Saturday, April 30, 2022

Connecticut Senate passes abortion bill after emotional debate; Gov. Lamont pledges signature


John Woike/Hartford Courant/TNS

Christopher Keating, Hartford Courant
Fri, April 29, 2022,

With a major U.S. Supreme Court ruling months away, the state Senate debated emotionally Friday night before approving a key abortion bill that would be the most far-reaching in Connecticut in the past 32 years.

The bipartisan bill would increase the number of medical professionals allowed to perform abortions in Connecticut and expand abortion-related protections regarding lawsuits.


After three hours of debate, the Senate voted 25-9 with two Republicans absent shortly before midnight.


The often-emotional, personal and passionate debate included opposition by some members of the legislature’s Black and Puerto Rican Caucus, who said they were inspired by a freshman legislator, Rep. Trenee McGee of West Haven, who spoke passionately recently before voting against the bill.


The state House of Representatives had voted 87-60 recently for the measure, and Gov. Ned Lamont has pledged to sign it into law.

Lawmakers debated the detailed, seven-page bill late Friday night in a rare discussion at the Capitol as the state’s abortion law from 1990 has remained largely unchanged for three decades.


One of the major provisions in the bill would expand the medical specialists who are allowed to perform abortion services — allowing advanced practice registered nurses, physician assistants and nurse-midwives to provide medication and aspiration abortions in the first trimester.

Connecticut would become the 15th state to allow a wider range of medical professionals, including New York, California, Massachusetts, Vermont, New Hampshire and Maine.

Sen. Douglas McCrory, a Hartford Democrat who supported the bill, said he has been in the legislature for 17 years and has heard many speeches. One of the best, he said, was recently by a freshman legislator, Rep. Trenee McGee of West Haven, on abortion. He said she noted that Black women make up only 12% of the population but have 38% of abortions.

“She said it’s used as birth control in our community,’’ McCrory said. “I’m just giving you the facts. You make your own decision. ... Rep. McGee pulled the scab off something. Yes, she did.’'

Sen. Patricia Billie Miller, a Stamford Democrat, and others talked passionately on the Senate floor about Margaret Sanger, the founding of Planned Parenthood, and the history of abortion.

“Babies were ripped from Black mothers, African mothers, during slavery,’’ she said. “That’s the history that Black women and Native American women have had to endure. ... There’s no way that I can accept a system that would intentionally take a baby from a mother. ... Yes, they sterilized men, too. It wasn’t just women.’’

Miller noted that legislators often say that the brain is still developing until age 25 when they talk about issues like juvenile justice.

“We’re saying if an 18-year-old wants to have an abortion, she can do that. ... That gives me pause,’’ Miller said. “My friends who had abortions at 18 ... and it still bothers them. ... I will not stand here and support a system that was designed to take advantage of people who didn’t know any better.’’

She said that some women who are now in their 60s and 70s are still depressed about having an abortion decades earlier.

“I know I’m not going to be the most popular person after tonight,’’ Miller told her colleagues. “[McGee] said, in the black community, abortions are birth control. That’s true. ... I hear family planning - code word for abortion. Why can’t it be a code word for planning your family?’’

Miller added, “I agree it is her body to choose. ... I cannot support a system that has tried, systemically, to get rid of a race of people. ... Sorry, this is about racism, and that’s how I view this. ... I’m sorry if I’m emotional ... but this goes back to Africa for me. ... This goes deeper than just choice. ... Sometimes we don’t have the choice because we don’t have the money.’’

The next speaker, Sen. Marilyn Moore of Bridgeport, said that her heart was racing as she stood up to speak due to her emotions on the issue. An employee for Planned Parenthood for eight years, she said she helped women to get mammograms.

“I knew about Ms. Sanger,’’ she said. “What I learned at Planned Parenthood was how much racism and distrust there is in the medical system. ... People talk about why Black people don’t want to get vaccinated because we’ve had medical apartheid. ... Right now, I’m not feeling good about this bill.’’

Moore said, “Planned Parenthood will need to step up and say we need to do better.’’

At the start of the debate, Sen. Gary Winfield, a New Haven Democrat, said that Connecticut needs to act because of the pending Supreme Court action.

“We have to think about what we will do when that time comes,’' Winfield told colleagues in a debate that started at 8:48 p.m. Friday.

Sen. Saud Anwar, a South Windsor Democrat who is a medical doctor, said that if someone had told him five years ago that the state Senate would be debating abortion “I would be laughing at them ... but here we are.’'

As abortions are restricted in multiple states like Texas, Anwar predicted, “We will be a place of refuge for a lot of people.’'


Abortion rights advocates are highly concerned that the U.S. Supreme Court this year might overrule the 1973 landmark Roe vs. Wade ruling — meaning that all 50 states would individually decide the abortion rules in their jurisdiction.

Another key provision in the bill would allow Connecticut to protect the medical records of women who travel here from states like Texas or Louisiana. The information would also be protected from subpoenas in other states.


In addition, if a Connecticut resident is sued under a Texas-style abortion law, the bill would give them the right for a counter-suit in order to recover reimbursement, attorney’s fees and costs. A “clawback’' provision would protect Connecticut residents from Senate Bill 8 in Texas that allows private citizens in Texas to sue a doctor performing an abortion in Connecticut. The bill changes the state’s extradition statute so that Connecticut residents could not be summoned by other states, legislators said.

“What’s happening in other states is an attack on women’s health,’' said Senate majority leader Bob Duff of Norwalk. “What I see is mostly men, who look like me,’' offering bills to restrict abortion in other states.


Senate President Pro Tem Martin Looney, a longtime New Haven attorney, said the bill would lead to “a prevention of a chaotic legal situation that could happen in our country.’'

Sen. John Kissel of Enfield, the ranking Senate Republican on the legislature’s judiciary committee, said constituents in his district have strong views on both ends of the abortion spectrum.

“We could spend days debating when does life begin, but I will not do that,’' said Kissel, who has served 30 years in the Senate. “All of these are difficult moral questions, religious questions, technological questions, but I’m not going to get into that.’'

Kissel, who opposed the bill Friday night, said he once offered a bill on parental notification for minors who are getting an abortion, but the measure never passed.

“The advocates of the pro-choice notion were upset that we even had a public hearing,’' Kissel said. “People feel very passionately on both sides of this issue.’'

He added, “We’re sort of a live-and-let-live state right now, protecting women’s rights.’'

Sen. Heather Somers, the ranking Senate Republican on the public health committee, said the bill protects Connecticut’s medical professionals from being sued by another state.

“It is somewhat outrageous that another state thinks it can come into our state and sue clinicians,’' said Somers, who supported the bill.

