{"id":27355,"date":"2015-01-02T19:58:28","date_gmt":"2015-01-03T00:58:28","guid":{"rendered":"http:\/\/prefblog.com\/?p=27355"},"modified":"2015-01-02T19:58:28","modified_gmt":"2015-01-03T00:58:28","slug":"january-2-2015","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=27355","title":{"rendered":"January 2, 2015"},"content":{"rendered":"

The loonie got out of the wrong side of bed this year<\/a>:<\/p>\n

The loonie plunged to a level not seen in more than five years Friday amid a strengthening U.S. greenback and weaker crude oil prices.<\/p>\n

The Canadian dollar ended the day down 1.18 cents at 85.02 cents (U.S.), The last time it closed below this level was on May 15, 2009.<\/p>\n

The currency finished 2014 down about 8 per cent or 7.8 cents against the American currency compared with where it began the year.<\/p><\/blockquote>\n

It’s in a race with oil<\/a>:<\/p>\n

Oil dropped to the lowest in more than five and a half years amid growing supply from Russia and Iraq and signs of manufacturing weakness in Europe and China.<\/p>\n

Futures capped a sixth weekly loss in New York and London. Oil output in Russia and Iraq surged to the highest levels in decades in December, according to data from both countries\u2019 governments. Euro-area factory output expanded less than initially estimated in December. A manufacturing gauge in China, the world\u2019s second-largest oil consumer, fell to the weakest level in 18 months, government data showed yesterday.<\/p>\n

Prices slumped 46 percent in New York in 2014, the steepest drop in six years and second-worst since trading began in 1983, as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share. OPEC pumped above its quota for a seventh month in December even as U.S. output expanded to the highest in more than three decades, according to data compiled by Bloomberg.<\/p><\/blockquote>\n

What I need is a gimmick<\/a>:<\/p>\n

So-called \u201csmart beta\u201d funds, the fastest-growing segment of the exchange-traded fund market, are sold as index funds but are actively – sometimes frenetically – traded portfolios that can whipsaw investors and often fail to deliver the outsized returns their issuers promote.<\/p>\n

Over the last one- and three-year periods, they have on average lagged their plain-vanilla counterparts in almost every highly competitive category, according to an analysis performed for Reuters by ETF.com, a research firm. Along the way, many have turned over their portfolios two and three times a year and undershot their own specialized benchmarks by significant margins.<\/p>\n

Yet they have become a magnet for investor dollars, pulling in 60 cents of every dollar flowing to ETFs over the last two years, according to Morningstar.<\/p><\/blockquote>\n

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts gaining 8bp, FixedResets down 10bp and DeemedRetractibles off 2bp. The modest numbers masked an impressive amount of volatility, but volume was virtually non-existent.<\/p>\n

For as long as the FixedReset market is so violently unsettled, I\u2019ll keep publishing updates of the more interesting and meaningful series of FixedResets\u2019 Implied Volatilities. This doesn\u2019t include Enbridge because although Enbridge has a large number of issues outstanding, all of which are quite liquid, the range of Issue Reset Spreads is too small for decent conclusions. The low is 212bp (ENB.PR.H; second-lowest is ENB.PR.D at 237bp) and the high is a mere 268 for ENB.PF.G.<\/p>\n

Remember that all rich \/cheap assessments are:<\/p>\n