The Markets September 22, 2016

Money Market Fund Reform Expectations Played Out in August Trading

The bifurcation in demand within the money market fund space continued, Strategic Insight data shows.
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Net new flows to long-term mutual funds and exchange-traded products (ETPs) totaled $28.2 billion in August, according to Strategic Insight, parent company of PLANADVISER.

Active and passive strategies experienced divergent trends in net investments. Passive funds led demand with $42.1 billion (including $27.5 billion to ETPs), while actively managed funds experienced aggregate net redemptions of $14 billion in August.

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Taxable Bond funds saw the strongest demand among long-term funds, attracting $27.7 billion of net inflows. The space’s year-to-date flows of $146.3 billion represent a substantial increase over the $49.4 billion seen during the first eight months of 2015, Strategic Insight notes. Taxable Bond flows in August were fairly evenly split between active and passive strategies, as active funds experienced net investments of $14.7 billion and passive funds gathered net flows of $13 billion.

Active U.S. and International/Global Equity funds saw outflows of $35.6 billion in August, while index equity exposures attracted net inflows of $28.8 billion. Net outflows among active funds were driven by redemptions in large capitalization strategies. Non-Traditional strategies including Alternatives, Commodities, and Real Estate gathered positive net flows among active funds in August.

Net deposits into Money Market funds in August totaled $14.2 billion. The bifurcation in demand within this space continued, driven by the soon-to-be-enacted regulation. Taxable Money Market funds garnered $44.6 billion of net inflows, while Tax-Free Funds experienced $30.4 billion of net withdrawals. An even greater divergence continued to exist within the Taxable Money Market segment, as government money market funds saw net deposits of $150 billion in August while prime money market funds experienced net redemptions of $126 billion.

More about Strategic Insight is at www.strategic-i.com.

Products September 21, 2016

Cybersecurity Defense from Schwab Advisor Services

The firm announced availability of a new suite of resources and tools to help independent financial advisers develop, strengthen and maintain their cybersecurity defense. 
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A new cybersecurity defense program from Schwab Advisor Services promises to help financial professionals stay up-to-date on cyber-attack trends, regulatory developments and best practices for educating employees and clients about keeping data secure.

As part of its offering, Schwab is also releasing “action-oriented” tools to guide advisers through the cybersecurity planning process, available through a new online Cybersecurity Resource Center.

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According to the firm’s research, the new cybersecurity initiative comes at a time when preventing cyber-attacks is top of mind for the advisory industry, with almost 90% of independent financial professionals pointing to “cybersecurity, privacy and identity theft” as their top compliance concern for 2016.

Schwab’s Cybersecurity Resource Center features educational materials to guide advisers through the process and offers the opportunity for one-on-one consulting for firms with more complex needs. The content aligns with the National Institution of Standards and Technology (NIST) framework, which the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have encouraged.

More information is available at www.aboutschwab.com. 

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