Sen. Henri Martin, a Bristol Republican, said, “There are some here tonight to defend the right of the unborn. ... This is going to be an ongoing fight.’'

Sen. Dennis Bradley, a Bridgeport Democrat, said that only two medical professionals gave testimony at the judiciary committee and both questioned the bill. He said the legislature had not collected enough empirical data in the process to make its decision.

“By moving forward in this fashion and not flushing things out in the committee process ... I think we should all proceed with caution,’' Bradley said.

But Anwar said that about 100 people testified on the public health aspects of abortion under a separate bill that was merged into the final bill.

Amanda Skinner, a nurse-midwife who serves as chief executive officer of Planned Parenthood of Southern New England, said recently that the bill was needed because some women now wait more than two weeks for a first-trimester abortion as there is a shortage of medical providers.

“Abortion access is on the line,” Skinner told reporters in Hartford. “Connecticut must be a state where abortion care is acceptable without shame, stigma or fear.

Democratic legislators say that some patients from Texas have already traveled to Planned Parenthood in Hartford’s North End, but they could not say how many out-of-state patients have arrived.

Besides the Catholic Conference, one of the leaders in the lobbying against the issue is the Family Institute of Connecticut. The institute was pushing against a constitutional amendment in favor of abortion rights, but insiders said the amendment is not expected to come up for a vote.

“Abortion is the most sacred of their unholy sacraments,” the institute told supporters in an email. “And please pray. Whatever victories we may have, should God grant them to us, belong ultimately to Him. Please pray for the defeat of all ... of these bills.”

After the vote, Rep. Jillian Gilchrest of West Hartford said Connecticut is stepping forward due to national trends.

“As states like Oklahoma continue to enact extreme anti-abortion laws and we anticipate the overturn of Roe v. Wade in June, Connecticut stands at the forefront of protecting reproductive rights,’' she said. “Although Roe is codified in our state law and abortion will remain legal here, that does not mean we are fully protected nor that everyone has access. This bill is critical as we prepare for a post-Roe America.”


Christopher Keating can be reached at ckeating@courant.com
SHE REALLY SAID THIS
Pregnancy From Rape Is 'An Opportunity' For Women, Says Republican Trying To Ban Abortion

Alanna Vagianos
Thu, April 28, 2022

A PHOTO IS WORTH A THOUSAND WORDS

Ohio state Rep. Jean Schmidt (R) speaks during a news conference 
(Photo: Bill Clark via Getty Images)

Ohio state Rep. Jean Schmidt (R) speaks during a news conference on the new Health and Human Services Department abortion rule on Wednesday, March 21, 2012. (Photo: Bill Clark via Getty Images)

Rape is bad, but not bad enough to warrant an abortion, according to one Republican lawmaker from Ohio.

State Rep. Jean Schmidt (R) introduced her anti-abortion measure in front of the Ohio House Government Oversight Committee on Wednesday. The bill, H.B. 598, is a trigger ban that would outlaw all abortions in the state if the Supreme Court overturns Roe v. Wade, the landmark decision that expanded access to abortion nationwide. Similar to other GOP anti-abortion measures flooding red states right now, Schmidt’s trigger ban does not include exceptions for rape or incest.

Schmidt, a former U.S. congresswoman who once infamously discussed abortion with a class of elementary school students, defended her decision to not include these exceptions during committee debate. She argued that a pregnancy from rape is actually a chance for a woman to raise a child, send them to live with a family member or put them up for adoption. That hypothetical child, she argued, could someday cure cancer.

“Rape is a difficult issue and it emotionally scars the individual, all or in part, for the rest of their life ― just as child abuse does. But if a baby is created, it is a human life and whether that mother ends that pregnancy or not the scars will not go away, period,” said Schmidt.

“It is a shame that it happens, but there’s an opportunity for that woman – no matter how young or old she is ― to make a determination about what she’s going to do to help that life be a productive human being. … That child can grow up and be something magnificent, a wonderful family person, cure cancer, etc.,” she continued. “This is not about keeping abortion alive, this is about keeping the mother alive, and just because you have emotional scars doesn’t give you the right to take a life.”

The bill does include exceptions in cases where the pregnant person’s life is at risk, but even the definition of what constitutes a deadly risk was vague and up for interpretation during the committee debate.

Rep. Richard D. Brown (D) responded to Schmidt’s lack of exceptions with his own hypothetical: a 13-year-old girl who becomes pregnant after being raped by a family member.

“You know earlier you said every life is important. The life of the 13-year-old girl in my hypothetical is important. ... You don’t think that’s going to scar that girl? I think this girl has rights every bit as much as this zygote has rights under your bill,” said Brown. “This girl has rights and I don’t believe we can lose sight of the rights of the person who was raped. ... I think you should reconsider and add an abortion exception to this bill.”

Schmidt responded to the question curtly, telling Brown that they “fundamentally disagree.” “Let’s not kill the child because somebody was awful to that other person,” she later added, referring to a fetus and a pregnant 13-year-old child.

The Ohio lawmaker isn’t the only Republican introducing draconian abortion bans with little to no exceptions. Abortion opponents have become galvanized by an upcoming Supreme Court decision that could overturn or gut Roe in a matter of months. Many, like Schmidt, are preparing for a post-Roe world by introducing dozens of anti-abortion bills, the majority of which are actually becoming law.

More and more of these bills are abandoning once-standard language, like rape and incest exceptions. Schmidt’s reasoning for not including these exceptions aligns with the thinking of the larger anti-abortion movement.

“At the end of the day ... you have two individual human beings in the equation, and they are both worthy of our moral attention and our legal protection. That includes the mother and the child,” John Seago, legislative director at Texas Right to Life, a nonprofit organization that opposes abortion, told HuffPost in a conversation for an article on the lack of exceptions in recent abortion measures.

“And so elective abortion doesn’t actually undo the assault. It doesn’t actually undo the crime,” Seago continued. “It only violates further one of the moral agents, one of the individuals involved.”

Both Arizona and Florida recently passed 15-week abortion bans with no exceptions for rape or incest, and Oklahoma just passed a near-total abortion ban with similar lack of exceptions that would make performing an abortion a felony. Even the law currently threatening Roe in front of the Supreme Court — a 2018 Mississippi 15-week ban — has no exceptions for rape or incest.

This article originally appeared on HuffPost and has been updated.

Former Republican Idaho lawmaker found guilty of raping intern


Former Idaho state Rep. Aaron von Ehlinger


Deputy prosecuting attorney, Katelyn Farley confers with a colleague during a break in testimony on the second day of the rape trial of former Idaho state Rep. Aaron von Ehlinger at the Ada County Courthouse, Wednesday, April 27, 2022, in Boise, Idaho. 
(Brian Myrick/The Idaho Press-Tribune via AP, Pool)

REBECCA BOONE
Thu, April 28, 2022

BOISE, Idaho (AP) — A former Idaho lawmaker was convicted Friday of raping a 19-year-old legislative intern after a dramatic trial in which the young woman fled the witness stand during testimony, saying “I can’t do this.”

