CAPIS Insights

99 total posts

CAPIS Supports Young Women’s Preparatory Network 2022 STEAM Challenge

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posted by CAPIS on 02/25/2022 at 10:56 am
by CAPIS on 02/25/2022

At CAPIS, we understand the importance of giving back. For years, participating in philanthropic events has been a part of our core values, we are proud to support organizations who specifically target improving the lives of women and children. In keeping with this tradition, CAPIS again will be making a financial contribution to the Young Women’s Preparatory Network (YWPN) and is a proud sponsor of its STEAM Challenge, an event designed to develop and teach concepts in science, technology, engineering and math through interactive activities, encouraging competition and community awareness. The 2022 YWPN STEAM Challenge will take place virtually and will be a fun-filled and educational day of team presentations of innovative STEAM ideas, friendly competition and community awareness. It will take place on Saturday, February 26, 2022, NorthPark Center, Dallas, Tx. Between 1-4 p.m. “CAPIS is a proud supporter of the Young Women’s Preparatory Network,” Ann Sebert, Chief Executive Officer at CAPIS said. “The support that YWPN provides for young women in our community is unparalleled and we are thrilled to be a part of their success. It’s all part of the CAPIS Difference – committing to great relationships in our community and not just in the financial industry.”…

At CAPIS, we understand the importance of giving back. For years, participating in philanthropic events has been a part of our core values, we are proud to support organizations who specifically target improving the lives of women and children. In keeping with this tradition, CAPIS again will be making a financial contribution to the Young Women’s Preparatory Network (YWPN) and is a proud sponsor of its STEAM Challenge, an event designed to develop and teach concepts in science, technology, engineering and math through interactive activities, encouraging competition and community awareness. The 2022 YWPN STEAM Challenge will take place virtually and will be a fun-filled and educational day of team presentations of innovative STEAM ideas, friendly competition and community awareness. It will take place on Saturday, February 26, 2022, NorthPark Center, Dallas, Tx. Between 1-4 p.m. “CAPIS is a proud supporter of the Young Women’s Preparatory Network,” Ann Sebert, Chief Executive Officer at CAPIS said. “The support that YWPN provides for young women in our community is unparalleled and we are thrilled to be a part of their success. It’s all part of the CAPIS Difference – committing to great relationships in our community and not just in the financial industry.”…

December Research Call RECAP: Equities Face Tough Road Amid Higher Volatility

CAPIS Insights

CAPIS Insights

posted by CAPIS on 02/17/2022 at 5:31 pm
by CAPIS on 02/17/2022

This article was penned by CAPIS   Last week we held our February research briefing, featuring Fairlead Strategies co-Founder Katie Stockton. Fairlead Strategies, LLC is a Connecticut-based independent advisory service providing unbiased technical analysis, helping investors manage risk and discover opportunities. Katie Stockton’s presentation addressed the following topics:   Market has Lost Upside Momentum Technical factors point to tougher year ahead; will be difficult to find value in stocks. After January turmoil, SPX points to long-term market exhaustion. FAANG mega-caps have entered a trading range and are showing downside leadership. MACD says market is not oversold just yet and potential for more corrective price action exists. Market Dynamic Resembles 2018 Experience Like in 2018, the market has re-entered a period of higher volatility with the VIX approaching the 50 level – right now holding around 40. Indicators point to weakened breath and created a challenging environment for stock trading. Hedging is advised with inverse ETFs and other esoteric instruments. Growth stocks are exhibiting downside leadership and point to an underweight recommendation. Value stocks will exhibit better performance moving ahead. Sectors to watch are Consumer Staples, Energy and Financials; all have broken to the upside. S. equities, while difficult to trade…

This article was penned by CAPIS   Last week we held our February research briefing, featuring Fairlead Strategies co-Founder Katie Stockton. Fairlead Strategies, LLC is a Connecticut-based independent advisory service providing unbiased technical analysis, helping investors manage risk and discover opportunities. Katie Stockton’s presentation addressed the following topics:   Market has Lost Upside Momentum Technical factors point to tougher year ahead; will be difficult to find value in stocks. After January turmoil, SPX points to long-term market exhaustion. FAANG mega-caps have entered a trading range and are showing downside leadership. MACD says market is not oversold just yet and potential for more corrective price action exists. Market Dynamic Resembles 2018 Experience Like in 2018, the market has re-entered a period of higher volatility with the VIX approaching the 50 level – right now holding around 40. Indicators point to weakened breath and created a challenging environment for stock trading. Hedging is advised with inverse ETFs and other esoteric instruments. Growth stocks are exhibiting downside leadership and point to an underweight recommendation. Value stocks will exhibit better performance moving ahead. Sectors to watch are Consumer Staples, Energy and Financials; all have broken to the upside. S. equities, while difficult to trade…

CASE STUDY Part 1: Outsourced Trading “Why Now? And Why One Size Does Not Fit All.”

