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Franklin Templeton expands active thematic line-up with launch of ‘exponential data’ ETF

Franklin Templeton has expanded its line-up of actively managed thematic ETFs with the introduction of the Franklin Exponential Data ETF (XDAT US). The fund has listed on Cboe BZX Exchange and provides exposure to companies focused on or expected to benef

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Franklin Templeton has expanded its line-up of thematic ETFs with the introduction of the actively managed Franklin Exponential Data ETF (XDAT US) on Cboe BZX Exchange.

Franklin Templeton expands active thematic line-up with launch of 'exponential data' ETF

Matthew Moberg, CPA, Vice President & Portfolio Manager, Franklin Equity Group.

The fund invests in companies focused on or expected to benefit from the use of big data and/or the growth of data, including the creation, collection, cleaning, analyzing, storage, securing, transport, and/or sale of data.

This includes, but is not limited to, cloud computing, data analysis, new security techniques, optical fibre, 5G, and datacentre and tower infrastructure.

The fund may also include companies believed to represent new and innovative use cases for data, such as those benefitting from or facilitating artificial intelligence, machine learning, and augmented and virtual reality.

“We believe the coronavirus pandemic has driven a long-term, structural acceleration of data transformation, improving the quality of businesses,” said Patrick O’Connor, global head of ETFs for Franklin Templeton. “As data continues to become increasingly important in our economy, the launch of XDAT showcases our continued efforts to remain nimble and adapt to the trends and needs of our clients in an evolving marketplace.”

The fund is managed by Matthew Moberg and Joyce Lin, portfolio managers within Franklin Equity Group. Both are located near Silicon Valley and have many years of experience investing in innovation stocks. In selecting holdings for the fund, the managers make use of bottom-up fundamental research conducted by dedicated, industry-specific analysts to identify companies positioned to capitalize on the theme.

The fund has launched with 50 holdings. The weighted-average market capitalization of holdings is $191.6 billion, although companies in the $25-50bn market capitalization segment contribute the largest proportion with a weight 38.84%. Whilst the fund has a global mandate, including being able to invest in emerging markets, it exhibits a strong US bias with 89% of holdings currently coming from the US. Notable positions include Pinterest (5.06%), Alphabet (5.05%), Snap (4.82%), Facebook (4.64%), and Twitter (3.38%).

Matt Moberg, senior portfolio manager, said: “In our view, the rapid adoption of technological solutions during the pandemic is just the beginning. As we come to terms with how to live in a post-pandemic world, data is becoming essential to running a business, and those who manage it well have a competitive advantage, especially in the age of socially distancing.”

The fund has been seeded with $2.5m and comes with a net expense ratio of 0.50%. It is benchmarked for performance measurement purposes against the Russell 3000 Index.

XDAT becomes Franklin Templeton’s fourth active thematic ETF. The others are:

Franklin Disruptive Commerce ETF (BUYZ US)
BUYZ invests in companies benefitting from or facilitating advancements in emerging areas of the e-commerce space that are enabling more convenient, customized, secure and time-efficient transactions for both consumers and businesses.

Franklin Genomic Advancements ETF (HELX US)
HELX invests in companies benefitting from or facilitating advancements of new genomic-based research techniques and technologies designed to extend and enhance the quality of human and other life, driven by the advent of cost-effective and rapid gene sequencing.

Franklin Intelligent Machines ETF (IQM US)
IQM invests in companies benefitting from or facilitating advancements of machine learning technologies in areas like robotics, driverless vehicles and algorithmic data analysis.

European investors looking for a similar sort of exposure to Franklin’s new fund might want to investigate the Xtrackers Artificial Intelligence & Big Data UCITS ETF (XAIX GY, XAIX SW) from DWS.

Listed on Xetra and SIX Swiss Exchange, XAIX tracks the Nasdaq Yewno Artificial Intelligence and Big Data Index, reflecting the performance of large, mid and small-cap companies from global developed and emerging markets that have material exposure to artificial intelligence, data processing and data security. Up to 100 companies are selected for inclusion with stocks weighted equally.

The post Franklin Templeton expands active thematic line-up with launch of ‘exponential data’ ETF first appeared on ETF Strategy.

