The Janus Capital bond guru believes that German debt is representing a huge opportunity.» Read More
There are now more hedge funds than ever.
Investors have the choice of an estimated 10,149 hedge funds and funds of hedge funds as of March 31, according to new data from industry research firm HFR. That surpasses the previous high of 10,096 set in 2007 before the financial crisis. About 1,040 new funds launched in 2014, a net addition of 176 compared with ones that closed.
Total industry assets are $2.94 trillion, another all-time high, despite relatively muted single-digit returns from most hedge funds last year.
"Investors continue to turn to hedge funds, despite disappointing performance in 2014," said Eric Tedd, head of hedge fund research at Guggenheim Investment Advisors.
"They offer more attractive risk adjusted return potential than traditional asset classes," Tedd said in an email, noting relatively low bond yields and high stock valuations.
Five years after launching his own investment firm, Jeff Gundlach is on top of the bond world.
Gundlach, famously fired by Trust Company of the West in December 2009, took dozens of employees with him and launched DoubleLine Capital that same month.
His flagship DoubleLine Total Return Bond Fund—launched in April 2010 amidst a nasty legal battle with TCW—has grown to manage $46 billion. The fund has posted stronger returns than every other U.S. intermediate bond fund since its inception.
Add products like a stock-focused mutual fund, mortgage-backed security-heavy hedge fund strategies, and a fixed income exchange-traded fund, and overall assets have rocketed to $73 billion as of March 31.
"Thanks to the investor and advisor communities, and the hard work by our risk management and investment teams, DoubleLine has enjoyed extraordinary growth over the last 5 years," Loren Fleckenstein, an analyst at the Los Angeles-based firm, told CNBC.com.
Amid a slowing economy and wobbly financial markets, investors have tamped down their expectations for when the Federal Reserve will start hiking interest rates.
They may have further to go.
Despite some recent saber rattling from Fed officials, the potential for 2015 to pass by without monetary policy tightening becomes greater when looking inside some of the metrics the central bank policymakers use when formulating their decisions.
Take the unemployment rate.
Much debate has occurred over the years regarding what is the "real" rate of unemployment—whether it's the headline rate the Bureau of Labor Statistics trumpets each month when it releases the nonfarm payrolls report, or if it is a number buried far deeper in the report that provides a broader picture.
Like some who work in finance, Forrest Xiao wasn't fulfilled despite making a lot of money.
But unlike many frustrated employees, the 25-year-old New York-area hedge fund employee decided to make a big change: He quit.
"I've become more and more obsessed with making money, in part because I've used it as a measure of myself," Xiao wrote in a farewell email to AQR Capital Management colleagues in March, as first reported by hedge fund news site Absolute Return. "I worry that I've lost the sense of purpose that I once felt, the desire to help the world in some meaningful way."
Too-big-to-fail banks, instead of getting smaller, are pretty much taking over the financial universe.
The largest five banks in the U.S. now control nearly 45 percent of the industry's total assets, according to an analysis from SNL Financial that comes amid an earnings season that has been generally positive for the largest institutions. (Tweet this)
In total, the five institutions—JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and U.S. Bancorp—had just under $7 trillion in total assets as of the end of 2014. That's good for 44.61 percent of the industry total. It also leaves the other 55.4 percent of the assets to be divided up among 6,504 other institutions. Banks had total assets of just over $15 trillion at year's end, a number that has grown to about $15.3 trillion in 2015, according to the Federal Reserve.
The world of diamonds might become more interesting beyond the scope of engagements and weddings.
Diamond prices have tumbled almost 15 percent over the past 12 months and that has Nicholas Colas, chief market strategist at Convergex, eyeing a larger trend. (Tweet this)
"The reason all this intrigues me is not as a prospective shopper, but rather because the price of 'Commodity' diamonds is a very good case study in macroeconomic deflationary pressures," Colas said in a report for clients.
The decline in diamond prices can be attributed to several factors, he said, including reduced consumer demand from China, India and Japan. But companies that turn raw stones into polished gems are also facing financial pressure as banks are less willing to lend. Slower demand, tighter capital requirements and too little inflation "is causing a slow-motion inventory shrink and pushing prices lower," Colas said.
Much of the U.S. stock market's meteoric rise over the past six years has been predicated on an acronym that Wall Street refers to as TINA—There Is No Alternative.
The subtext is that with the U.S. moving faster than much of its counterparts around the globe, and with its central bank in extreme, unprecedented easing mode, there simply was no place else to grow money except on American shores.
2015 has seen the light start to dim on the U.S. bull market and shine more brightly in some unlikely corners of the world, like Russia, Israel and Japan. European stocks have staked their claim as new world leaders, and China and Japan equities have ripped higher as well.
Investors have taken notice in a big way, giving TINA some competition by spreading their money around the world.