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CAPIS Insights

posted by CAPIS on 02/02/2022 at 8:25 am
by CAPIS on 02/02/2022

This article was written by Martin Coughlan, CFA, CAIA. Martin has spent over twenty years working at asset management firms globally.    The investment management industry has benefited from a period of above average returns for over a decade. Period S&P 500 (Annualized Returns through 12/31/21) 3 Years 26.07% 5 Years 18.47% 7 Years 14.93% 10 Years 16.55%   This has counteracted the impact of negative net asset flows for many active managers. With central bank action, inflation and the broader impacts of the pandemic dominating the headlines from a macro perspective, most market commentators view more volatility and lower returns as the most probable scenario we will face in the coming years. In such an environment, most investment managers will need to analyze their business even more closely and ensure they are operating at maximum efficiency levels. While the concept of outsourcing functions is not new within the industry, historically the idea of outsourcing trading is something that managers have viewed as suitable for start-ups, and not for established firms. This view is now being challenged as there are examples of small, mid-sized and larger managers (up to $50bn) that have successfully transitioned to an outsourced trading model in…

This article was written by Martin Coughlan, CFA, CAIA. Martin has spent over twenty years working at asset management firms globally.    The investment management industry has benefited from a period of above average returns for over a decade. Period S&P 500 (Annualized Returns through 12/31/21) 3 Years 26.07% 5 Years 18.47% 7 Years 14.93% 10 Years 16.55%   This has counteracted the impact of negative net asset flows for many active managers. With central bank action, inflation and the broader impacts of the pandemic dominating the headlines from a macro perspective, most market commentators view more volatility and lower returns as the most probable scenario we will face in the coming years. In such an environment, most investment managers will need to analyze their business even more closely and ensure they are operating at maximum efficiency levels. While the concept of outsourcing functions is not new within the industry, historically the idea of outsourcing trading is something that managers have viewed as suitable for start-ups, and not for established firms. This view is now being challenged as there are examples of small, mid-sized and larger managers (up to $50bn) that have successfully transitioned to an outsourced trading model in…

Employee Spotlight – Eric Burt, Vice President, Outsourced Trading

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CAPIS Insights

posted by CAPIS on 01/31/2022 at 1:27 pm
by CAPIS on 01/31/2022

At CAPIS, we put relationships first. We think of our team as a family, which is why it is important for us to not only get to know each member but also shine a spotlight on them. We spoke with Eric Burt, Vice President, Outsourced Trading, who joined CAPIS in 2021. Take a look at our conversation below to learn about why he chose CAPIS after spending time on the buy-side as a trader with Fiera Capital and Ell Capital Management. He discusses some of the biggest challenges and successes he experienced during his career and the pandemic. [Note: This conversation has been edited for length and clarity. How did you get involved in trading and CAPIS? I broke into the business on the operations team at Glickenhaus and Company [a value manager in NYC].  My goal from day one was to move over to the trading desk as I felt that was where the action was, and I wanted desperately to obtain a ticket to the show. I worked towards my licenses and transitioned to the desk, ultimately earning the honor of trading for Seth Glickenhaus himself. I then transitioned to EII Capital Management. EII was a REIT firm that…

At CAPIS, we put relationships first. We think of our team as a family, which is why it is important for us to not only get to know each member but also shine a spotlight on them. We spoke with Eric Burt, Vice President, Outsourced Trading, who joined CAPIS in 2021. Take a look at our conversation below to learn about why he chose CAPIS after spending time on the buy-side as a trader with Fiera Capital and Ell Capital Management. He discusses some of the biggest challenges and successes he experienced during his career and the pandemic. [Note: This conversation has been edited for length and clarity. How did you get involved in trading and CAPIS? I broke into the business on the operations team at Glickenhaus and Company [a value manager in NYC].  My goal from day one was to move over to the trading desk as I felt that was where the action was, and I wanted desperately to obtain a ticket to the show. I worked towards my licenses and transitioned to the desk, ultimately earning the honor of trading for Seth Glickenhaus himself. I then transitioned to EII Capital Management. EII was a REIT firm that…

January Research Briefing RECAP: MPP Says FOMC Hawks Rule Roost  

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CAPIS Insights

posted by CAPIS on 01/25/2022 at 8:24 am
by CAPIS on 01/25/2022

Last week, we held our January research briefing, featuring special guest speakers John Fagan and Brendan Walsh, co-founders of Markets Policy Partners (MPP). MPP is a Washington, D.C.-based independent advisory service that informs clients on matters at the intersection of markets and policy, and in the public sector. Click here for a video of the research call   MPP’s presentation addressed the following topics: Federal Reserve Firmly Hawkish [3:08] MPP said the hawkish members of the Federal Open Market Committee are overly committed to fighting inflation. Fear of future supply shocks and rising consumer prices linger as concerns about the impact of Omicron remain. [3:20] Interest rate hikes are imminent, with discussions ranging from four to six hikes. The market, MPP says, is “way too hawkish” at the moment, and the March meeting and its subsequent policy statement bear close scrutiny. [6:25] Investors should not “fade the Fed” just yet and wait until the March policy meeting to make a call. [7:10] Energy as a Weapon [8:54]            Geopolitical risk remains at very high levels with there being tremendous uncertainty regarding oil-producing countries – like Nigeria, Khazakstan, and Russia. The first half of the year will see countries use oil as…

Last week, we held our January research briefing, featuring special guest speakers John Fagan and Brendan Walsh, co-founders of Markets Policy Partners (MPP). MPP is a Washington, D.C.-based independent advisory service that informs clients on matters at the intersection of markets and policy, and in the public sector. Click here for a video of the research call   MPP’s presentation addressed the following topics: Federal Reserve Firmly Hawkish [3:08] MPP said the hawkish members of the Federal Open Market Committee are overly committed to fighting inflation. Fear of future supply shocks and rising consumer prices linger as concerns about the impact of Omicron remain. [3:20] Interest rate hikes are imminent, with discussions ranging from four to six hikes. The market, MPP says, is “way too hawkish” at the moment, and the March meeting and its subsequent policy statement bear close scrutiny. [6:25] Investors should not “fade the Fed” just yet and wait until the March policy meeting to make a call. [7:10] Energy as a Weapon [8:54]            Geopolitical risk remains at very high levels with there being tremendous uncertainty regarding oil-producing countries – like Nigeria, Khazakstan, and Russia. The first half of the year will see countries use oil as…

