Florida pulls $2 bln from BlackRock in largest anti-ESG divestment (3 min read)
Florida’s CFO said they will pull $2 billion worth of investments from BlackRock who is currently managing their assets. This is the largest divestment by a state among Republican leaders that have openly criticized corporations’ ESG policies. Florida’s CFO accused BlackRock of focusing on ESG rather than higher returns for investors. BlackRock said Florida’s move to withdraw assets has put politics over investor interests and jeopardizing their returns.
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Blackstone’s Real Estate Fund Hits Redemption Limit (4 min read)
Blackstone’s $63 billion real estate fund, BREIT, has limited withdrawals after a surge in redemption requests. BREIT was a behemoth in the real estate industry since it started in 2017, buying properties in a low interest rate environment as investors chased yield. However, the soaring interest rates now have turned the table, causing BREIT to limit withdrawals going forward. Shares of Blackstone dropped nearly 10% after the news, the biggest fall since March.
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A Trader Made a $36 Million Bet on a Year-End Stock Rally (3 min read)
An unknown trader bought $36 million worth of call options linked to the S&P 500 that expires on Dec 30 with a strike price at 4,175. The S&P 500 got a boost on Wednesday and closed at 4,080 after Jerome Powell signaled a slower pace of rate hike this month, but has cooled off slightly on Thursday and closed at 4,076. There are speculations that it could be a hedge fund who placed the trade for year-end hedge in case the market bounces ahead.
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The Fed’s favorite inflation measure cooled in October (3 min read)
The Personal Consumption Expenditures price index (PCE) rose 6% annually in October, lower than the annual increase of 6.3% in September. The monthly increase remained steady at 0.3%, same as the last two months. The core PCE which strips out volatile food and energy, also had a lower increase both monthly and annually. PCE is the Fed’s preferred inflation metric. Given the results, the Fed should be comfortable with a downshift pace of rate hike this month.
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‘Meet Kevin’ YouTuber Paffrath Launches ETF (2 min read)
Kevin Paffrath, a youtuber with nearly 2 million subscribers, has launched an ETF under his name. The Meet Kevin Pricing Power ETF (PP) is actively managed that holds stocks and ETFs focused on currencies and bonds. The ETF looks for profitable and sustainable companies that showed signs of pricing power to invest in. Kevin said he expects the first wave of investors to be his viewers. PP currently has $500,000 in assets with a management fee of 0.77%.
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This Year’s ETF Launches Trail 2021 (2 min read)
As of the end of November, there were 395 ETFs launched in the US this year which is just slightly behind compared to the same time last year. Equity-focused ETFs represent 57% of the launches, 20% were fixed income ETFs, and the remaining was a mix of other asset classes like inverse or commodity ETFs. The largest ETF launched this year was an ETF converted from a mutual fund, the Dimensional US Marketwide Value ETF (DFUV), with $8.2 billion in AUM.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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