By Corina Pons, Luc Cohen and Mayela Armas

CARACAS (Reuters) – Three small investment funds have started buying defaulted Venezuelan bonds as hopes of a change of government are fading and the South American nation is proposing a restructuring, according to sources and documents.

Canaima Capital Management, headquartered on the English Channel island of Guernsey, Uruguay-based Copernico and Cayman Islands-based Altana have bought heavily discounted bonds with face value of hundreds of millions of dollars, according to eight finance industry sources in Caracas, New York, Miami, Madrid and London.

The funds appear to be part of a small group of contrarian investors bucking the broader market consensus, which maintains there is little value in Venezuelan bonds that have not been serviced in nearly three years amid an economic crisis.

The funds believe it is time to act and to evaluate legal options instead of waiting for a friendly negotiation with allies of Juan Guaido, who is recognized by more than 50 countries as Venezuela’s interim president, even though he still hasn’t taken power.

The funds argue investors may be unable to recover missed interest payment after 2020 due to a statute of limitations clause in the bonds’ covenants – an assertion flatly denied by the main committee for Venezuela creditors.

Nonetheless, the efforts to amplify these concerns has fueled nervousness and increased the willingness of bondholders to sell their notes, according to four Venezuelan finance industry sources.

Altana, which two sources said was offering to buy bonds this year, has already taken legal action against Venezuela to try to force payment. In an Oct. 8 complaint filed with the United States District Court for the Southern District of New York, the fund demanded payment from Venezuela on $108 million of defaulted bonds.

That came after investment funds Casa Express and

The Ford Foundation announced $180 million in new grant funding for U.S. racial justice and civil rights groups, the organizations large and small who are doing essential work to address systemic racism and support full democratic inclusion. This latest funding doubles the Foundation’s existing commitments in the civil justice arena to $330 million.



Darren Walker wearing a hat


© Michael Loccisano—Getty Images


This latest allocation has been made possible by a deft use of capital markets—unprecedented in philanthropic history. In June, the Foundation announced its plan to borrow $1 billion in social bonds to increase its grant-giving capacity at a time when mission-critical organizations large and small are losing revenue due to the coronavirus.

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“What was creative was figuring out a way to increase our giving while not diminishing the current value of our endowment,” Ford Foundation president Darren Walker tells Fortune.

He recalls the time in March and April when the Foundation was facing a confluence of issues, including a “very choppy” market: “I’m sitting in my apartment in New York watching the panic in the market and in what was happening in the nonprofit sector. So many nonprofits canceling their fundraisers, canceling their fees, and pulling back on their programs. Panic in the sector. So we knew we needed to step up.”

The IRS requires philanthropies to pay out five percent of their endowment, which may be acceptable in good times. “The problem is there is the inverse relationship between returns and need,” says Walker. “When the market’s going down, it’s usually when these needs are going up.”

Not to mention, the endowment itself. Ford’s endowment, currently $13.7 billion, lost $3 billion in the volatility of 2008. “We were paying out five percent of a much smaller denominator,” he says.

The breakthrough came from the Federal Reserve. 

“Fortunately, [Federal Reserve] chairman

Adds details, background

LONDON, Oct 9 (Reuters)Bond funds have seen the second-largest weekly inflows ever of $25.9 billion, BofA said on Friday, as the market continues to price in a Democrats victory in next month’s U.S. presidential election, which could mean even more fiscal stimulus.

“Blue wave election outcome (Democrats winning) has curiously flipped from consensus bear to bull catalyst in recent months,” the U.S. investment bank said.

Riskier high yield bond funds attracted $5 billion in the week to Oct. 7, the highest in 11 weeks, while government bond funds sucked in $3.8 billion, the largest inflows in 14 weeks.

Equity funds, meanwhile, attracted $4.4 billion, mainly driven by U.S. equities, BofA said, adding it expected the “top” in asset prices to come between U.S. election day on Nov. 3 and the inauguration of the new president in January 2021.

