Showing posts with label Exchange Traded Funds (ETFs). Show all posts
Showing posts with label Exchange Traded Funds (ETFs). Show all posts
Saturday, March 27, 2010
SEC reviews investment companies' use of derivatives
Mary Schapiro, chairman of the Securities and Exchange Commission, said the agency is reviewing the use of derivatives. "It's appropriate to engage in a more thorough review of the use of derivatives by [exchange-traded funds] and mutual funds given the questions surrounding the risks associated with the derivative instruments underlying many funds," Schapiro said.
Tuesday, December 1, 2009
New margin requirements for leveraged exchange-traded funds (ETFs)
Effective
http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/MutualFunds/P119778
Monday, October 19, 2009
ETF INVESTOR: Funds For TIPS, Commodities, Foreign Stocks Dominate
Investors fretting over a weaker U.S. dollar and the outlook for inflation have been stuffing cash into exchange-traded funds following commodities, foreign stocks and inflation-protected bonds, industry data show.
"Aside from hunting for low-duration bond ETFs in an effort to avoid excessive interest rate risk, it appears that investors are also bracing their portfolios for a potential long-term bout of inflation," said John Gabriel, ETF analyst at Morningstar Inc.
He said industrywide ETF assets topped $700 billion last month, with year-to-date inflows of $56.3 billion. "ETF industry flows have been quite strong so far in 2009, with positive flows in every month except February," Gabriel said.
So where is the money going? Into bonds, commodities and international stocks, particularly the emerging markets subcategory. Leveraged and inverse ETFs, the high-powered funds that have attracted regulatory scrutiny this year, saw positive inflows in September after investors pulled money the previous two months.
Bonding With Bonds
For the major asset classes, taxable-bond ETFs hauled in the most new money in September, according to Morningstar.
The preference for bond ETFs mirrors the buying trends in mutual funds. Many retail investors sat out the rally that started in March. Still wary of stocks after their plunge during the credit crunch, individual investors have piled into bond funds.
"The shift into fixed-income ETFs has been an ongoing theme thus far in 2009; year-to-date the category has brought in about $26.7 billion of new assets, which makes it the most popular ETF category so far in 2009," Gabriel pointed out. "For some perspective, consider that taxable-bond ETFs attracted approximately $17 billion in all of 2008."
The earliest ETFs tracked stocks, but the bond side of the business is growing. At the end of September, there were 768 U.S.-listed ETFs. Of these, 68 were fixed-income funds, with about $91 billion in total assets, according to research from State Street Global Advisors.
"From their start with a handful of options in the 1990s, ETFs have grown up around a clear value proposition, low-fee offerings that allow for diversification and/or targeted investment themes," said Nicholas Colas, ConvergEx chief market strategist.
"Their collective success is printed on the tape every day, with products like the SPDR S&P 500 ETF (SPY), PowerShares QQQ Trust (QQQQ) and Financial Select Sector SPDR Fund (XLF) at the top of the volume tables for exchanges, alternative trading venues and dark pools," he said.
In terms of size, one bond fund that has been roaring up the charts is designed to protect investors from inflation: the iShares Barclays TIPS Bond Fund (TIP). The ETF, which is indexed to a basket of Treasury Inflation-Protected Securities, has grown to nearly $17 billion in assets.
"After enjoying more than $6.5 billion in net inflows year-to-date, iShares Barclays TIPS Bond has doubled in size and currently stands at well over $16 billion in assets after closing out 2008 at roughly $8 billion," said Gabriel, the ETF analyst.
He said another bond ETF gobbling new assets is the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD), which has about $13 billion.
"This year we've also seen investors rush into junk bonds with hopes of cultivating equitylike returns and generous yields, thanks to the historic widening of yield spreads in recent months," the analyst observed.
Two of the largest ETFs in this category, which has benefited from a reappearance of investor appetite for risk, are SPDR Barclays Capital High Yield Bond (JNK) and iShares iBoxx $ High Yield Corporate Bond (HYG).
Digging Gold And Other Commodities
Inflation fears also have pushed investors into ETFs tracking gold and other commodities.
Investors can get exposure to gold prices with ETFs such as SPDR Gold Shares (GLD), which trades on the NYSE Arca exchange and charges annual fees of 0.4%. This huge ETF holds more than $37 billion in assets and has been a popular vehicle to trade the precious metal, with gold futures over $1,000.
Gabriel said strong interest in commodities markets is being driven by "tactical strategies looking to join in on the popular 'reflation' trade and more folks allocating a portion of their portfolios to commodities for the longer-term diversification benefits that this non-correlated asset class can provide."
However, some commodities ETFs that invest in futures contracts have run into trouble lately as a result of position limits imposed by the Commodity Futures Trading Commission.
Some of the funds are broad-based and hold several commodities, such as PowerShares DB Commodity Index Tracking (DBC). The ETF, with assets of nearly $4 billion, recently expanded the number of commodities it tracks as a result of the CFTC's stepped-up examination of certain ETFs.
Some ETFs like United States Oil Fund LP (USO) track individual commodities. Additionally, there are commodity-themed ETFs that invest in stocks, rather than futures.
Eyeing Emerging Markets
The big rally in emerging markets has attracted investors to this volatile sector. Two of the top-selling funds this year are the iShares MSCI Emerging Markets Index Fund (EEM) and the Vanguard Emerging Markets ETF (VWO). The latter fund recently posted a year-to-date gain of 73.5%.
ETFs targeting individual developing countries such as the iShares MSCI Brazil Index Fund (EWZ) have also garnered interest.
