Good Morning All,

My phone woke me up at midnight pinging that the US Govt had agreed on the $2T stimulus package….I scratch my head – not due size but the time – why did the alert get triggered at midnight? Where was the senate hanging out? Did they have to refresh the Guinness tap? What did they type of pork roll sandwich did they sneak into the bill? …Speaking of pork roll sandwich – it’s almost breakfast time….that’s a South Jersey/Philly thing – it terrible for you and a lovely breakfast sandwich with eggs….< insert pause to let the ending comment really sink in>.

Asia had big gains off the US rally…Europe is staying positive…S&P futures are off about 1% ( a mere drop in the bucket)….if anybody wants to flip a coin for today’s market, it might just land on its edge.

Interesting news – the Fed hired BlackRock to help manage the corporate debt buyback program. Makes sense but sounds like it is going to be loaded with LQD!

I attached a quick read about Active Fund holding Fixed Income ETFs as a liquid sleeve (I hope ya’ll see the irony of this).  By reflecting what was actually happening in the markets, fixed income ETFs dislocation(deep discounts vs NAV) was the Fed’s direct line of reference for credit turmoil.  My immediate take away: when thinking about active mutual fund competitors, it is important to look under the hood not just at the fund level data. Funds hide risk by barbelling or laddering credit – don’t be tricked by slight of hand.  When the competitive analysis are done, Matt Starr looks under the hood to help point out differences in allocations…..Another take away: It is refreshing to see such good quality commentary!

FlexShares Competitor Report is out there.  Please let us know if there is additional information that will help you. Durations was added to Fixed Income ETFs (where it was possible).

Cap Mkt is around all day if anyone has any questions or need help.  Have a fantastic day and we’ll be back for the afternoon wrap up

Thanks

Dan Madden

Head of ETF Capital Markets at FlexShares, managed by Northern Trust

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