ADVISORY NOTICE: HKEX Announces Change in FRC Transaction Fees Effective Jan 1, 2022

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posted by CAPIS on 12/24/2021 at 11:05 am
by CAPIS on 12/24/2021

Please see Trading Notice Below from the Hong Kong Stock Exchange Contact our trading desk for further information on the proper booking of stamp duties, taxes, and fees in international stocks at 866.349.6216 or intl@capis.com Subject: FRC Transaction Levy of .00015% for a new combined rate of .13785%. General The following fees apply to each security transaction1: Brokerage2 Effective 1 April 2003, the brokerage of security transactions becomes freely negotiable between brokers and their clients. SFC Transaction Levy Effective 1 November 2014, a SFC Transaction Levy of 0.0027% (rounded to the nearest cent) is charged per side of the consideration of a transaction, and the amount is collected for the SFC. There is no SFC Transaction Levy on Securities Market Maker (SMM) transactions. To simplify operations with a unified basis for fee calculation for transactions in non-Hong Kong dollar currencies, the Exchange will adopt the same exchange rates as for stamp duty calculation purpose for calculating SFC Transaction Levy if applicable. Investor Compensation Levy Effective 19 December 2005, the payment of Investor Compensation Levy (i.e. 0.002% per side of the consideration of a transaction, rounded to the nearest cent) has been suspended by the SFC. To simplify operations with a…

Please see Trading Notice Below from the Hong Kong Stock Exchange Contact our trading desk for further information on the proper booking of stamp duties, taxes, and fees in international stocks at 866.349.6216 or intl@capis.com Subject: FRC Transaction Levy of .00015% for a new combined rate of .13785%. General The following fees apply to each security transaction1: Brokerage2 Effective 1 April 2003, the brokerage of security transactions becomes freely negotiable between brokers and their clients. SFC Transaction Levy Effective 1 November 2014, a SFC Transaction Levy of 0.0027% (rounded to the nearest cent) is charged per side of the consideration of a transaction, and the amount is collected for the SFC. There is no SFC Transaction Levy on Securities Market Maker (SMM) transactions. To simplify operations with a unified basis for fee calculation for transactions in non-Hong Kong dollar currencies, the Exchange will adopt the same exchange rates as for stamp duty calculation purpose for calculating SFC Transaction Levy if applicable. Investor Compensation Levy Effective 19 December 2005, the payment of Investor Compensation Levy (i.e. 0.002% per side of the consideration of a transaction, rounded to the nearest cent) has been suspended by the SFC. To simplify operations with a…

December Research Call RECAP: Long Term Technicals Says Market is Overbought, Expect Defensive Rotation

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CAPIS Insights

posted by CAPIS on 12/20/2021 at 11:12 am
by CAPIS on 12/20/2021

  Last week we held our December research call, featuring Fairlead Strategies Co-Founder Katie Stockton. Fairlead Strategies, LLC is a Connecticut-based independent advisory service providing unbiased technical analysis, helping investors manage risk and discover opportunities.     Katie Stockton’s presentation addressed the following topics:   SPX is in Final Resistance after Positive FOMC Reaction:  Long-term momentum remains positive since 2020, but expect resistance according to MACD indicators. (4:55) Despite some improvement in short-term gauges, a January correction could be coming. (6:00) The market may be moving out of a relatively low-volatility cycle during first quarter 2022. (6:29) Large-cap growth has been a source of outperformance compared to a small-cap slump. (6:44) Market Appears Exhausted While the “Santa Claus” rally is in play, stocks appear “tired” and are overbought, according to DeMark Stockton is waiting until January to hedge and reduce exposures ahead of expected Q1 volatility. (7:34) Expect further corrective price action in January. (8:00) The VIX is stuck in a 20-28 range, but a move through 28 would indicate a volatility breakout and heightened risk. (9:35) Market breadth has contracted. (10:41)   Sector Rotation Afoot Sector rotation has indicated a shift from technology & discretionary stocks to defensive securities –…

  Last week we held our December research call, featuring Fairlead Strategies Co-Founder Katie Stockton. Fairlead Strategies, LLC is a Connecticut-based independent advisory service providing unbiased technical analysis, helping investors manage risk and discover opportunities.     Katie Stockton’s presentation addressed the following topics:   SPX is in Final Resistance after Positive FOMC Reaction:  Long-term momentum remains positive since 2020, but expect resistance according to MACD indicators. (4:55) Despite some improvement in short-term gauges, a January correction could be coming. (6:00) The market may be moving out of a relatively low-volatility cycle during first quarter 2022. (6:29) Large-cap growth has been a source of outperformance compared to a small-cap slump. (6:44) Market Appears Exhausted While the “Santa Claus” rally is in play, stocks appear “tired” and are overbought, according to DeMark Stockton is waiting until January to hedge and reduce exposures ahead of expected Q1 volatility. (7:34) Expect further corrective price action in January. (8:00) The VIX is stuck in a 20-28 range, but a move through 28 would indicate a volatility breakout and heightened risk. (9:35) Market breadth has contracted. (10:41)   Sector Rotation Afoot Sector rotation has indicated a shift from technology & discretionary stocks to defensive securities –…

Commission Recapture for CITs – Does it Still Work?

