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(Bloomberg) -- A chaotic selloff in the Treasuries market was spurred by a massive exodus from popular trades, heightened by liquidity concerns that could inflict more pain in coming days.
The exodus happened at a time when traders were already worried about the imminent disappearance of a support beam for the market -- a regulatory exemption that has allowed banks to accumulate more U.S. bonds.
Treasury futures open interest across a range of maturities sank by a huge amount Thursday: the equivalent of $50 billion of 10-year notes. It didn’t help that this coincided with the Treasury Department selling $62 billion of seven-year notes, an auction that proved to be a disaster.
The month ahead could be rocky, too. Back in April, the Federal Reserve tweaked its rules to exempt Treasuries from banks’ supplementary leverage ratios -- allowing them to expand their balance sheets with U.S. debt. But that relief ends March 31 and what happens next is something of a mystery.
“It wasn’t an orderly selloff and certainly didn’t appear to be driven by any obvious fundamental continuation or extension of the reflation thesis,” wrote NatWest Markets strategist Blake Gwinn in a note to clients. A number of more technical factors were in the mix, against a backdrop of a good-old-fashioned buyers strike, he said.
Summary prospectus, Aug 1, 2020As of November 1, 2013, the fund is generally closed to new investors other than those who ... invest directly with American Century....
Good questions. To those I would add what was it that finally did bring this to the SEC's attention?I want to know what the young man who was running the fund was exactly doing? Was there malfeasance? Or did he really believe the 3rd party model was incorrect and there was a "tweaking" for good reason? He's obviously lawyered up. Who else knew and who challenged him on his actions? Wasn't there a compliance/risk officer? What was he doing/not doing/getting paid for?
Bold emphasis my own.REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of Trust for Advised Portfolios and the
Shareholders of Infinity Q Diversified Alpha Fund
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of assets and liabilities of Infinity Q Diversified Alpha Fund, a series of shares of beneficial interest in Trust for Advised Portfolios, and Subsidiary (the "Fund"), including the consolidated schedule of investments as of August 31, 2020, and the related consolidated statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, the statement of cash flows for the year then ended, and the financial highlights for each of the years in the three-year period then ended, and the related notes (collectively referred to as the "financial statements"). The consolidated financial highlights for the years ended August 31, 2017 and August 31, 2016 were audited by another independent registered public accounting firm whose report, dated February 1, 2018, expressed an unqualified opinion on those consolidated financial highlights. In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Fund as of August 31, 2020, the consolidated results of their operations for the year then ended, their cash flows for the year then ended, the changes in their net assets for each of the years in the two-year period then ended, and financial highlights for each of the years in the three-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2020, by correspondence with the custodian, prime broker and third-party counterparties. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
yield_curve_steepeningRight now, longer term rates are rising, while the Fed is keeping the short term rates low. That means the yield curve is steepening at a rapid rate. That should mean a continuation of small cap out performance over at least the next 15 months. And if the Fed dithers in allowing short term rates to keep pace with the rise in long term rates, then the message is that small caps should continue to outperform for a longer time, due to all of that excess liquidity.
https://sr-sv.com/the-relation-between-value-and-momentum-strategies/Simple value and momentum strategies often end up with opposite market positions. One strategy succeeds when the other fails. There are two plausible reasons for this. First, value investors regularly bet against market trends that appear to ‘have gone too far’ by standard valuation metrics. Second, value stocks carry particularly high market risk or ‘bad beta’ and thus fare well when market risk premia are high and the market turns for the better. This typically coincides with ‘momentum crashes’ in oversold markets. As a consequence, value and momentum signals may be complementary. In particular, value strategies are not very profitable in normal times or bull markets but have produced extraordinary profits when being set up in the mature state of a bear market. Similarly, momentum signals can be adjusted by extreme valuation metrics alongside signs of trend exhaustion.
Article:You’ve probably noticed that value investing has been the opposite of dead for a while now. In fact, small value stocks have more than doubled since the low last year. Yes, I’m cherry-picking. Sue me. More interesting is the fact that they’re breaking out relative to growth stocks. We see this in large stocks too, but the effect is more pronounced here.
Concentrated Mutual funds of VZ:5G is the next generation of wireless service, which is expected to increase network speeds and make networks more responsive. The technology could help make applications like autonomous vehicles a reality and will deliver new AR and VR experiences to smartphones.
Mid-band spectrum, such as the C-band, is considered important for 5G deployments because it offers both geographic coverage and the capacity to transmit large amounts of data. This combination is especially appealing to wireless giants who have been trying to fill out their spectrum portfolios.
Rates can go up even if the Fed isn't actively raising them. Rates will go up if the bonds don't sell.@WABAC - have you sold all of your bond funds on the expectation of a rise in rates? I'm just trying to understand why anyone would do this while those who control the rates indicate no interest or reason for doing so at this time. I read the articles and I've listened to all the chatter and I just don't see what indications are pointing to a need for disposing bond funds.
I don't particularly like bond funds. So rather than watch some remarkable gains -- for bonds -- evaporate, I decided to sell. When I'm ahead 8% on a TIPs index fund it's no fun for me to watch the drip, drip, drip. And so on with the other funds, even if the returns were smaller.The 10-year U.S. Treasury yield topped the 1.49% level on Thursday morning, its highest level in more than a year. . .
. . . The move higher in rates is unnerving investors fearing inflation could be driving it instead of just the economy recovering. The 10-year yield ended January at 1.09%. It closed 2020 well under 1%. So it’s moved more than a half percentage point in under two months, quite rapid for the bond market and relative to rates at these historically low levels.
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