Goldman Sachs issued a warning to its richest clients that cryptocurrencies have “moved beyond bubble levels,” according to Yahoo Finance. The warning was part of Goldman Sach’s Private Wealth Management Division’s 108-page annual outlook, (Un)Steady as She Goes. As an example of the mania surrounding cryptocurrencies, Goldman’s note referenced The Crypto Company and Long Blockchain Corp. “The price moves in cryptocurrencies and in the share price of companies with new cryptocurrency or blockchain affiliations remind us of a comment by a Dutch historian, Theodorus Schrevelius. He wrote, in 1648, 11 years after the collapse of tulip prices, that ‘our descendants doubtless will laugh at the human insanity of our Age, that in our times, the tulip flowers have been so revered,’” Goldman wrote.
Advisors Think the Emerging Markets Party Will Continue
Financial advisors were even more positive about emerging markets at the start 2018 than they were in 2017, according to a recent poll by Columbia Threadneedle Investments. Emerging markets were one of the best performing asset classes in 2017, but 57 percent of investment managers and financial advisors polled were still optimistic on the asset class in 2018, compared to 45 percent one year ago. Not surprisingly, 43 percent of those polled also said they plan to increase portfolio allocation to emerging markets in the coming 12 months. Most respondents currently have either 1-to-5 percent (40 percent) or 5-to-10 percent (31 percent) in the asset class.
ETF Sponsors Face Hurdles Abroad
To mark the 25th anniversary of the exchange traded fund industry, PwC published a new paper on ETFs, detailing some of the things to look forward to, as well as some potential hurdles they face. For example, with the variety of ETFs increasing, regulators are paying more attention than ever, especially as ETF sponsors explore other geographic markets. For example, the paper points out that new tax rules in Germany significantly affect the ability to undertake stock lending of German stocks, and, in turn, curtail the ability for non-locally domiciled ETFs to compete with German ones.