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CAPIS Insights

posted by CAPIS on 12/10/2021 at 11:31 am
by CAPIS on 12/10/2021

This article was penned by CAPIS Answer:  Maybe   With commission rates at historic lows, it seems reasonable to believe that commission recapture is no longer viable.  However, most investment managers rely on commissions to acquire research, providing the basis for the commission recapture discussion. At its core, Commission Recapture is a discounting mechanism for full-service/research rates and can be an effective strategy for reducing commission costs.  In 2004, the SEC recognized the value of commission recapture programs stating, “Foregoing an opportunity to seek lower commission rates, to use brokerage to pay custodial, transfer agency and other fund expenses, or to obtain any available cash rebates, is a real and meaningful cost to fund shareholders.” SEC Release No. IC-26356.  But do recapture programs still work today? To find the answer, one must analyze the brokerage statistics for each sub-advised CIT.  Funds that trade at sub-penny rates are generally not viable candidates for recapture and internally managed CITs tend to avoid directing themselves.  Using a standard commission management template, we can identify the average cents per share (cps) and the percentage of “full-service” commissions, identified below using 2.0 cps or greater. Based on the data above, the Sector Rotation and the…

This article was penned by CAPIS Answer:  Maybe   With commission rates at historic lows, it seems reasonable to believe that commission recapture is no longer viable.  However, most investment managers rely on commissions to acquire research, providing the basis for the commission recapture discussion. At its core, Commission Recapture is a discounting mechanism for full-service/research rates and can be an effective strategy for reducing commission costs.  In 2004, the SEC recognized the value of commission recapture programs stating, “Foregoing an opportunity to seek lower commission rates, to use brokerage to pay custodial, transfer agency and other fund expenses, or to obtain any available cash rebates, is a real and meaningful cost to fund shareholders.” SEC Release No. IC-26356.  But do recapture programs still work today? To find the answer, one must analyze the brokerage statistics for each sub-advised CIT.  Funds that trade at sub-penny rates are generally not viable candidates for recapture and internally managed CITs tend to avoid directing themselves.  Using a standard commission management template, we can identify the average cents per share (cps) and the percentage of “full-service” commissions, identified below using 2.0 cps or greater. Based on the data above, the Sector Rotation and the…

November Research Call RECAP: DataTrek Delves Into Expensive U.S. Equity Valuations

CAPIS Insights

CAPIS Insights

posted by CAPIS on 11/22/2021 at 12:25 pm
by CAPIS on 11/22/2021

This article was penned by CAPIS   Last week CAPIS held its November research call, featuring Nicholas Colas and Jessica Rabe, Co-Founders of DataTrek Research. DataTrek is a New York-based independent research service providing unbiased data analysis, helping investors make the investment process more profitable, robust, and efficient.   Click here for a video of the research call Colas and Rabe’s presentation addressed the following topics:   U.S. Equity Valuations (3:22) Colas opened saying U.S. equities are “super expensive,” explaining U.S. equities are trading at 19 times earnings. (3:58) Currently, the Case Shiller Price/Earnings ratio is at 40 times earnings – extraordinarily high compared to its average of 17. The last time the CS ratio hit 40 times earnings was in 1999 during the dot-com bubble.  (4:25) Valuations, while high, make sense. S&P 500 net margins are holding around 13%, above the average of 10% to 11% — “wildly higher than any other point in history.” The normal range is between 7% and 9%. These levels are sustainable. (6:25) Part of the reason is the heavy weighting of Big Tech companies (FAANG, Tesla, Microsoft, etc.) and their higher profitability and reinvestment in their core businesses. (9:22) Given this cash surplus…

This article was penned by CAPIS   Last week CAPIS held its November research call, featuring Nicholas Colas and Jessica Rabe, Co-Founders of DataTrek Research. DataTrek is a New York-based independent research service providing unbiased data analysis, helping investors make the investment process more profitable, robust, and efficient.   Click here for a video of the research call Colas and Rabe’s presentation addressed the following topics:   U.S. Equity Valuations (3:22) Colas opened saying U.S. equities are “super expensive,” explaining U.S. equities are trading at 19 times earnings. (3:58) Currently, the Case Shiller Price/Earnings ratio is at 40 times earnings – extraordinarily high compared to its average of 17. The last time the CS ratio hit 40 times earnings was in 1999 during the dot-com bubble.  (4:25) Valuations, while high, make sense. S&P 500 net margins are holding around 13%, above the average of 10% to 11% — “wildly higher than any other point in history.” The normal range is between 7% and 9%. These levels are sustainable. (6:25) Part of the reason is the heavy weighting of Big Tech companies (FAANG, Tesla, Microsoft, etc.) and their higher profitability and reinvestment in their core businesses. (9:22) Given this cash surplus…

October Research Call RECAP: MPP Sees China Economic Slog While U.S. Makes Progress 

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CAPIS Insights

posted by CAPIS on 10/26/2021 at 11:56 am
by CAPIS on 10/26/2021

This article was penned by CAPIS   Last week, we held our October research call, featuring special guest speakers John Fagan and Brendan Walsh, co-founders of Markets Policy Partners (MPP). MPP is a Washington, D.C.-based independent advisory service that informs clients on matters at the intersection of markets and policy, and in the public sector.   Click here for a video of the research call   MPP’s presentation addressed the following topics:   China Malaise Continues MPP said China will continue its common prosperity theme and the government will continue to take more control of data and technology. [5:40] On the Evergrande fiasco, the government will continue to protect retail property investors and quell unrest. [8:25] Equities in China are “dead money” and better value is to be had elsewhere right now. Chinese markets will start their recovery in 2022 but the journey will not be an easy or pretty process. Overall, the consultancy is not positive on China, however, MPP did note that there are no systemic worries like the 2007 US financial crisis and an implosion of its economy shouldn’t happen. [10:40] U.S. Inflation Outlook Recent FOMC minutes are encouraging and support the beginning of the tapering process.…