The intern told a Statehouse supervisor that Aaron von Ehlinger raped her at his apartment after the two had dinner at a Boise restaurant in March 2021. Von Ehlinger said the sex was consensual.

At the time, the Lewiston Republican was serving as a state representative, but he later resigned.

Von Ehlinger, 39, was found guilty Friday of rape. He was found not guilty of sexual penetration with a foreign object.

Von Ehlinger sat calmly as the verdict was read, as he has throughout the trial.

Afterward, 4th District Judge Michael Reardon told the jury: “This has been an unusual case attended by many unexpected circumstances, but I appreciate your attention ... and hard work.”

A felony rape conviction carries a minimum sentence of one year in prison in Idaho. The maximum penalty can be as high as life in prison, at the judge's discretion. Sentencing has been scheduled for July 28.

As von Ehlinger was remanded into custody and handcuffed, he talked quietly with his attorney who removed items from von Ehlinger's pockets.

The prosecution remained stoic as they left the courtroom, but once they reached a lower floor they stopped to briefly to congratulate each other on the verdict.

Von Ehlinger's attorney, Jon Cox, could not be immediately reached for comment after the trial.

The Associated Press generally does not identify people who say they have been sexually assaulted, and has referred to the woman in this case as “Jane Doe” at her request.

In a press conference, Ada County Prosecuting Attorney Jan Bennetts thanked the jury, investigators and the prosecutors who handled the case.

“Last but not least, it took an incredible amount of courage for the victim in this case, Jane Doe, to come forward,” Bennetts said. “I want to acknowledge the courage that she took in coming forward.”

Doe testified on the second day of the trial. She haltingly described the moments the alleged assault began, before abruptly leaving the witness stand.

“He tried to put his fingers between my legs and I closed my knees,” Doe said.

At that, she stood up.

“I can’t do this,” she said, quickly walking out of the courtroom.

The judge gave the prosecuting attorneys 10 minutes to find her to determine if she would return and resume her testimony.

When she did not, the judge told the jurors they had to “strike (Doe’s testimony) from your minds as if it never happened,” because the defense could not cross-examine her.

During the press conference, Deputy Prosecuting Attorney Katelyn Farley said the moment Doe left the trial was “heart-wrenching,” but said she and deputy prosecutor Whitney Welsh had prepared for trial knowing that Doe may not be able to testify.

“I think it's important that she decided to walk in the room, and she also decided to walk out — those were her choices,” Welsh said.

During his testimony Thursday, von Ehlinger often spoke in a clear, loud voice directly to jurors, saying he and Doe decided to return to his apartment to “hang out” after eating at a fancy Boise restaurant. Then they began making out on the couch, he said.

“Things were going well, and I asked (Doe) if she would like to move to the bedroom,” von Ehlinger said. “She said ‘Sure.’ We got up, held hands and walked into the bedroom.”

Deliberations stretched for seven hours until nearly 8 p.m. Thursday before the jury decided to break for the evening. At one point, the judge summoned the attorneys to his chambers because the jury asked a question. No details were made public about the jury's inquiry.

When the allegations became public — largely because of the legislative ethics investigation — Doe faced unrelenting harassment from some of von Ehlinger's supporters. Her name, photo and personal details about her life were repeatedly publicized in “doxxing” incidents. One of the people who frequently harassed her was in the courthouse to attend the trial, but law enforcement banned the man from the floor where the case was being heard.

During closing arguments, Farley told jurors that the case was about “power in the wrong hands" used to the “great devastation” of Doe. Von Ehlinger had social, political and physical power over the petite intern, Farley said.

“He used that power to rape and forcibly penetrate her,” Farley said, pointing at von Ehlinger. Doe resisted in several ways, she said, highlighting the testimony of law enforcement investigators and a nurse sexual assault examiner who interviewed Doe after the alleged assault.

“Words show lack of consent. Excuses of ‘Why this shouldn’t happen' show lack of consent. Yanking your head back and getting an injury shows lack of consent,” Farley said.

But von Ehlinger's attorney told jurors the prosecution's case was made up of “red herrings,” and said von Ehlinger was a credible person who willingly took the stand to share his side of the story.

The investigators and the nurse who performed the sexual assault exam testified earlier this week. They said Doe reported being pinned down while von Ehlinger forced her to perform oral sex, and that she knew he frequently carried a handgun and had placed it on a dresser near the bed at the time of the assault. The nurse also testified that Doe had a “goose egg” on the back of her head from striking the wall or a headboard while trying to jerk her head away from von Ehlinger's grip.

Experts: Lawmaker rape case illustrates survivors’ trauma

By REBECCA BOONE

1 of 13
District Judge Michael Reardon confers with attorneys during the second day of testimony in the rape trial of former Idaho state Rep. Aaron von Ehlinger, right, at the Ada County Courthouse, Thursday, April 28, 2022, in Boise, Idaho. 
(Brian Myrick/The Idaho Press-Tribune via AP, Pool)


BOISE, Idaho (AP) — When a legislative intern came forward with rape allegations against an Idaho state lawmaker last year, she was subjected to months of online harassment and abuse.

She later testified about the attack at an ethics hearing, and some of the lawmaker’s supporters filmed her and chased her through the Statehouse.

This week, the young woman took the stand to testify in his criminal trial and became so distraught she fled the courtroom.

Aaron von Ehlinger’s rape conviction Friday was a rare victory for prosecutors in a criminal justice system that can be fraught with trauma for sexual assault survivors, experts say.

Only about a third of sexual assaults are reported to police, according to to RAINN, the Rape, Abuse & Incest National Network, and only about 5% of assaults result in an arrest. Convictions are even rarer, with only about 2.8% of sexual assaults resulting in felony convictions.

Put another way, about 972 of every 1,000 perpetrators of sexual assault will never face a conviction, according to the organization.

“It really means that we are not very good at prosecuting it and that the survivors very rarely get the desired results,” said Elizabeth Jeglic, a professor of psychology at John Jay College with the City University of New York and an expert in sexual assault prevention and public policy. “We have to really focus on prevention. I think that’s where we’re going to see the largest change.”

Von Ehlinger, a former Republican state lawmaker, was found guilty of rape and faces anywhere from a year to life in prison when he is sentenced this summer. The jury acquitted the 39-year-old on a second count of sexual penetration with a foreign object.

Von Ehlinger maintained during the trial that the two had consensual sex. His attorney Jon Cox did not respond to a request for comment.

