.

As an example of how to earn the carry, lets look at the Japanese Yen versus the Australian Dollar.  The Yen has been the carry trade vehicle of choice for much of the past decade because Japan has

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CIO explains how new ETF uses its own optimization strategies to weight holdings and limit risk while trying to maximize returns. 

 

Salvatore Bruno is chief investment officer at IndexIQ Advisors LLC. Prior to joining the asset manager and index provider, he was a portfolio manager at Deutsche Asset Management. Before that role, Bruno was the head of advanced quantitative research at DeAM.

On Thursday, IndexUniverse Managing Editor Murray Coleman caught up with the busy CIO traveling in Philadelphia. Among other topics, they discussed the firm's launch of the first exchange-traded fund to mimic hedge fund strategies. That's the IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first exchange-traded fund to mimic hedge fund strategies. (See article here.)

 

IU: Is the new ETF taking a totally passive approach?

Bruno: It's fair to say that this is a rules-based methodology. But it does rebalance more than a traditional passive investment.

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