This article was penned by CAPIS   Last week, we held our October research call, featuring special guest speakers John Fagan and Brendan Walsh, co-founders of Markets Policy Partners (MPP). MPP is a Washington, D.C.-based independent advisory service that informs clients on matters at the intersection of markets and policy, and in the public sector.   Click here for a video of the research call   MPP’s presentation addressed the following topics:   China Malaise Continues MPP said China will continue its common prosperity theme and the government will continue to take more control of data and technology. [5:40] On the Evergrande fiasco, the government will continue to protect retail property investors and quell unrest. [8:25] Equities in China are “dead money” and better value is to be had elsewhere right now. Chinese markets will start their recovery in 2022 but the journey will not be an easy or pretty process. Overall, the consultancy is not positive on China, however, MPP did note that there are no systemic worries like the 2007 US financial crisis and an implosion of its economy shouldn’t happen. [10:40] U.S. Inflation Outlook Recent FOMC minutes are encouraging and support the beginning of the tapering process.…

CAPIS RECAP – Select Highlights from the 88th Annual STA Conference

CAPIS Insights

CAPIS Insights

posted by CAPIS on 10/13/2021 at 9:22 am
by CAPIS on 10/13/2021

  This article was penned by CAPIS   Were you able to attend last week’s 88th Annual Security Traders Association Annual Conference in Washington D.C.? Curious about the topics and discussions that took place? CAPIS was there for the first in-person industry-wide STA confab since 2019 and presents a collection of select highlights and tidbits from the event.   Panel: Competitive Landscape between Brokers & Exchanges Panelists: Joe Mecane, Citadel Securities & Jonathan Kellner, MEMX Moderator: Kimberly Russell, SSGA SSGA’s Russell – this year we saw days with levels of off exchange trading rising over 50 percent. MEMX’s Kellner said he would like to see more trading flow come on exchange. He noted the importance of the public quote. Mecane said Citadel wants Rule 605 reform but there are a number of issues “in the weeds” which results in Rule 605 underestimated price improvement.   Panel: Industry Update on T+1 Settlement Panelists: John Abel, DTCC & Bob Walley, Deloitte Moderator: Tom Price, SIFMA DTCC’s Abel said T+0 means either real time gross settlement or end of day settlement – and there is scant interest for real time gross settlement.   Interview: Doug Cifu, CEO, Virtu Financial Moderator: Tim Mahoney, Former…

  This article was penned by CAPIS   Were you able to attend last week’s 88th Annual Security Traders Association Annual Conference in Washington D.C.? Curious about the topics and discussions that took place? CAPIS was there for the first in-person industry-wide STA confab since 2019 and presents a collection of select highlights and tidbits from the event.   Panel: Competitive Landscape between Brokers & Exchanges Panelists: Joe Mecane, Citadel Securities & Jonathan Kellner, MEMX Moderator: Kimberly Russell, SSGA SSGA’s Russell – this year we saw days with levels of off exchange trading rising over 50 percent. MEMX’s Kellner said he would like to see more trading flow come on exchange. He noted the importance of the public quote. Mecane said Citadel wants Rule 605 reform but there are a number of issues “in the weeds” which results in Rule 605 underestimated price improvement.   Panel: Industry Update on T+1 Settlement Panelists: John Abel, DTCC & Bob Walley, Deloitte Moderator: Tom Price, SIFMA DTCC’s Abel said T+0 means either real time gross settlement or end of day settlement – and there is scant interest for real time gross settlement.   Interview: Doug Cifu, CEO, Virtu Financial Moderator: Tim Mahoney, Former…

Virtual Panel RECAP: Transition Management Analytics – What Really Matters?

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CAPIS Insights

posted by CAPIS on 10/05/2021 at 12:57 pm
by CAPIS on 10/05/2021

This article was penned by CAPIS Last week CAPIS held its latest virtual panel, featuring panelists Tom Schoenbeck (Aon Investments), Phil Jandora (Willis Towers Watson), and CAPIS’ own Bryan Gibbs and Ben Jenkins. The discussion focused on the value and purpose of Transition Management reporting at the post-trade and pre-trade levels. Click here for a video of the virtual panel   The presentation addressed the following topics: Post Trade (4:50 – 17:10) Strategy and implementation are important, but equally is the transparency of reporting. (5:14) When looking at a Transition event start at the 30,000 foot level and drill down as needed (6:05) Highlight trade execution and quality (ex: avoid “lazy trading”) (7:10) From a consultant’s perspective, post-trades are used to validate costs and the TM provider’s execution and strategy (8:27) Tendency to focus on total execution (e.g., close to mean cost estimate), but consultants’ job is to really understand what drove performance (“good” or “bad”). (8:50) Time spent on a post-trade is important – validate performance and align or confirm expectations amongst all parties (client, consultant, TM provider). (10:50)   Pre Trade (18:10 – 26:10) Sometimes seeing multiple strategies can be overwhelming. Usually the best (maybe, two) strategies make…

This article was penned by CAPIS Last week CAPIS held its latest virtual panel, featuring panelists Tom Schoenbeck (Aon Investments), Phil Jandora (Willis Towers Watson), and CAPIS’ own Bryan Gibbs and Ben Jenkins. The discussion focused on the value and purpose of Transition Management reporting at the post-trade and pre-trade levels. Click here for a video of the virtual panel   The presentation addressed the following topics: Post Trade (4:50 – 17:10) Strategy and implementation are important, but equally is the transparency of reporting. (5:14) When looking at a Transition event start at the 30,000 foot level and drill down as needed (6:05) Highlight trade execution and quality (ex: avoid “lazy trading”) (7:10) From a consultant’s perspective, post-trades are used to validate costs and the TM provider’s execution and strategy (8:27) Tendency to focus on total execution (e.g., close to mean cost estimate), but consultants’ job is to really understand what drove performance (“good” or “bad”). (8:50) Time spent on a post-trade is important – validate performance and align or confirm expectations amongst all parties (client, consultant, TM provider). (10:50)   Pre Trade (18:10 – 26:10) Sometimes seeing multiple strategies can be overwhelming. Usually the best (maybe, two) strategies make…