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US Stocks Extend Losses On China Smartphone News

US Stocks Extend Losses On China Smartphone News

US equity markets were already in puke mode following catastrophic earnings from WMT, TGT,…

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US Stocks Extend Losses On China Smartphone News

US equity markets were already in puke mode following catastrophic earnings from WMT, TGT, and a bunch of other retailers confirming the US consumer is about to implode, but headlines from Nikkei just sparked another leg lower.

According to Nikkei, China’s top smartphone makers - Xiaomi, Vivo, and Oppo - have told suppliers to scale back orders for the upcoming quarters by about 20% due to supply chain disruptions from the country’s Covid-19 lockdowns (i.e., demand has cratered).

Xiaomi, China's biggest smartphone maker and No. 3 globally, has told suppliers that it will lower its full-year forecast to around 160 million to 180 million units from its previous target of 200 million. Xiaomi shipped 191 million smartphones last year and is aiming to become the world's leading smartphone maker. The company could adjust its orders again as it continues to monitor the supply chain situation and consumer demand in its home market.

Meanwhile, Vivo and Oppo are also seeking to reduce excessive inventories. Vivo told suppliers it will not update specifications for key components to reduce costs.

The news sent futures into an (even faster) freefall, led by a 3.5% plunge in Nasdaq...

With AAPL down hard...

As stocks plunge, bonds are bid with yields tumbling 6-8bps across the curve, with 10Y once again unable to hold above 3.00%...

How much more pain is Powell willing to take?

Tyler Durden Wed, 05/18/2022 - 11:35

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Stocks

3 Nursing Home Stocks to Watch in 2022

By 2050, 22% of Americans will be seniors. The value of nursing home stocks should reflect that aging cohort. Keep reading to learn more.
The post 3 Nursing…

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No one ever said they want to spend the rest of their lives in a nursing home. Unfortunately, the reality is that’s where a significant portion of the elderly and disabled population end up. Demographically, about 16.5% of the American population is currently over 65. By 2050, 22%, or more than one out of five Americans will be seniors. The value of nursing home stocks should reflect that rapidly aging cohort.

The Eldercare Industry

The eldercare industry consists of various sectors. For instance, these include:

  • Independent living
  • Assisted living facilities
  • Skilled nursing facilities
  • Nursing homes

We’ll concentrate on companies whose primary business involves skilled nursing facilities and nursing homes. The difference between the two is that the former is a temporary residence for those undergoing medical rehabilitation, and the latter is a home for residents requiring 24/7 care. In fact, there is a fair degree of overlap between them.

Keep reading for more info on nursing home stocks.

No. 3 National HealthCare Corporation (NYSE: NHC)

Headquartered in Murfreesboro, Tennessee, National HealthCare Corporation operates 75 skilled nursing centers, 24 assisted living facilities, 35 home care agencies, 29 hospice agencies and five retirement communities. Other services include rehab facilities, senior care pharmacies, memory care and a hospital. NHC has been in business for 50 years. It’s the country’s oldest publicly-traded long-term healthcare company. Additionally, most of its facilities are located in the southeastern U.S.

In 2021, its net operating revenues and grant income totaled $1,074,302,000. That was an increase of 4.5% compared to 2020’s net operating revenues of $1,028,217,000. However, most of that increase was attributable to the June 2021 controlling equity acquisition of hospice provider Caris Healthcare.

As of May 17, 2022, the stock’s 52-week history ranges from a low of $61.89 to a high of $78.42. On May 5, the nursing home stock announced a 3.6% dividend increase for the second quarter over the first quarter of 2022.

No. 2 Omega Healthcare Investors (NYSE: OHI)

Omega Healthcare Investors is a triple net equity Real Estate Investment Trust (REIT). OHI has been investing in senior care for 30 years, providing capital for operators of skilled nursing facilities and assisted living facilities. It partners with 64 of “the most future-focused, growth-oriented” operators in the U.S. and U.K. The REIT has helped these operators accelerate their growth strategies via $1.45 billion in unsecured credit.

On May 2, 2022, the company announced results for the first quarter of 2022. Additionally, net income was $195.2 million or $0.79 per common share. CEO Taylor Pickett said OHI’s near-term Funds from Operations (FFO) and Funds Available for Distribution (FAD) financial results were affected by the nonpayment of rent by several operators. However, as the impact of the Omicron variant receded, portfolio occupancy improved as the quarter progressed. This nursing home stock declared a $0.67 per share cash dividend on common stock.

