BrokerDealer.com blog update profiles the revenue and profit performance of the US Broker-Dealer space as demonstrated by the pricing action in the iShares US Broker-Dealer ETF (NYSE:IAI) when compared to the returns of the S&P 500 (see chart). Below extract is courtesy of coverage from ETFtrends.com.
Independent broker-dealers generated double-digit revenue growth in 2014, and a broker-dealer- related exchange traded fund is outperforming in the financial space so far this year.
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Over the past three months, the iShares US Broker-Dealers ETF (NYSEArca: IAI), which tracks U.S. investment banks, discount brokerages and stock exchanges, has increased 7.8%, compared to the 2.5% gain in the broader Financial Select Sector SPDR (NYSEArca: XLF). Year-to-date, IAI was up 0.7% while XLF dipped 1.5%.
The 25 largest independent broker-dealers generated a 10.3% year-over-year rise in revenue over 2014, reports Bruce Kelly for InvestmentNews.
Top independent broker-dealers include LPL Financial LLC (NYSE: LPLA), which garnered $4.3 billion in revenue, and Raymond James Financial Services (NYSE: RJF), which added $1.6 billion. IAI includes a 3.4% tilt toward LPLA and a 4.7% weight in RJF.
The industry is experiencing an increase in fees. Revenue from investment products and services that charge a fee instead of a commission rose 20% in 2014 among the top 25 independent broker-dealers, mirroring a growing trend in the services industry.
For the full article from ETFtrends.com, please click here
Brokerdealer.com blog update courtesy of extract from article in ETFtrends.com by Todd Shriber and Tom Lydon
By Todd Shriber & Tom Lydon
Financial services stocks and exchange traded funds have been lagging the broader market this year. That much is highlighted by a 7.5% gain for the Financial Select Sector SPDR (NYSEArca: XLF) and a 6.3% gain for the iShares U.S. Financials ETF (NYSEArca: IYF).
But as they dithered for much of the earlier part of 2014, financial services ETFs are starting to impress. Over the past month, four of the top-10 performing non-leveraged ETFs are financial services funds and that group is led by the iShares U.S. Broker-Dealers ETF (NYSEArca: IAI).
After enduring a summer swoon at the hands of lethargic trading activity, IAI has come roaring back. Over the past month, the fund is up nearly 5.1%, a performance topped by only three other non-leveraged ETFs. That while trading volumes continue to dwindle, prompting concern from some market observers about the health of the bull market. Trading has been continually slowing down since the sharp uptick after the financial crisis in 2009. Last year, daily average U.S. stock trading volume was down 37%.
Despite its trials and tribulations earlier this year, which were magnified because it was one of 2013′s best-performing financial services ETFs, IAI entered Tuesday trading less than 0.6% below its 52-week high and it looks like more upside could be on the way.
“One of the most recent sectors to step forth and grab the leadership mantle, speaking of warts, has been the broker/dealers. Despite the cyclical (or secular) decline in equity volume and the concern over the lack of bond supply, the stocks of broker/dealers have been exceptionally strong of late. Last Friday, as the S&P 500 closed down 0.6%, the NYSE ARCA Broker/Dealer Index (XBD) was up 0.6%. For the week, the XBD was up over 4%, breaking out to a 6-year high in the process,” according to J. Lyons Fund Management.
The full article can be found by clicking this link.