The verdict came after a dramatic trial in which the young woman fled the witness stand during testimony, saying “I can’t do this.”

Fourth District Judge Michael Reardon instructed the jury to disregard her statements since the defense couldn’t cross-examine her. He then asked the defense if they wanted to request a mistrial — a step that would have forced a do-over for the entire trial — but Cox declined. Cox hasn’t said if von Ehlinger intends to appeal.

The Associated Press generally does not identify people who say they have been sexually assaulted, and has referred to the woman in this case as “Jane Doe” at her request.

Doe was 19 and interning at the Idaho Statehouse when she met von Ehlinger and agreed to go to dinner with him.

But the night of March 9, 2021, was not the networking opportunity she expected, she later told investigators. Instead, she said, von Ehlinger brought her back to his apartment under false pretenses, overpowered her and forced her to perform oral sex while he straddled her chest, pinning her arms with his knees.

Doe reported the assault to her supervisor at the Statehouse on March 11, followed by police. She underwent a sexual assault examination, which revealed DNA that matched von Ehlinger.

Survivors must weigh the risk of not being understood or believed when they report, Jeglic said, as well as the intrusiveness of the investigation process.

“While most of the SANE (Sexual Assault Nurse Examiner) nurses are well-trained, having someone touch you and look at your private parts and ask you intimate questions immediately after can feel like another violation,” Jeglic said.

For von Ehlinger, the assault report triggered a legislative ethics investigation, and a legislative committee required Doe to testify during the hearing. A black fabric screen protected her from view during her testimony in the packed public hearing, but as she tried to leave the Statehouse some of von Ehlinger’s supporters chased her, filming her as she sunk to the floor, distraught.

The ethics committee recommended von Ehlinger be banned from the Statehouse, and he resigned.

For Doe, the report triggered an avalanche of additional trauma and harassment. Supporters of von Ehlinger doxxed her by releasing her name, photo and personal details about her life in far-right blogs and social media posts. One person even wore mocking costumes to political events with a sash emblazoned with her name. While some lawmakers lauded her courage in coming forward, others questioned her integrity or called her names like “honey trap.”

“The constant attack on her really prevented her from starting the healing process,” said Ada County Deputy Prosecuting Attorney Katelyn Farley, who argued the case against von Ehlinger. “Hopefully it doesn’t happen again to future victims, but it is something that happens all the time at this point.”

Data from the U.S. Bureau of Justice Statistics shows that as many as one-fifth of sexual violence survivors who chose not to report their crimes to police cited the fear of retaliation as a primary reason.

“This was a very public case, so people got to see kind of a real-time view into why people don’t report sexual assaults: What a tough journey it is, and the scrutiny they face, and the ongoing trauma of having to retell your story and have people attack you constantly,” said Annie Hightower, director of law and policy with the Idaho Coalition Against Sexual & Domestic Violence. The organization helps survivors navigate criminal justice system and provides civil legal services, and is representing Jane Doe.

That trauma was evident when Doe took the stand on the second day of the trial. She struggled to stay focused on the prosecutor, her gaze shifting between the exit doors, the packed gallery and the defense table where von Ehlinger sat. She haltingly described the first moments of the assault before abruptly standing up, saying “I can’t do this,” and rushing out of the courtroom.

It’s not uncommon for survivors to experience symptoms of post-traumatic stress disorder when recounting an assault, said Jeglic, with symptoms like increased heart rate and sweating.

“If the trauma is overwhelming you might see symptoms of dissociation — where they look like they space out. They might feel jittery or have difficulty concentrating. The fight or flight reflex is activated at that point, because it feels like they might be back in that situation,” Jeglic said.

Watching Doe leave the trial was “heart-wrenching,” Farley said. But deputy prosecutor Whitney Welsh, who worked with Farley on the case, noted that it was also a sign of Doe’s agency.

“I think it’s important that she decided to walk in the room, and she also decided to walk out — those were her choices,” Welsh said.

Successful prosecutions in cases like von Ehlinger can help the public better understand the dynamics of power and control in sexual assault cases, Jeglic said.

“I think one of the issues that we face as a society is the understanding of consent, what a rape looks like, and how power differentials come into play,” she said. “The more success we have in prosecutions, and the more we can prevent these things from happening to begin with, the better.”

The conviction was a bittersweet moment in the midst of a tough journey, said Hightower.

“The focus should be on my client and her healing — what happened today doesn’t heal her, right? But the team brought some little form of justice today,” Hightower said. “I hope this will help survivors — other survivors who maybe didn’t come forward, or are thinking of coming forward — to help them know that people believe them.”



WEB 3.0
EXCLUSIVE: Qualcomm CFO Sees 'Limitless' Opportunity Ahead In Cloud Connectivity

Adam Eckert
Fri, April 29, 2022, 


The world is in the midst of a digital transformation and Qualcomm Inc (NASDAQ: QCOM) is at the center of it.

Qualcomm's Role: Amazon.com Inc's (NASDAQ: AMZN) AWS and Microsoft Corp's (NASDAQ: MSFT) Azure are holding down the cloud side of the transformation, but silicon is needed on the device side for connectivity, Qualcomm CFO Akash Palkhiwala explained Friday on "Benzinga Live."

"Qualcomm is in this unique position to connect everything to the cloud," he said.

The company's technology spans wireless, processing and AI, which allows Qualcomm to enable the connectivity of consumer devices.

"If you want to connect a car to the cloud, if you want to connect a tractor to the cloud, if you want to connect retail store equipment to the cloud, we are the company that can do that," Palkhiwala said.

Growth & Scale: Qualcomm reported better-than-expected financial results and issued guidance above analyst estimates this week. The real standout is the company's growth forecast of 50% or more in its IoT (Internet of Things) business. The Qualcomm CFO told Benzinga there is potential for upside surprise on said outlook.

"As we look forward, we almost think of the opportunity in front of us as limitless," Palkhiwala said. "As hundreds of millions and billions of devices get connected to the cloud, we can be the chip company that enables that."

Automotive is a huge part of the company's cloud connectivity business. At the beginning of the month, Qualcomm announced the completion of its acquisition of Arriver. The acquisition enhances the company's ability to deliver open, fully integrated and competitive Advanced Driver Assistance System (ADAS) solutions to automakers and suppliers at scale. The financial details were disclosed as part of the company's quarterly results.

View more earnings on QCOM

"Cars are effectively becoming PCs or phones on wheels," Palkhiwala said. "We bring the digital chassis to the OEMs."

There are three things driving the automotive transformation: cloud connectivity, the digital experience inside the car and autonomous driving, he said: "And we're enabling all three of them."

"Every single major OEM is a customer of ours in the auto industry and again, we are at the front end of a 10-year growth curve."