In the first quarter, OHI acquired 27 care homes in the U.K. for $100 million. Earlier in the quarter, it acquired three other U.K. care homes. Two were purchased for $8 million and the third for $5 million. It also bought a Maryland skilled nursing facility for $8.5 million in this period. Under its capital renovation and construction program, OHI invested $20 million in this quarter. Additionally, as of May 17, OHI’s 52-week range was $24.81 to $38.19.

No. 1 Sabra Health Care REIT (Nasdaq: SBRA)

Based in Irvine, California, and operating since 2010, Sabra Health Care REIT invests in skilled nursing facilities, behavioral health facilities, and senior housing throughout the U.S. and Canada. While there are Sabra-owned properties in 41 states, the bulk of its U.S. holdings is located in Texas and California. This nursing home stocks portfolio currently consists of 416 real estate properties for investment. For example, these include:

  • 279 Skilled nursing facilities
  • 59 Senior housing communities
  • 50 Senior housing communities operated by third-party managers
  • 13 Behavioral health facilities
  • 15 Specialty hospitals

Taken together, these investment properties total 41,445 beds or units.

According to its first-quarter 2022 earnings report, Sabra collected 99.5% of its forecasted rents from the beginning of the pandemic up to April 2022. While there were “initial headwinds” related to the Omicron variant, the company’s seven largest skilled nursing tenants saw sizable occupancy increases during this quarter. The company has approximately $1 billion in liquidity,

The company declared a quarterly cash dividend of $0.30 per share of common stock. In addition, as of May 17, the company’s 52-week range was $11.44 to $19.02.

Nursing Home Stocks Challenges

Nursing home residents were particularly vulnerable to COVID-19. Many of these elderly residents died during the earliest days of the pandemic. In addition, staffing shortages exacerbated the dire conditions in many nursing homes during this time. Due to long-term triple net leases, REITs were insulated to some degree, as long as operators continued to pay the rent.

There is also a move by the government to push private equity out of the skilled nursing sector. In 2021, 89% of the $3.7 billion spent on skilled nursing transactions involved private buyers. The view is that Wall Street’s acquisition of nursing home stocks was resulting in a lower quality of care and higher costs in nursing homes.

Nursing Home Stocks Considerations

By 2030, less than a decade from now, every Baby Boomer will be over 65. Those over 85, the group most likely to need nursing home care, is growing even faster. Although nursing home stocks were hit badly by the pandemic, the sheer number of elderly people and a caregiver deficit should mean such facilities are the only option for many in the near future.

The post 3 Nursing Home Stocks to Watch in 2022 appeared first on Investment U.

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Spread & Containment

Global Supply Chain Pressure Index: May 2022 Update

Supply chain disruptions continue to be a major challenge as the world economy recovers from the COVID-19 pandemic. Furthermore, recent developments related…

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Supply chain disruptions continue to be a major challenge as the world economy recovers from the COVID-19 pandemic. Furthermore, recent developments related to geopolitics and the pandemic (particularly in China) could put further strains on global supply chains. In a January post, we first presented the Global Supply Chain Pressure Index (GSCPI), a parsimonious global measure designed to capture supply chain disruptions using a range of indicators. We revisited our index in March, and today we are launching the GSCPI as a standalone product, with new readings to be published each month. In this post, we review GSCPI readings through April 2022 and briefly discuss the drivers of recent moves in the index.

More Stress on Supply Chains

The chart below provides an update of the GSCPI through April; readers can find a link to the updated data series on our new product page. Between December 2021 and March 2022, the index registered an easing of global supply chain pressures, though they remained at very high levels historically. However, the April 2022 reading suggests a worsening of conditions as renewed strains emerge in global supply chains.

April Data Indicate Worsening of Supply Chain Pressures

Sources: Bureau of Labor Statistics; Harper Petersen Holding GmbH; Baltic Exchange; IHS Markit; Institute for Supply Management; Haver Analytics; Bloomberg L.P.; authors’ calculations.

Note: Index is scaled by its standard deviation.

