The Conditions For China's Next Bull Market May Be Falling Into Place


terracotta warriors china qinWikimedia Commons

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors. 


The Conditions For A New Bull Market In China "Seem To Be Falling Into Place"  (Advisor Perspective) 

Financial stocks in China are surging relative to the broad market, which began back in November when the People's Bank of China cut policy rates for the first time since 2012. 

"Investors should keep close watch on FXI, the most liquid China-equity ETF. If our interest-rate thesis is correct, this bellwether index might soon break out from a three-year-old ascending triangle formation, generating an initial price objective of $56/share," writes Mark Ungewitter.

"The valuations plus monetary stimulus - seem to be falling into place. A technical breakout, however, is needed to confirm it," he adds.


Vanguard's Last Year Shows That Investors Are Falling For Passive Management (The Wall Street Journal)

"Investors gave stock pickers a resounding vote of no confidence in 2014, pouring $216 billion - a record inflow for any mutual-fund firm - into Vanguard Group, the biggest provider of index-tracking products," reports Kirsten Grind.

This reflects that larger trend of investors moving away from active managers in favor of passive managers.

Through December 29, about 74% of active stock funds in the US underperformed their category benchmarks, according to Morningstar. In the same time period, the S&P 500 gained 15.4%.

Investors Poured A Record $102.8 Billion Into BlackRock's ETF Funds (Reuters) 


"Investors poured $102.8 billion in new money into BlackRock Inc's exchange-traded funds in 2014, setting a record in global flows for its iShares ETF business," reports Ashley Lau.

Inflows into BlackRock accounted for 31% of the total new money added to the global ETF market in 2014. 

US-listed ETFs surpassed the $2 trillion in assets mark for the first time in December. BlackRock, along with other ETF providers such as Vanguard, have been beneficiaries of the growth.

Schorsch Has Resigned, But He's Not Gone Yet (InvestmentNews) 

Nicholas Schorsch stepped down from his role as chairman of both ARCP and RCAP, among other real estate investment trusts, but he is still "firmly entrenched in his array of real estate companies," reports Bruce Kelly.


Schorsch remains the chief executive and chairman of American Realty Capital Trust V Inc., a non-traded REIT, and is the largest single shareholder of RCAP stock - with 19.2 million (or 21.6%) shares.

Additionally, in a private conference call with executives last week, the CEO of RCAP stressed Schorsch's continued role in his empire, reports Kelly.

Small RIA Firms Should Keep These 3 Things In Mind To Grow (Financial Planning)

Small RIA firms (unsurprisingly) face efficiency and scale challenges, but there are three things that they can do grow better. First, when adding new clients, small RIA firms should define a target client and stick to it.

When it comes to hiring staff small firms should "embrace a long-term vision of roles and responsibilities - for all staff," writes David Canter, so that they can see how they fit in with the growth of the firm.


And finally, smalls should leverage technology to help with scale challenges, as well as improve the client experience for the next-generation of investors, writes Carter.