The Qualcomm CFO went on to talk about navigating supply chain headwinds, guidance, robotics and more.

QCOM Price Action: Qualcomm shares have traded between $122.16 and $193.58 over a 52-week period.

The stock was down 3.63% at $142.81 at press time, according to data from Benzinga Pro.

Photo: courtesy of Qualcomm.
Crypto startups rewrite the rules of corporate venture capital


Thu, April 28, 2022

Crypto tends to distort and intensify everything it touches.


The value of art is subjective. The value of an NFT defies explanation. Gaming companies make money off of users. Blockchain gamers make money off of each other. Day trading stocks is risky. Day trading cryptocurrencies is like base jumping in one of those flying squirrel suits.


So it should come as no surprise that crypto corporate venture capital arms are upending norms.

CVCs typically try to make money in a way that benefits the parent company's strategy. In that respect, crypto CVCs aren't all that special: They've made money and grown the ecosystem, to the benefit of all involved.

These startups-turned-investors are remarkably active. They back rivals and underwrite bailouts—and some are making a fortune along the way. Which makes them inescapably odd.

Crypto startups may simply be borrowing from the "coopetition" approach that gave the garage entrepreneurs of early Silicon Valley an advantage over tech conglomerates. They're just taking it up a notch, playing the role of both founder and funder.

The ride together, die together approach of crypto CVCs fits the sector's collectivist culture. The blockchain experiment is still proving that it is not merely a solution in search of a problem, that decentralized tech will fulfill needs in ways that powerful platforms have failed. Coopetition may be the way to meet that challenge.

In a world where digital assets are meant to move around a network, it follows that the larger the network, the greater the potential value of that asset. A Porsche in a garage may look lovely, but you don't know its true value until you take it on the Autobahn.

"Web3 is all about the shared network effect," said Yat Siu, co-founder and chairman of Animoca Brands, a blockchain game company that frequently invests in other startups. "It makes sense for us to invest in all the businesses that can build value on top of each other."

A similar argument underpins platform tech company VC arms like Salesforce Ventures, Amazon's Alexa Fund and Microsoft's M12. Invest in companies building on the platform, and the value of the platform increases.

But nobody owns the blockchain, so the amount of strategic value captured by a crypto CVC investment is rarely straightforward. Paying it forward Startups that invest in other startups are typically the exception, but in crypto, they seem to be the rule.


Since the beginning of 2021, about half of all crypto VC deals included participation by a fellow crypto company, amounting to more than 1,300 deals, according to PitchBook data.

Animoca Brands has made more than 150 investments and backed many of crypto's biggest names, including OpenSea, Dapper Labs and Sky Mavis. It has done so with a distributed approach to dealmaking. The company has an investment team, but checks can also be written by members of the product team, Siu said.

Here's another way blockchain startups are upsetting CVC norms: They unabashedly invest in rivals.

This isn't totally without precedent. Ford backed EV truck maker Rivian, and Tyson Foods invested in Beyond Meat, for example. But Tyson sold its stake before launching its own plant-based burger. And Ford relinquished its board seat and ended a collaboration with Rivian prior to launching the electric F-150, which Ford reportedly argues isn't a true competitor to Rivian's luxury truck.

Crypto startups, by contrast, show little sensitivity to apparent conflicts.

Coinbase, arguably the godfather of crypto CVC, has made investments in competitors BlockFi and FTX. Even more norm-altering was Coinbase's decision to launch an NFT marketplace after it had invested in OpenSea, the leading NFT marketplace. (Andreessen Horowitz has led rounds for both companies, a possible sign that crypto weirdness is contagious.)


Meanwhile, Animoca Brands has invested in dozens of blockchain gaming companies. And OpenSea has paid Coinbase's favor forward by investing in Formfunction, yet another NFT marketplace. Two theories of crypto coopetition The simplest explanation for why crypto startups are enthusiastically investing in each other is that they're getting rich.

Coinbase's venture portfolio, which cost $352 million, could be worth about $6.6 billion, according to Oppenheimer analyst Owen Lau. About 20% of Coinbase's capital is reserved for strategic investment, and it primarily invests in seed- and early-stage rounds.

For some, the spoils of investing can be personal: FTX Ventures' $2 billion fund is financed in part by CEO Sam Bankman-Fried.

And even in a period of flat or declining VC valuations, those of blockchain startups can't stop climbing.

Another explanation is that the crypto community, and especially trading platforms like Coinbase, need to diversify away from bitcoin and the boom-bust cycles of cryptocurrency trading. The proliferation of venture funds at blockchain startups is one way to ensure that no good idea goes unfunded.

This need might explain one of the weirdest crypto CVC deals of all. Earlier this month, crypto exchange Binance decided to bail out Sky Mavis, whose leading game "Axie Infinity" was robbed of cryptocurrency worth more than $600 million in a hack.

Justifying the decision, Binance CEO Changpeng Zhao said it was "necessary" to help Sky Mavis, given the gaming company's prominent position in the crypto industry.

The actions and message suggest that Sky Mavis is too important to fail. Blockchain needs killer apps, and the far-from-perfect "Axie Infinity" game—whose business model is frequently compared to a pyramid scheme because of its reliance on money from new users—is among the best it's got.

In his recent book "The Power Law," Sebastian Mallaby argues that Silicon Valley's success in the early days of personal computing is owed to a large number of small companies engaging in "coopetition" with each other.

At the time, nobody really knew what a personal computer was or why people might want one. The collaborative approach gave Silicon Valley an edge over more established electronics corporations because, as a collective, startups were able to run more frequent experiments than any one company could internally.

Venture capitalists facilitated the network effect both directly, through their networks, and indirectly, through the shared language of money.

A similar argument could be made within blockchain tech today. Nobody really knows what the final objective of the crypto experiment is, and the industry needs to try as many things as quickly as possible to find out.

The only way to do that is by working together and throwing money around, norms be damned.

Related read: Market Map: VCs rush to collect NFT startups

This article originally appeared on PitchBook News
Musk told bank he will rein in Twitter pay -sources

Fri, April 29, 2022

STORY: Tesla CEO Elon Musk told banks - that agreed to help fund his $44 billion acquisition of Twitter - that he could crack down on executive and board pay at the social media company.

That’s according to three sources familiar with the matter.

Musk made the pitch as he tried to secure debt for the buyout - days after submitting his offer to Twitter earlier this month, according to sources.

While the plan he outlined was reportedly thin on detail, sources said Musk told the banks he plans to develop features to grow business revenue, including new ways to make money out of tweets that contain important information or go viral.

Ideas he brought up included charging a fee when a third-party website wants to quote or embed a tweet from verified individuals or organizations.