September Research Call RECAP: DataTrek Says Market Recovery Steady as Few Disruptions Seen

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General

posted by CAPIS on 09/21/2021 at 10:26 am
by CAPIS on 09/21/2021

This article was penned by CAPIS Last week CAPIS held its September research call, featuring Nicholas Colas and Jessica Rabe, Co-Founders of DataTrek Research. DataTrek is a New York-based independent research advisory service providing unbiased data analysis, helping investors make the investment process more profitable, robust, and efficient. Click here for a video of the research call Colas and Rabe’s presentation addressed the following topics: Millennial Investors Resemble Day Traders and Are Here to Stay (3:11) Colas opened with a statistic from Robinhood: the favored trading app for younger investors has reached 18 million funded user accounts but has not grown further since its peak in January 2021. (4:06) The retail trader nowadays buys market dips — rather than a more traditional buy-and-hold strategy. (6:05) These newer investors’ trading behavior isn’t novel as it resembles the day traders of yore – buying at the open and selling at the close. On the macro level, these types of traders will not disrupt the capital markets. (6:22) These nascent market participants favor environmental, social, and governance (ESG) investing, causing firms like BlackRock to ramp up product offerings to address the shift in investor priorities. (7:37) They also favor companies they can understand…

This article was penned by CAPIS Last week CAPIS held its September research call, featuring Nicholas Colas and Jessica Rabe, Co-Founders of DataTrek Research. DataTrek is a New York-based independent research advisory service providing unbiased data analysis, helping investors make the investment process more profitable, robust, and efficient. Click here for a video of the research call Colas and Rabe’s presentation addressed the following topics: Millennial Investors Resemble Day Traders and Are Here to Stay (3:11) Colas opened with a statistic from Robinhood: the favored trading app for younger investors has reached 18 million funded user accounts but has not grown further since its peak in January 2021. (4:06) The retail trader nowadays buys market dips — rather than a more traditional buy-and-hold strategy. (6:05) These newer investors’ trading behavior isn’t novel as it resembles the day traders of yore – buying at the open and selling at the close. On the macro level, these types of traders will not disrupt the capital markets. (6:22) These nascent market participants favor environmental, social, and governance (ESG) investing, causing firms like BlackRock to ramp up product offerings to address the shift in investor priorities. (7:37) They also favor companies they can understand…

CAPIS Hires Eric Burt for Outsourced Trading Team

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posted by CAPIS on 09/17/2021 at 12:56 am
by CAPIS on 09/17/2021

DALLAS (September 17, 2021) – Capital Institutional Services, Inc. (“CAPIS”), an independent broker-dealer serving institutional investors, announced today that it has hired Eric Burt as Vice President and Trader on its Outsourced Trading desk. Prior to CAPIS, Burt was Head of Equities and Senior Trader with Fiera Capital. Before Fiera, he was Head Trader and Managing Director of EII Capital Management for 16 years. Eric graduated from Villanova University with a degree in History and Political Science. He maintains Series 7, 57, and 63 licenses. “Eric possesses all of the unique skills of a buy-side trading veteran along with the technical savvy to quickly learn and master our order management systems,” said Chris Hurley, CAPIS Director of Institutional Sales and Head of Outsourced Trading. “He covers accounts the way he liked to be covered during his tenure on the buy-side. Eric is a great fit and we look forward to a long and mutually beneficial relationship with him and his clients.” “I’m delighted to be joining the CAPIS family and a deep bench of traders that work tirelessly for the clients of the firm,” said Burt. “Joining the outsourced trading team allows me the opportunity to leverage 25 years of buy-side…

DALLAS (September 17, 2021) – Capital Institutional Services, Inc. (“CAPIS”), an independent broker-dealer serving institutional investors, announced today that it has hired Eric Burt as Vice President and Trader on its Outsourced Trading desk. Prior to CAPIS, Burt was Head of Equities and Senior Trader with Fiera Capital. Before Fiera, he was Head Trader and Managing Director of EII Capital Management for 16 years. Eric graduated from Villanova University with a degree in History and Political Science. He maintains Series 7, 57, and 63 licenses. “Eric possesses all of the unique skills of a buy-side trading veteran along with the technical savvy to quickly learn and master our order management systems,” said Chris Hurley, CAPIS Director of Institutional Sales and Head of Outsourced Trading. “He covers accounts the way he liked to be covered during his tenure on the buy-side. Eric is a great fit and we look forward to a long and mutually beneficial relationship with him and his clients.” “I’m delighted to be joining the CAPIS family and a deep bench of traders that work tirelessly for the clients of the firm,” said Burt. “Joining the outsourced trading team allows me the opportunity to leverage 25 years of buy-side…

August Research Call RECAP: Fairlead Strategies Says Market Technicals Favor Bulls

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General

posted by CAPIS on 08/25/2021 at 8:50 am
by CAPIS on 08/25/2021

Last week we held our August research call, featuring Fairlead Strategies Co-Founder Katie Stockton. Fairlead Strategies, LLC is a Connecticut-based independent advisory service providing unbiased technical analysis, helping investors manage risk and discover opportunities. Click here for a video of the research call Our own David Choate, COO and Executive Director of Trading and Sales, updated attendees about CAPIS’ daily Morning Holdings email which provides information on certain symbols. The email software sweeps information services at 6:30 am and can be accessed through CAPIS’ sales team. CAPIS continues to provide other high-quality digital content such as The Morning Note and commentary on its website.  (2:00) Katie Stockton’s presentation addressed the following topics: SPX and NDX Hovering at All Time Highs: According to Stockton, the S&P 500 index (SPX is in a long-term uptrend. There is room for improvement in the daily stochastic indicators she watches, but the market could hit 4600 by year-end. (5:20) As for the Nasdaq 100 (NDX), there’s been a loss of strength in the FAANG complex and there have been rotational pullbacks in the high-growth and cyclical sectors. This, she said, makes it difficult for portfolios to outperform if not exposed to the sector in favor at…