Methodology

Before analyzing this recent pickup in supply chain pressures, we remind readers that the GSCPI is based on two sets of data. Global transportation costs are measured by using data on ocean shipping costs, for we which we employ data from the Baltic Dry Index (BDI) and the Harpex index, as well as BLS airfreight cost indices for freight flights between Asia, Europe, and the United States. We also use supply chain-related components  of Purchase Manager Index (PMI) surveys—“delivery times,” “backlogs,” and “purchased stocks”—for manufacturing firms across seven interconnected economies: China, the euro area, Japan, South Korea, Taiwan, the United Kingdom, and the United States. Before combining these data within the GSCPI by means of principal component analysis, we strip out demand effects from the underlying series by projecting the PMI supply chain components on the “new orders” components of the corresponding PMI surveys and, in a similar vein, projecting the global transportation cost measures onto GDP-weighted “new orders” and “inputs purchased” components across the seven PMI surveys.

Sources of Pressure

So, what are the drivers behind recent moves in the GSCPI? The charts below illustrate how each of the underlying variables contributed to the overall change in the GSCPI in the last two months. Each column represents the contribution, in standard deviations, of each component of our index to the overall change in the index during a given period. In the first chart, we examine February-March 2022. We note that the lessening of supply chain pressures over this period was widespread across the various components, which indicated a welcome reduction in global supply chain disruptions. Most of the series in our data set declined over this period; the U.K. “backlog” component worsened and the U.S. “purchased stocks” component increased marginally.

Widespread Improvements Seen across Components in March 2022

Sources: Bureau of Labor Statistics; Harper Petersen Holding GmbH; Baltic Exchange; IHS Markit; Institute for Supply Management; Haver Analytics; Bloomberg L.P.; authors’ calculations.

In the chart below, we focus on the contributions of the underlying components of the GSCPI from March to April 2022.

Global Supply Chain Pressures Worsen in April 2022

Sources: Bureau of Labor Statistics; Harper Petersen Holding GmbH; Baltic Exchange; IHS Markit; Institute for Supply Management; Haver Analytics; Bloomberg L.P.; authors’ calculations.

As the chart indicates, the worsening of global supply chain pressures in April was predominantly driven by the Chinese “delivery times” component, the increase in airfreight costs from the United States to Asia, and the euro area “delivery times” component, as other components have eased over the month. These developments could be associated with the stringent COVID-19-related lockdown measures adopted in China, as well as the consequences of the Ukraine-Russia conflict for supply chains in Europe.

Finally, as we noted in our previous post and discuss on our product page, recent GSCPI readings are subject to revision. The chart below compares the current GSCPI release with the previous three releases, showing that revisions can have an impact up to a year back in time. The chart indicates that, based on the current vintage of the GSCPI, the decrease in global supply chain pressures through April occurred at a slighter faster pace than previous GSCPI estimates had suggested.

Revised and Realized Data Can Alter Previous Supply Chain Pressure Readings

Sources: Bureau of Labor Statistics; Harper Petersen Holding GmbH; Baltic Exchange; IHS Markit; Institute for Supply Management; Haver Analytics; Bloomberg L.P.; authors’ calculations.

Note: Index is scaled by its standard deviation.

Conclusions

In this post, we provide an update of the GSCPI through April 2022. This estimate suggests that the moderation we have observed in recent months has been partially reversed, as lockdown measures in China and geopolitical developments are putting further strains on delivery times and transportation costs in China and the euro area. Forthcoming readings will be particularly interesting as we assess the potential for these developments to further heighten global supply chain pressures.

Chart Data

Gianluca Benigno is the head of International Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.

Julian di Giovanni is head of Climate Risk Studies in the Bank’s Research and Statistics Group.

Jan J.J. Groen is an economic research advisor in the Bank’s Research and Statistics Group.

Adam Noble is a senior research analyst in the Bank’s Research and Statistics Group.

How to cite this post:
Gianluca Benigno, Julian Di Giovanni, Jan Groen, and Adam Noble, “Global Supply Chain Pressure Index: May 2022 Update,” Federal Reserve Bank of New York Liberty Street Economics, May 18, 2022, https://libertystreeteconomics.newyorkfed.org/2022/05/global-supply-chain-pressure-index-may-2022-update/.


Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

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