Visualizing the Search Patterns of Investors
When investors need to quench their thirst for the latest news or knowledge, they turn to the all-knowing power of Google.
Whether it is something as simple as searching for “S&P 500 today” or it’s more of an information-finding mission to discover the “Best Dividend Paying Mutual Fund”, search data provides an interesting lens with which to view the topics investors are focused on.
Investor Search Data
Today’s infographic comes to us from New York Life Investments, and it shows investor searches for various investment-related keyphrases by month.
The data starts in January 2017 and goes until November 2018, giving an almost two-year picture into investor search patterns. It enables us to see macro trends of which searches are becoming more popular, as well as a window into certain time periods in which behavior changed dramatically.
Not only can we see increases or decreases in searches for specific keyphrases year-over-year, but we can also see how patterns changed when the market went into corrections or saw increased levels of volatility.
The Macro Picture
Here is a data-driven look at wider categories of search phrases, showing which terms saw the biggest increases or decreases year-over-year.
|Category: Investment Strategy||Biggest Changes in Search Volume (2017-2018*)|
|Balanced investment strategy||+200%|
|Maximum diversification portfolio||+120%|
|Define investment portfolio||-57%|
|Aggressive investment portfolio||-71%|
*Data for 2018 goes until November only.
In terms of general investing strategy, it seems investors were increasingly looking at how to build a “balanced” strategy, rather than having an “aggressive” allocation. The latter was much more popular in 2017.
|Category: Generic||Biggest Changes in Search Volume (2017-2018*)|
|Short term investment definition||-21%|
*Data for 2018 goes until November only.
Looking at more generic keyphrases, people have been increasingly looking for “simple” investments.
|Category: Mutual Funds||Biggest Changes in Search Volume (2017-2018*)|
|Large cap index||+400%|
|S&P 500 index today||+340%|
|Growth mutual funds||+53%|
|Absolute return funds||-38%|
|Small cap value fund||-56%|
*Data for 2018 goes until November only.
Investors looked more for “large cap index”, as well as the current status of the S&P 500. Further, they wanted to know less about “Growth mutual funds”, “Absolute return funds”, and “Small cap value funds”.
|Category: ETFs||Biggest Changes in Search Volume (2017-2018*)|
|Money market ETF||+140%|
|Emerging markets value ETF||+88%|
|Short term bond ETF||+82%|
|Smart beta ETF||-21%|
|Define exchange traded fund||-38%|
*Data for 2018 goes until November only.
Lastly, on the ETF front, investors wanted to know more about “Money market ETF” as well as “Emerging markets value ETF” and “Short term bond ETF”. On the opposite side, fewer investors needed to know the definition of an exchange traded fund.
China: An Investment Opportunity Too Big To Ignore
In 2020, China will lift the restrictions on foreign ownership, creating a significant investment opportunity that cannot be ignored.
Since the implementation of the initial Open Door Policy in 1978, China has experienced rapid development—making it the world’s second largest economy in nominal terms.
In the next year, the country will move into the next phase of opening up its economy by lifting restrictions on the foreign ownership of securities, insurance, and fund management firms, and this will make the economy more accessible to the outside world than ever before.
An Opportunity Too Big To Ignore
Today’s infographic from BlackRock explores the steps China’s markets have taken to attract foreign capital on a global scale.
China’s moves are funding the nation’s next stage of growth, and are also creating new investment opportunities for foreign investors.
The China Investment Opportunity
Currently, foreign investors hold just 3% of total Chinese securities, despite the country having the world’s second largest stock and bond market globally.
As the onshore equity and fixed income markets open up, investors have the opportunity to gain exposure to more sectors, particularly those that focus on the domestic economy.
China’s large consumption base of 1.3 billion consumers is a powerful engine of growth, with consumer spending increasing to $4.7 trillion in 2017, from $3.2 trillion in 2012.
Ensuring Sustainable Growth
There are structural reform gaps that need to be addressed in order to ensure China’s growth is sustainable.
These reforms, which seek to correct imbalances caused by uneven economic growth, cover many areas of the economy. They affect the government, as well as corporate, financial and household sectors.
Some of these key reforms include:
- Capital reallocation: Debt reduction and interest rate liberalisation
- Income redistribution: Property, household and corporate tax reduction
- Market regulation: Supply-side reform and environmental protection
- Institutional framework: Intellectual property protection, and reformation of the hukou— China’s registration program, which serves to regulate population distribution and rural-to-urban migration
With 22 reforms currently in progress, the long-term impact is expected to be tremendously positive for growth.
Opening Up the Great Wall
China has shown great support for economic globalisation, and has already been making strides to open its markets to the rest of the world.
- 2002: Qualified Foreign Institutional Investor (QFII) scheme launches
- 2011: Renminbi Qualified Foreign Institutional Investor (RQFII) scheme launches
- 2014: Shanghai/Hong Kong Stock Connect launches
- 2016: Shenzhen/Hong Kong Stock Connect launches
- 2017: Bond Connect scheme launches
- 2018: MSCI announces 20% inclusion factor of A-shares
- 2019: Bloomberg Barclays Global Aggregate Index begins including yuan-denominated bonds
- 2020: JPMorgan Chase & Co. plans to add Chinese government debt to index
These index inclusions will result in a substantial inflow of new investor funds. According to Goldman Sachs, Bloomberg’s decision to increase the weighting of Renminbi-denominated government and policy bank securities in the Bloomberg Barclays Global Aggregate Index could attract between $120-$150 billion in new investments into Chinese debt markets.