In the end, he clinched 13 billion dollars in loans secured against Twitter and a $12.5 billion margin loan tied to his Tesla stock. He agreed to pay the rest with his own cash.

Musk has tweeted about eliminating the salaries of Twitter's board directors, which he said could result in about $3 million in cost savings.

In his pitch to the banks, Musk also pointed to Twitter's gross margin, which is much lower than Facebook or Pinterest, arguing this leaves plenty of space to run the company in a more cost-efficient way.

A representative for Musk declined to comment.

MUSK TAKES AIM AT BIDEN’S COUNTER-DISINFORMATION BOARD

admin 29 April 2022 

Elon Musk, who has agreed a $44bn takeover of Twitter, has expressed dissatisfaction with the Biden administration’s newly announced Disinformation Governance Board.

The body, part of the Department of Homeland Security, will focus on countering disinformation from Russia and from human smugglers targeting its southern border, the AP reported.

In response to a tweet from a rightwing provocateur comparing the board to the Nazis, Musk simply replied: “Discomforting”. Responding to another tweet calling the “censorship board[‘s]” executive director Nina Jankowicz a “radical leftist”, he responded: “This is messed up”.

Such a response may be expected from a self-proclaimed “free speech absolutist”, who said that SpaceX’s Starlink would not block Russian state media in Ukraine “unless at gunpoint” (though Musk’s commitment to free speech on business matters has been questioned by several commentators).

Russian disinformation seems like the most obvious friction point as the invasion of Ukraine continues. It is unclear whether measures in place on Twitter, such as labelling state-affiliated sources, would be seen as infringing on free speech.

It is possible that Musk will find a way to support the board’s approach as Twitter’s owner. His definition of “free speech” seems vague and he has suggested it depends on the legal status of speech.

If the board’s approach to disinformation is framed in terms of suggestions rather than edicts, it is also possible that both sides can avoid losing face. Musk may not have a board to deal with if Joe Biden loses the next presidential election. Or if his deal for Twitter, which still relies on him stumping up $21bn in cash to contribute to the buyout, falls through.

A-10 official issues warning over US Air Force’s ‘devastated’ Warthog fleet



Airman 1st Class Joshua Kleinholz

Stephen Losey
Thu, April 28, 2022, 12:24 PM·3 min read

WASHINGTON — A U.S. Air Force official managing the A-10 Thunderbolt aircraft says the service is “hollowing” its Warthog fleet by starving it of resources amid a push to retire the aging attack plane — but still continuing to heavily fly it.

In a March 31 briefing, Pamela Lee, the A-10 systems manager at Hill Air Force Base in Utah, said the Air Force has “resourced the A-10 to divest yet flew it like an enduring fleet, rapidly accelerating [the] decline toward today’s hollowing fleet.”

The watchdog group Project on Government Oversight posted the slides Tuesday. The Air Force confirmed the slides are authentic, but said they were prepared for internal discussion and that Lee declined to comment.

The A-10, designed during the Cold War to be a tank-killing aircraft, was flown heavily in the Middle East and Afghanistan over the last 20 years to provide close-air support. But the Air Force has long warned the A-10 would not survive a high-end fight in contested airspace and has since 2015 repeatedly attempted to retire the fleet, either in full or in part, to free up funding.

“The A-10 is a great platform for a [permissive] environment,” Air Force Chief of Staff Gen. CQ Brown told the House Armed Services Committee in a Wednesday hearing. “I don’t see very many [permissive] environments that we’re going to roll into in the future.”

Although Congress rejected all the service’s efforts, Lee said the Air Force’s decisions have “devastated” the fleet and left it “dealing with perpetual challenges.”

The “A-10 lives in the shadow of [fiscal 2015] divestiture decisions,” Lee said in the briefing’s summary.

Lee’s briefing slides said the service deferred the A-10′s “hogback” fuselage structural repair work from 2013 to 2019, which she said left 120 jets at risk of being grounded. The number of A-10s heading to depots for major maintenance was also cut by more than half, she added.

Lee said the A-10′s aging engine nacelles are quickly becoming a significant problem, representing a bigger threat to the aircraft’s readiness than its wings.

And she said the A-10′s re-winging efforts are falling short, with new wings purchased for only 173 of the service’s 281 Warthogs. Lee said this means 145 A-10s wouldn’t be able to fly a six-month deployment.

According to the slides, the Air Force has until the second quarter of FY23 to buy more wings before it risks a “stalled recovery.” Fixing the wing, depot issue and other shortcomings would take at least a decade, she said.

If Congress doesn’t grant the service’s request to start retiring the A-10, Lee said, it will have to quickly act to mitigate the worst of the problems that have come from these decisions.

In the committee hearing, Brown said the service plans to buy replacement wing kits for about 218 A-10s. The service called for retiring 21 A-10s as part of its FY23 budget request, leaving the service with 260 Warthogs; Brown said those will not be re-winged.

Rep. Lisa McClain, R-Mich., expressed confusion about the Air Force’s apparent intention to not buy enough wing kits for all remaining A-10s and asked if only 218 planes needed new wings.

“Depends on how many A-10s we keep,” Brown said. “What we don’t want to do is buy more wing kits than we’re going to need if we’re going to start retiring A-10s.”

Air Force Secretary Frank Kendall added that even if those remaining 42 A-10s wouldn’t get replacement wings, they would still be able to fly.

Kendall also said the Air Force, if free to do so, would retire the A-10 fleet by the end of the next five-year plan.
Activision Blizzard stockholders vote in favor of $68.7B sale to Microsoft

Amanda Silberling
Thu, April 28, 2022, 


At a special meeting today, Activision Blizzard stockholders approved Microsoft's proposal to acquire the gaming company for $68.7 billion.

This all-cash transaction values the creator of games like Call of Duty, World of Warcraft and Candy Crush at $95 per share. But investors have worried that FTC chair Lina Khan could pull the plug on the deal due to antitrust concerns, which could explain why shares have been trading consistently lower than Microsoft's offer. Though today's vote is a meaningful step toward a successful deal for Activision Blizzard and Microsoft, the deal is still subject to regulatory review. The proposed transaction is expected to close before July 2023.

“Today’s overwhelmingly supportive vote by our stockholders confirms our shared belief that, combined with Microsoft, we will be even better positioned to create great value for our players," said Activision Blizzard CEO Bobby Kotick.

He added that the deal would provide "even greater opportunities for our employees, and to continue our focus on becoming an inspiring example of a welcoming, respectful and inclusive workplace,” which is a wild statement coming from someone who runs a company facing numerous lawsuits for sexual harassment, retaliation and discriminatory workplace practices. Kotick himself has been accused of knowing for years about sexual misconduct and rape allegations at his company but not doing anything about it.