In the fourth quarter, it expects banks, energy and small cap stocks to rally, and 10-year Treasury bond yields to rise to 1%.

The bank also highlighted the likelihood of renewable energy stocks front-running a Democratic victory in presidential and Congressional elections, plus more fiscal stimulus, pointing to one solar energy exchange traded fund’s stellar performance.

Invesco solar ETF TAN.P has soared 255% from its March lows and gained 42% in the last month alone.

“A ‘blue wave’ clean sweep which could see Dems in control of the Oval, Senate and House is seeing money pile into renewables”, a London-based trader said.

(Reporting by Thyagaraju Adinarayan; Editing by Tommy Wilkes and Mark Potter)

((thyagaraju.adinarayan@tr.com; +44 20 7542 7015; Reuters Messaging: thyagaraju.adinarayan.thomsonreuters.com@reuters.net; Twitter @thyagu))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source Article

LONDON, Oct 9 (Reuters)Bond funds saw the second-largest weekly inflows ever of $25.9 billion, BofA said on Friday, as the market continues to price in a Democratic sweep in next month’s presidential election, which could mean even more fiscal stimulus.

“Blue wave election outcome (Democrats winning) has curiously flipped from consensus bear to bull catalyst in recent months,” the U.S. investment bank said.

Equity funds attracted $4.4 billion, mainly driven by U.S. equities, BofA said. Government and U.S. Treasury bond funds sucked in $3.8 billion, the largest inflows in 14 weeks, in the week to Oct. 7.

The bank also highlighted the likelihood of renewable energy stocks front-running a Democratic election sweep that was followed by a fiscal stimulus, pointing to one solar energy exchange traded fund’s stellar performance.

Invesco solar ETF TAN.P soared 255% from its March lows and has gained 42% in the last month alone. “A ‘blue wave’ clean sweep which could see Dems in control of the Oval, Senate and House is seeing money pile into renewables”, a London-based trader said.

(Reporting by Thyagaraju Adinarayan Editing by Tommy Wilkes)

((thyagaraju.adinarayan@tr.com; +44 20 7542 7015; Reuters Messaging: thyagaraju.adinarayan.thomsonreuters.com@reuters.net; Twitter @thyagu))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source Article

What just happened?

It’s The Trump Show and we’re just living in it. From the shocking news that the president tested positive for coronavirus and was checked into the Walter Reed National Military Medical Center for three nights, to his proclamation that there would be no fiscal stimulus, to his next-day reversal, President Donald Trump dominated the talk in markets over the past week.

We covered the ups, and the downs, for airline and travel-focused ETFs: a lot of turbulence, you might say. Also, the materials sector started to strengthen, and financials jumped as markets began to price in a Democratic sweep that could boost fiscal spending and reflate yields.

That’s reflected in weekly fund flows, shown at the bottom of this page. Bond funds sold off, but bank funds rallied.

Thanks for reading.

“A fascinating time to be an active manager”

A fund that launched in 2019 is having a terrific 2020. The Hoya Capital Housing ETF
HOMZ
initially branded itself as the only ETF to cover the entire housing market ecosystem, from builders to realtors to REITs to Home Depot. But it was struggling to gather assets. So in August, the fund’s founder, Alex Pettee, rebranded it to more directly compete with the two better-known “homebuilder” ETFs, the SPDR S&P Homebuilders ETF
XHB
and the iShares U.S. Home Construction ETF
ITB,
both of which also are laden with stocks that aren’t homebuilders.

Among ETFs that picked up the most incoming money last month, there was only one actively managed fund in the top 20: ARK Invest’s flagship fund, the Innovation ETF
ARKK.
For all the recent excitement about “semitransparent” ETFs and “active non-transparent” ETFs, ARK’s founder, Cathie Wood, an unabashed and active stock picker, just happens to prefer the transparency that good old-fashioned ETFs provide.

MarketWatch