Last week we held our August research call, featuring Fairlead Strategies Co-Founder Katie Stockton. Fairlead Strategies, LLC is a Connecticut-based independent advisory service providing unbiased technical analysis, helping investors manage risk and discover opportunities. Click here for a video of the research call Our own David Choate, COO and Executive Director of Trading and Sales, updated attendees about CAPIS’ daily Morning Holdings email which provides information on certain symbols. The email software sweeps information services at 6:30 am and can be accessed through CAPIS’ sales team. CAPIS continues to provide other high-quality digital content such as The Morning Note and commentary on its website.  (2:00) Katie Stockton’s presentation addressed the following topics: SPX and NDX Hovering at All Time Highs: According to Stockton, the S&P 500 index (SPX is in a long-term uptrend. There is room for improvement in the daily stochastic indicators she watches, but the market could hit 4600 by year-end. (5:20) As for the Nasdaq 100 (NDX), there’s been a loss of strength in the FAANG complex and there have been rotational pullbacks in the high-growth and cyclical sectors. This, she said, makes it difficult for portfolios to outperform if not exposed to the sector in favor at…

Eliminating Trade Rotation

CAPIS Insights

CAPIS Insights

posted by CAPIS on 08/18/2021 at 3:57 am
by CAPIS on 08/18/2021

Part Three of the Three Part Series (click here for Part One and Two)   In the previous two blog posts we examined the existence and resilience of trade rotation and how to quantify the impacts on performance.  Today’s question…”How can we eliminate rotation?” If you analyzed the impact of rotation and concluded that it makes sense to consider ways to eliminate the practice, what is the next step?   Step One Renegotiate trade away fees:  In many cases, we have seen custodians reduce and even eliminate trade away fees.  In a recent roundtable discussion, David Krebs,  provided his perspective and advice. “RIAs and Outsourced Trading: What You Need to Navigate the Markets.” Step Two Solve for the operational complexities:  While some advisers have been able to use internal staff and technology solutions, others have found third party middle office providers to be helpful, such as Archer IMS, SEI, and STP Investment Partners. Step Three Trade reporting and settlement:  Understanding that most wrap/custodial sponsors require a net price, step outs have routinely been used to report trades to the sponsors.  Unfortunately, most step outs will require the executing broker’s compensation to be in the form of a markup/down of which…

Part Three of the Three Part Series (click here for Part One and Two)   In the previous two blog posts we examined the existence and resilience of trade rotation and how to quantify the impacts on performance.  Today’s question…”How can we eliminate rotation?” If you analyzed the impact of rotation and concluded that it makes sense to consider ways to eliminate the practice, what is the next step?   Step One Renegotiate trade away fees:  In many cases, we have seen custodians reduce and even eliminate trade away fees.  In a recent roundtable discussion, David Krebs,  provided his perspective and advice. “RIAs and Outsourced Trading: What You Need to Navigate the Markets.” Step Two Solve for the operational complexities:  While some advisers have been able to use internal staff and technology solutions, others have found third party middle office providers to be helpful, such as Archer IMS, SEI, and STP Investment Partners. Step Three Trade reporting and settlement:  Understanding that most wrap/custodial sponsors require a net price, step outs have routinely been used to report trades to the sponsors.  Unfortunately, most step outs will require the executing broker’s compensation to be in the form of a markup/down of which…

Is Trade Rotation a Problem Worth Fixing?

CAPIS Insights

CAPIS Insights

posted by CAPIS on 08/10/2021 at 11:08 am
by CAPIS on 08/10/2021

This is Part Two of a Three Part Series (Click here for Part One:  “What are the Barriers to Eliminating Trade Rotation”)   In this second blog on trade rotation, we ask the question…”Does it makes sense to overcome the barriers and eliminate trade rotation?” Step One:  Examine your specific situation.   This is a classic cost versus benefit analysis. Do your trades take minutes, hours or days? Do you notice a difference between execution venues? Do you pay commissions to brokers that provide research? Do you have performance differences among your accounts?   Step Two:  Quantifying the Costs Market Impact, Information Leakage and Opportunity Costs:  As we all know, liquidity characteristics drive trading costs.  While S&P500 stocks trade like water, small and mid-cap stocks can be extremely difficult to trade.  According to a leading TCA vendor, the average cost of an institutional order is -19.3 bps from Arrival Price.  Assuming linear impact, the last fill will be ~38 bps worse than the first fill.  These numbers quickly increase as liquidity needs increase.  In a rotation format, the last challenge is to give everyone an equal opportunity to feel the pain of going last. Execution Venues:  Using the same data source,…

This is Part Two of a Three Part Series (Click here for Part One:  “What are the Barriers to Eliminating Trade Rotation”)   In this second blog on trade rotation, we ask the question…”Does it makes sense to overcome the barriers and eliminate trade rotation?” Step One:  Examine your specific situation.   This is a classic cost versus benefit analysis. Do your trades take minutes, hours or days? Do you notice a difference between execution venues? Do you pay commissions to brokers that provide research? Do you have performance differences among your accounts?   Step Two:  Quantifying the Costs Market Impact, Information Leakage and Opportunity Costs:  As we all know, liquidity characteristics drive trading costs.  While S&P500 stocks trade like water, small and mid-cap stocks can be extremely difficult to trade.  According to a leading TCA vendor, the average cost of an institutional order is -19.3 bps from Arrival Price.  Assuming linear impact, the last fill will be ~38 bps worse than the first fill.  These numbers quickly increase as liquidity needs increase.  In a rotation format, the last challenge is to give everyone an equal opportunity to feel the pain of going last. Execution Venues:  Using the same data source,…

Is Trade Rotation a Problem Worth Fixing?