In light of these conflicts, Kotick announced a zero-tolerance policy against harassment and $250 million investment in recruiting gender diverse talent (at the time, only 23% of employees identified as women or non-binary people). But employee dissatisfaction has prevailed.

When the acquisition was announced in January, quality assurance testers at Raven Software, a division of Activision, had been on strike for five weeks. They protested the layoffs of 12 contractors, which came after over a month of consistent overtime work.

"We realized in that moment that our day-to-day work and our crucial role in the games industry as QA was not being taken into consideration," Onah Rongstad, a QA tester at Raven Software, told TechCrunch at the time.

Raven Software concluded their strike by forming the historic first union at a major U.S. gaming company, but Activision Blizzard did not voluntarily recognize their union, which meant that they had to file for a union election with the National Labor Relations Board. The gaming giant tried to block the election, arguing that they couldn't unionize just one department of Raven Software, but the NLRB ruled in favor of the QA testers, giving them permission to vote for union recognition. That vote is expected to take place via mail between April 29 and May 20.

Given the turbulence at Activision Blizzard, Microsoft's acquisition offer seems like a lifeline. Kotick is expected to step down after the deal closes.

Microsoft to buy Activision Blizzard for $68.7 billion

NLRB rules Activision Blizzard’s first union at Raven Software can vote for recognition


Wall Street Is Betting That Microsoft-Activision Deal Will Fail


Brody Ford and Jason Schreier
Thu, April 28, 2022,


(Bloomberg) -- Activision Blizzard Inc. shareholders approved the company’s $69 billion sale to Microsoft Corp on Thursday, but Wall Street is betting that Biden antitrust enforcers could unravel one of the largest mergers in U.S. history.

Microsoft’s $95 offer is a 24% premium over Activision’s current share price, indicating investors see risk the buyout won’t close as planned. This risk premium is more than double that of Twitter Inc. following Elon Musk’s offer, and higher than most of the announced -- but still pending -- deals tracked by Bloomberg.

Tough-talk from President Joe Biden’s antitrust enforcers is fueling investor fears that the deal could be blocked or subject to delays even if it prevails, said Matt Perault of New Street Research. Plus, the deal will also need approval by other governments including the European Union and China.

The merger, which has until June 2023 to close, would make Microsoft the world’s No. 3 gaming company, and would give it ownership over two of the most recognizable gaming brands on the planet in Call of Duty and World of Warcraft. Microsoft would also gain control of Candy Crush developer King, which made $2.58 billion in revenue last year.

More than 98% of Activision shares voted in favor of the acquisition, the company said. The complete results of the meeting will be reported in a form 8-K to be filed with the U.S. Securities and Exchange Commission by early next week. The shares ticked slightly higher and closed at $76.70 in New York.

SOC Investment Group, an activist shareholder group with a small stake, earlier this month encouraged shareholders to vote down the deal. That group and other investors have spoken out against a potential golden parachute for embattled Activision Chief Executive Officer Bobby Kotick.

The deal will be reviewed by the Federal Trade Commission, which is led by Lina Khan, who has long advocated for a more forceful approach to reviewing deals, particularly by the biggest technology companies. Under her leadership, the agency has blocked Nvidia Corp.’s acquisition of Arm Ltd. as well as Lockheed Martin Corp.’s deal for Aerojet Rocketdyne Holdings Inc. She also resurrected the FTC’s monopoly case against Meta Platforms Inc., which seeks to split off WhatsApp and Instagram.

Fears of a legal challenge are well-founded, based on Khan’s statements opposing growth via acquisitions by big tech platforms, said Jennifer Rie, an antitrust analyst with Bloomberg Intelligence. Plus, it’s likely the FTC will have a Democratic majority by the time a decision has to be made, alleviating a stalemate that may have caused inaction on the Amazon-MGM merger, Rie said.

Not everyone is worried. Wedbush Securities analyst Michael Pachter places the odds of an FTC lawsuit at 10%, and chances of winning a case at 0% due to the difficulty in defining the concentrated market that this merger would cause. Microsoft wouldn’t have a massive share in the market for console games or videogames at-large, and current antitrust law overlooks so-called freemium business models common in gaming, Pachter said.

He attributes market fear to lack of familiarity with the video-game industry and the FTC’s tough-talk on mergers. The agency “can’t win this one -- so if they can’t win, they’re not going to sue. And Microsoft’s going to call their bluff.” Biden’s new antitrust chiefs have said they’re willing to take risks on big cases.

Even if an FTC challenge doesn’t ultimately prevail, a protracted legal fight could prompt the companies to abandon the deal, analysts said. Despite being the nation’s second-largest company, Microsoft has escaped much of the scrutiny lobbed at its peers. Its experience with regulators and proactive communications about the deal could make a difference in winning approval, said Betty Chan, a merger-arbitrage specialist at Elevation LLC.

“We are optimistic on the outcome at this point, but are still doing work to get more comfort on this.” Chan said.

(Updates shares. A previous version of this story was corrected to remove an erroneous amount of Kotick’s golden parachute.)

Most Read from Bloomberg Businessweek

Group behind Karachi suicide bombing warns China of more deadly attacks if 'exploitation' continues



Bryan Ke
Thu, April 28, 2022, 

The separatist group behind the recent suicide bombing of a school in Karachi, Pakistan, has threatened China with more deadly attacks if the country continues with its Belt and Road Initiative in the Balochistan province.

In a statement published in English, Jeeyand Baloch, a spokesperson of The Baloch Liberation Army (BLA), warned Beijing of “even harsher” attacks unless China stopped its “exploitation projects” in the Balochistan province, as part of the country’s Belt and Road Initiative, and “occupying of the Pakistani state.”

“Hundreds of highly trained male and female members of the Baloch Liberation Army’s Majeed Brigade are ready to carry out deadly attacks in any part of Balochistan and Pakistan,” Baloch said.

The separatist group claimed responsibility for the Tuesday attack in which a woman suicide bomber detonated a bomb outside China's Confucius Institute at the University of Karachi. The incident reportedly killed four people, including three Chinese teachers, drawing condemnation from Beijing.

The separatist group later revealed the identity of the suicide bomber as Shaari Baloch, a 30-year-old mother of an 8-year-old girl and 4-year-old boy, who was a science teacher studying for a master’s degree at the university.

Only four suicide attacks in Pakistan over recent years have been carried out by women, and the BLA noted Tuesday’s deadly event marked their first.

A university official had previously raised concerns over the safety of the 15 Chinese teachers working there. An unnamed source also told Agence France-Presse that there were reports in February that suggested an “attack might be carried out on campus.”