New China vs. Old China
China has transformed from an export-driven and rural country, into a global manufacturing and technology superpower.
Foreign direct investment (FDI) inflows into China’s tech sector have been rising significantly, and currently account for almost a third of total FDI.
China already has the world’s largest robot market, and the government is actively promoting the robotics industry with tax reductions and special R&D funding.
—Victoria Mio, CIO Chinese Equities, Robeco
China’s ambitious “Made in China 2025” ten year plan will lower its dependency on imported technology and make China a dominant player in global technology manufacturing.
An Economic Force To Be Reckoned With
China will inevitably face challenges as it proceeds to lead global economic growth. However, its changing economy is creating a new landscape of opportunity for potential growth, and may continue to do so for the coming years.
The continuous expansion of market access, combined with new policies that promote foreign investment, have helped improve investor confidence. If foreign investors exclude China from their portfolio, they risk missing out on the huge potential of this rapidly expanding market.
From Coast to Coast: How U.S. Muni Bonds Help Build the Nation
From the Erie Canal to the Golden Gate Bridge, U.S. municipal bonds have financed crucial infrastructure. This infographic details their long history.
Over 200 Years of U.S. Municipal Bond History
Our modern society shares few characteristics with the 1800s. In the last two centuries, styles have changed, laws have evolved, and cities look entirely different. However, one thing that has prevailed is the way state and local governments finance public projects.
Far from a new invention, municipal bonds have been shaping U.S. communities for more than 200 years. In today’s infographic from New York Life Investments, we take a look back at their long history.
Early Beginnings – 1800s
1812: First Official Issue
New York City issues a general obligation bond for a canal.
1817-1825: Facilitating Economic Growth
A few years later, 42 separate bond issues help fund the successful Erie Canal project.
1843: Growing Popularity
Municipal debt sits at about $25 million. Over the next two decades, this total increases exponentially to fund urban improvement and free public education.
Circa 1865: Railroad Expansion
For a few years after the American Civil War, a great deal of debt is issued to build railroads.
1873: The Panic of 1873
Excessive investment in railroads, real estate, and nonessential services leads to the downfall of the large bank Jay Cooke and Co., smaller firms, and the stock market. Many state and local governments default, temporarily halting municipal financing.
The 20th Century
1913: Exception Granted
U.S. Congress introduces a permanent federal income tax, and specifically excludes municipal bond income from taxation.
Note: today, a portion of municipal bonds are taxable.
1930: Expansion in the West
In the midst of the Great Depression, voters approve $35 million in funding to build the Golden Gate Bridge.
1939-1945: Diverted Resources
With financial resources directed to the military in WWII, municipal debt falls. By 1945, total debt sits at less than $20 billion.
1960: Exponential Growth
Only 25 years later, outstanding public debt—the total amount owed to creditors—more than triples to $66 billion.
1971: Investor Protection
Municipal bond insurance is introduced. That same year, insured municipal bonds finance the construction of hospital facilities in Alaska—bringing essential services and investment opportunities to a remote area.
1975: Marketplace Stewardship
Bringing further reassurance to the municipal bond market, the Municipal Securities Rulemaking Board (MSRB) is introduced to establish regulations for dealers, and for advisors at a later date.
1981: Continued Growth
Outstanding public debt reaches $361 billion.
2009-2010: Economic Recovery
More than $181 billion of federally-subsidized Build America Bonds are issued by state and local governments to help stimulate the economy after the financial crisis.
2016-2018: Investor Dollars at Work
In recent years, state and local debt has financed many important projects across the country.
- 2016: The New York State Thruway Authority issues $850 million in bonds to finance a portion of the new NY Bridge Project.
- 2017: California’s Department of Water Resources issues $428 million in bonds for the maintenance and construction of its water management infrastructure.
- 2018: The Denver International Airport issues $2.5B in bonds to finance capital improvements, the largest airport revenue bond in municipal bond history.
2018: Helping People and the Planet
Sustainable applications for municipal bonds continue to grow, with Californian voters approving $2 billion in financing for supportive housing. In addition, state and local governments issue $4.9 billion in U.S. municipal green bonds.
Today: A Sizable Investment Opportunity
As financing spans the nation, the U.S. municipal bond market is both large and active:
- $3.8 trillion capital market
- One million outstanding securities
- $11.6 billion in par traded per/day
- 40,000 daily trades
Not only that, municipals have offered a compelling after-tax yield. For example, high yield municipals offered 121% of the after-tax yield of high yield corporates as of September 30, 2019.
The Foundation of Infrastructure
For over 200 years, municipal bonds have provided critical financing to build hospitals, schools, highways, airports, and more. Today, two out of three infrastructure projects in the U.S. are financed by municipal bonds.
Additionally, municipals have weathered almost every economic storm, providing much-needed capital stimulus during some of the deepest U.S. recessions. As history continues to unfold, municipals hold great potential for issuers, communities, and investors.
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