Funds that focus on global equities have taken in $81.5 billion this year, a pace that, if continued, would break a record for four-month inflows in the category, according to data research firm TrimTabs. Thanks to a record $7.8 billion in European funds, March inflows are at $34.8 billion, also a single-month record, with April already showing a $14.8 billion inflow total. (The totals include mutual and exchange-traded products.)
"U.S. investors continue to follow the printing presses into European and Japanese equities," TrimTabs CEO David Santschi said in a statement that referenced central bank largess in those regions. "A record that has been held for nine years is almost sure to fall."
Flows, as they most often do, have followed performance.
The S&P 500 U.S. large-cap index has been a global laggard, registering just a 1.8 percent gain so far this year. U.S. small-caps have performed much better, with the Russell 2000 registering a 5.1 percent gain, but even that move is well behind many other global indexes.
Activist investors became targets themselves Monday when protesters briefly took over a conference focused on how to shake up companies.
About 20 protesters interrupted a lunchtime panel discussion at the 13D Monitor Active-Passive Investor Summit in New York, chanting slogans like "hedge fund billionaires, pay your fair share!"
They called out well-known activist investors like Bill Ackman of Pershing Square Capital Management and Jeff Smith of Starboard Value, both slated to speak at the event later Monday, urging $15 an hour for low-level workers.
One sign read "Dignitiy at Darden," which Smith's Starboard Value is a major investor in. Ackman's Pershing Square was until recently a major Burger King investor.
"Bill Ackman, Jeff Smith, show us $15!" was briefly chanted.
"This is what democracy looks like!" they added later in the Crowne Plaza Times Square ballroom.
Exchange-traded funds have surged in popularity in 2015, but it's not U.S. equities that are leading the charge.
Investors poured $97.2 billion into various ETFs and other similar products in the first quarter, marking the $2.9 trillion industry's biggest start ever despite a wobbly U.S. stock market and a testy geopolitical climate, according to data from BlackRock, the world's largest provider of such funds. (U.S.-based ETFs have about $2.1 trillion in assets.)
There essentially have been three major investment themes this year, and players in the exchange-traded market have made each work: A quest for investment themes outside the U.S.; the offshoot of that, which has seen domestic attention turn away from large caps and toward mid- and small-sized companies, and capitalizing on the big moves in currency markets, particularly an appreciation of the U.S. dollar and the decline of its global competitors. The greenback has gained 7 percent so far against a trade-weighted basket of other leading currencies.
Some $59 billion has found its way into products that focus on currency hedging, according to ETF.com, which said the group represented four or the top 10 funds for investor flows during the first three months of the year.
Other big developments in March saw investors clamoring for developed international markets, with $14.8 billion flowing to European funds and $8.3 billion to Japanese equities. U.S.-focused funds trailed, with $6.2 billion in inflows, according to BlackRock.
In total, the month saw $32.6 billion go to non-U.S. developed markets, a total that matched the previous two months combined and was especially remarkable considering that 2014 closed with a huge run toward U.S. equities. The fourth quarter saw total inflows to all exchange-traded products at a record $138 billion, with the largest focus toward domestic large-cap.
Every year, the Federal Reserve takes it upon itself to conduct stress tests of the nation's biggest banks, measuring them for how well they would hold up under the weight of another crisis the likes of which engulfed the financial system in 2008 and 2009.
The results purport to give a clear picture of the financial system's health.
What's less clear, though, is how the Fed itself would hold up under similar circumstances. Rather than subject the Fed to a closet-cleaning audit, as is the desire of Rand Paul, the Republican senator and presidential candidate, a more instructive move could be a stress test of whether the central bank could meet its responsibilities in the event of another crisis. (Tweet this)
The Fed, of course, would be highly unlikely to fail a bank-type stress test per se. However, it could come up considerably short in terms of the ammunition it would need to help the financial system deal with another major crisis caused by an unforeseen event. With interest rates already at zero and the central bank's balance sheet bloated, through quantitative easing, to $4.5 trillion, the Fed's cupboard is currently pretty bare as far as easing ingredients go.
The stress test parameters, of course, would be different for a Fed stress test: The central bank doesn't take customer deposits or make loans to anyone other than its member institutions. And there is one other major difference between it and a commercial bank: The Fed can simply print money whenever it wants, so it doesn't ever have to worry about being illiquid.
This institution does, though, serve a vital role both for the banking industry and the economy as a whole. It uses the policies within its purview to help steady financial conditions in times of crisis, in addition to meeting its dual mandate of price stability and full employment.
Over the past 6 ½ years, the Fed's two weapons of choice have been printing money, or more precisely, creating it digitally, to buy up various securities including U.S. Treasurys and mortgage-backed securities; and keeping its short-term target funds rate near zero.
The Janus Capital bond guru believes that German debt is representing a huge opportunity.
The stock market may be having a roller-coaster year, but you won't find many screaming investors riding the tracks.
The Department of Justice is charging futures trader Navinder Singh Sarao with fraud related to the "flash crash," reports CNBC's Sue Herera.