CAPIS Insights

CAPIS Insights

posted by CAPIS on 08/10/2021 at 10:03 am
by CAPIS on 08/10/2021

Part Two of a Three Part Series (Click here for Part One:  “What are the Barriers to Eliminating Trade Rotation”) In this second blog on trade rotation, we ask the question…”Does it makes sense to overcome the barriers and eliminate trade rotation?” Step One:  Examine your specific situation.   This is a classic cost versus benefit analysis. Do your trades take minutes, hours or days? Do you notice a difference between execution venues, i.e. sponsors/custodians. Do you pay commissions to brokers that provide research? Do you have performance differences among your accounts?   Step Two:  Quantifying the Costs Market Impact, Information Leakage and Opportunity Costs:  As we all know, liquidity characteristics drive trading costs.  While S&P500 stocks trade like water, small and mid-cap stocks can be extremely difficult to trade.  According to a leading TCA vendor, the average cost of an institutional order is -19.3 bps from Arrival Price.  Assuming linear impact, the last fill will be ~38 bps worse than the first fill.  These numbers quickly increase as liquidity needs increase.  In a rotation format, the last challenge is to give everyone an equal opportunity to feel the pain of going last. Execution Venues:  Using the same data source, while…

Part Two of a Three Part Series (Click here for Part One:  “What are the Barriers to Eliminating Trade Rotation”) In this second blog on trade rotation, we ask the question…”Does it makes sense to overcome the barriers and eliminate trade rotation?” Step One:  Examine your specific situation.   This is a classic cost versus benefit analysis. Do your trades take minutes, hours or days? Do you notice a difference between execution venues, i.e. sponsors/custodians. Do you pay commissions to brokers that provide research? Do you have performance differences among your accounts?   Step Two:  Quantifying the Costs Market Impact, Information Leakage and Opportunity Costs:  As we all know, liquidity characteristics drive trading costs.  While S&P500 stocks trade like water, small and mid-cap stocks can be extremely difficult to trade.  According to a leading TCA vendor, the average cost of an institutional order is -19.3 bps from Arrival Price.  Assuming linear impact, the last fill will be ~38 bps worse than the first fill.  These numbers quickly increase as liquidity needs increase.  In a rotation format, the last challenge is to give everyone an equal opportunity to feel the pain of going last. Execution Venues:  Using the same data source, while…

Why Does Trade Rotation Still Persist?

CAPIS Insights

CAPIS Insights

posted by CAPIS on 08/02/2021 at 11:12 am
by CAPIS on 08/02/2021

Part One of a Three Part Series   In a recent online poll, we asked equity managers in the wrap/custodial space: “What is the biggest barrier to aggregating orders and trading away from these platforms?”  While 15% responded that they already traded away, a full 85% provided reasons for the continuation of the rotation process. For the uninitiated, trade rotation is the process whereby orders are executed in a set rotation or queue, rather than being executed in a single block. Trade rotation has historically been the default process employed by institutional managers sub-advising wrap/custodial assets.  However, most managers would agree that executing a single block would be preferred. Barriers solving the trade rotation issue: Operational complexities (45%):  The most common reason cited was operational complexities.  If you manage assets on wrap/custodial platforms, you know how time-consuming it can be to “work up” an order.  If you manage assets on multiple platforms this task can become a job in itself.  Now consider how you would consolidate these orders, trade away, report transaction details and provide the necessary disclosure…Operational complexities are real. Trades away fees (30%):  The fact is that some wrap/custodial platforms still charge fees to trade away.   While some…

Part One of a Three Part Series   In a recent online poll, we asked equity managers in the wrap/custodial space: “What is the biggest barrier to aggregating orders and trading away from these platforms?”  While 15% responded that they already traded away, a full 85% provided reasons for the continuation of the rotation process. For the uninitiated, trade rotation is the process whereby orders are executed in a set rotation or queue, rather than being executed in a single block. Trade rotation has historically been the default process employed by institutional managers sub-advising wrap/custodial assets.  However, most managers would agree that executing a single block would be preferred. Barriers solving the trade rotation issue: Operational complexities (45%):  The most common reason cited was operational complexities.  If you manage assets on wrap/custodial platforms, you know how time-consuming it can be to “work up” an order.  If you manage assets on multiple platforms this task can become a job in itself.  Now consider how you would consolidate these orders, trade away, report transaction details and provide the necessary disclosure…Operational complexities are real. Trades away fees (30%):  The fact is that some wrap/custodial platforms still charge fees to trade away.   While some…

VIDEO: The Morning Note Tutorial

CAPIS Insights

CAPIS Insights

posted by CAPIS on 07/21/2021 at 3:24 pm
by CAPIS on 07/21/2021

The CAPIS Morning Note provides daily professionally written, insightful and actionable commentary right to your email box. This brief video tutorial explains the various sections of the Note – highlighting key sections and items that can either assist in making trading decisions or just simply keep you informed.      

The CAPIS Morning Note provides daily professionally written, insightful and actionable commentary right to your email box. This brief video tutorial explains the various sections of the Note – highlighting key sections and items that can either assist in making trading decisions or just simply keep you informed.      

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