When asked if the recent attack would affect China’s relationship with Pakistan, Foreign Ministry spokesperson Wang Wenbin said, “The ironclad friendship between China and Pakistan is unbreakable. Any attempt to undermine the two countries' mutual trust and cooperation, as well as the construction of the China-Pakistan Economic Corridor will fail.”

Pakistani Prime Minister Shahbaz Sharif said authorities have already begun their full-scale investigation in Sindh and Karachi.
PAKISTAN
Gen Bajwa, Bill Gates discuss polio eradication, Covid-19

Naveed Siddiqui
Published April 30, 2022 - 
Chief of Army Staff (COAS) Gen Qamar Javed Bajwa (R) and 
Microsoft co-founder and philanthropist Bill Gates. 
— DawnNewsTV/Reuters


Chief of Army Staff (COAS) Gen Qamar Javed Bajwa and Microsoft co-founder and billionaire philanthropist Bill Gates discussed Pakistan's commitment to polio eradication, and the Covid-19 situation in the country in a telephone call, the military's media affairs wing said on Friday.

In a statement, the Inter-Services Public Relations (ISPR) said Gates appreciated the army for supporting the country's polio drive and ensuring proper reach and coverage. The army chief responded that polio eradication was a national cause, adding that "credit goes to all involved in the process".

Gates also appreciated Pakistan's success in combatting the coronavirus pandemic despite resource constraints. For his part, Bajwa attributed it to a "true national response" executed through the National Command and Operation Centre (NCOC).

The army chief appreciated Gates' efforts towards polio eradication and the coronavirus response and assured the philanthropist of continued cooperation, according to the statement.

Earlier this year, Gates had visited Pakistan for the first time and held meetings with the then-prime minister, the president and other national and provincial leaders. He had also attended a luncheon and a ceremony to confer on him one of the country's highest civil awards.

President Dr Arif Alvi had conferred the Hilal-i-Pakistan on Gates in recognition of his philanthropic services for humanity, eradication of polio and betterment of the people of Pakistan.

Gates had also visited the NCOC and chaired a meeting of the National Emergency Operation Centre (NEOC) on polio. The Bill and Melinda Gates Foundation is part of a global initiative between governments and international organisations fighting the crippling disease.

While calling Pakistan's commitment to ending polio "inspiring", Gates had said the country was near the end-game against the disease.

In a telephone call with Prime Minister Shehbaz Sharif earlier this month, Gates had assured Pakistan of the Bill & Melinda Gates Foundation's continued support "for ensuring that no child is at risk of paralysis due to poliovirus" in the country.

Pakistan had reported only one case of polio in 2021 but after remaining polio-free for almost 15 months, the country has now reported a second case in less than 10 days.

The new cases have created panic among the officials concerned as the virus can travel along with people because of massive movement during Eid holidays.

GREEN CAPITALI$M
ESG Demand Drops Among European ETF Investors

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Flows into exchange traded funds that are focused on better environmental, social and governance (ESG) outcomes amounted to €13bn in the first quarter, less than half of the €27bn that went into them in Q4 2021, Morningstar data for Europe show.

Just 30.4 per cent of total money put into ETFs in Europe in Q1 went into ESG funds, down from the 79 per cent record high in Q4 last year.

Thematic ETFs, like ESG portfolios and other funds that also tend to come with a quality growth bias, have seen demand shrink amid the disastrous performance of recent months. Flows into these types of funds amounted to €0.6bn in Q1 2022, down from €2.1bn in the previous quarter.

Morningstar observes that this was the first quarter since 2019 in which thematic ETFs failed to attract at least €1bn of net inflows.

That is not to say that all such ETFs have been left out in the cold. With Russia’s invasion of Ukraine putting a spotlight on the need for renewables, the iShares Global Clean Energy Ucits ETF (INRG), a poster child for thematic funds, took in €459mn during Q1. The iShares Agribusiness Ucits ETF (SPAG) took in €418mn, and iShares Digital Security Ucits ETF (SHLG) and L&G Cyber Security Ucits ETF (ISPY) both took in more than €200mn in Q1.

As recently noted, there have been interesting performance differentials between the two in recent months, with the iShares Digital Security Ucits ETF falling 8 per cent during Q1 and iShares Digital Security Ucits ETF ending the quarter relatively flat.

Investors have also rushed into gold funds and broader commodity plays, with gold exchange traded products offered by Invesco and iShares taking in almost €5bn between them.

While the behaviour of ETF investors often tends to reflect what is happening in both the active management space and wider markets, that has not always been the case in the first quarter of this year.

With the sheer extent of inflation becoming difficult to ignore, investors in ETFs and other funds have made some fairly intuitive moves, with appetite for quality growth funds and fixed income allocations appearing to tail off. But this has not resulted in outright selling of ETFs — some investors are continuing to favour even those subsectors that look increasingly under pressure.

European Bond ETF sales fell from €8.4bn in the final quarter of 2021 to €5.1bn in the first three months of this year. But the fact that this was a positive figure contrasts with data on other parts of the funds market. Investment Association data show that UK investors pulled £1.6bn net from open-ended fixed income funds in January and February 2022, unsurprising given the growing sell-off in this space.

Various bond ETF categories have registered net outflows over the first quarter in Europe, from US dollar inflation-linked bond funds to various high-yield bond categories.

A handful of funds registered notable outflows, from short-duration plays such as the iShares $ Treasury Bond 1-3yr Ucits ETF (IBTS) and Pimco US Dollar Short Maturity Ucits ETF (MIST), to inflation-linked and high-yield bond funds. Funds that suffered outflows included the iShares $ High Yield Corp Bond Ucits ETF (SHYU), iShares Global High Yield Corp Bond Ucits ETF (IGHY) and iShares Fallen Angels High Yield Corp Bond Ucits ETF (RISE), which seeks to invest in debt that has been downgraded from investment grade to high yield that could make a comeback. Investors also exited what was a popular fund in 2021 — the iShares China CNY Bond Ucits ETF (CNYB).

While it might seem surprising to see investors calling time on high yield, a fixed income subsector often viewed as being more resilient against inflation and rising rates, this could reflect concerns that a recession seems more likely. The same thinking might explain the enduring popularity of US government bonds. US government and corporate bond funds were the two most popular fixed income categories during Q1, and a variety of other government bond ETFs also remained popular.

In a commentary on the latest data, Jose Garcia-Zarate, associate director of passive strategies at Morningstar, noted that the bulk of fixed income investment going into developed market bond ETFs “may look a bit odd, but simply confirms that in times of market stress US assets will always prove to be the ultimate safe haven for investors”. 

This might also explain the exodus from Chinese bond products. “Here too we see how the rise in interest rates in the US, with its negative effect on bond prices, actually makes the search for yield away from developed countries less attractive,” he said.

This article was previously published by Investors Chronicle, a title owned by the FT Group.