"With hopes of increased U.S. and European demand for commodity and other emerging markets exports bolstered by a good start to the third-quarter earnings season and the latest Chinese trade numbers, investors poured money into emerging markets equity funds during the second week of October," said investment researcher EPFR Global in its latest weekly update.
"Aside from hunting for low-duration bond ETFs in an effort to avoid excessive interest rate risk, it appears that investors are also bracing their portfolios for a potential long-term bout of inflation," said John Gabriel, ETF analyst at Morningstar Inc.
He said industrywide ETF assets topped $700 billion last month, with year-to-date inflows of $56.3 billion. "ETF industry flows have been quite strong so far in 2009, with positive flows in every month except February," Gabriel said.
So where is the money going? Into bonds, commodities and international stocks, particularly the emerging markets subcategory. Leveraged and inverse ETFs, the high-powered funds that have attracted regulatory scrutiny this year, saw positive inflows in September after investors pulled money the previous two months.
Bonding With Bonds
For the major asset classes, taxable-bond ETFs hauled in the most new money in September, according to Morningstar.
The preference for bond ETFs mirrors the buying trends in mutual funds. Many retail investors sat out the rally that started in March. Still wary of stocks after their plunge during the credit crunch, individual investors have piled into bond funds.
"The shift into fixed-income ETFs has been an ongoing theme thus far in 2009; year-to-date the category has brought in about $26.7 billion of new assets, which makes it the most popular ETF category so far in 2009," Gabriel pointed out. "For some perspective, consider that taxable-bond ETFs attracted approximately $17 billion in all of 2008."
The earliest ETFs tracked stocks, but the bond side of the business is growing. At the end of September, there were 768 U.S.-listed ETFs. Of these, 68 were fixed-income funds, with about $91 billion in total assets, according to research from State Street Global Advisors.
"From their start with a handful of options in the 1990s, ETFs have grown up around a clear value proposition, low-fee offerings that allow for diversification and/or targeted investment themes," said Nicholas Colas, ConvergEx chief market strategist.
"Their collective success is printed on the tape every day, with products like the SPDR S&P 500 ETF (SPY), PowerShares QQQ Trust (QQQQ) and Financial Select Sector SPDR Fund (XLF) at the top of the volume tables for exchanges, alternative trading venues and dark pools," he said.
In terms of size, one bond fund that has been roaring up the charts is designed to protect investors from inflation: the iShares Barclays TIPS Bond Fund (TIP). The ETF, which is indexed to a basket of Treasury Inflation-Protected Securities, has grown to nearly $17 billion in assets.
"After enjoying more than $6.5 billion in net inflows year-to-date, iShares Barclays TIPS Bond has doubled in size and currently stands at well over $16 billion in assets after closing out 2008 at roughly $8 billion," said Gabriel, the ETF analyst.
He said another bond ETF gobbling new assets is the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD), which has about $13 billion.
"This year we've also seen investors rush into junk bonds with hopes of cultivating equitylike returns and generous yields, thanks to the historic widening of yield spreads in recent months," the analyst observed.
Two of the largest ETFs in this category, which has benefited from a reappearance of investor appetite for risk, are SPDR Barclays Capital High Yield Bond (JNK) and iShares iBoxx $ High Yield Corporate Bond (HYG).
Digging Gold And Other Commodities
Inflation fears also have pushed investors into ETFs tracking gold and other commodities.
Investors can get exposure to gold prices with ETFs such as SPDR Gold Shares (GLD), which trades on the NYSE Arca exchange and charges annual fees of 0.4%. This huge ETF holds more than $37 billion in assets and has been a popular vehicle to trade the precious metal, with gold futures over $1,000.
Gabriel said strong interest in commodities markets is being driven by "tactical strategies looking to join in on the popular 'reflation' trade and more folks allocating a portion of their portfolios to commodities for the longer-term diversification benefits that this non-correlated asset class can provide."
However, some commodities ETFs that invest in futures contracts have run into trouble lately as a result of position limits imposed by the Commodity Futures Trading Commission.
Some of the funds are broad-based and hold several commodities, such as PowerShares DB Commodity Index Tracking (DBC). The ETF, with assets of nearly $4 billion, recently expanded the number of commodities it tracks as a result of the CFTC's stepped-up examination of certain ETFs.
Some ETFs like United States Oil Fund LP (USO) track individual commodities. Additionally, there are commodity-themed ETFs that invest in stocks, rather than futures.
Eyeing Emerging Markets
The big rally in emerging markets has attracted investors to this volatile sector. Two of the top-selling funds this year are the iShares MSCI Emerging Markets Index Fund (EEM) and the Vanguard Emerging Markets ETF (VWO). The latter fund recently posted a year-to-date gain of 73.5%.
ETFs targeting individual developing countries such as the iShares MSCI Brazil Index Fund (EWZ) have also garnered interest.
"With hopes of increased U.S. and European demand for commodity and other emerging markets exports bolstered by a good start to the third-quarter earnings season and the latest Chinese trade numbers, investors poured money into emerging markets equity funds during the second week of October," said investment researcher EPFR Global in its latest weekly update.
Wednesday, October 7, 2009
Emerging Markets Eastern Europe Index Fund (NYSEArca: ESR)
Barclays Global Investors introduced the iShares MSCI Emerging Markets Eastern Europe Index Fund (NYSEArca: ESR). The fund follows stocks from the Czech Republic, Hungary, Poland and Russia. ESR is benchmarked to the MSCI Emerging Markets Eastern Europe Index.
ESR holds 47 stocks and has annual expenses of 0.72%.
ESR holds 47 stocks and has annual expenses of 0.72%.
Thursday, October 1, 2009
Grail set to kick off active ETFs
Trading will begin tomorrow on four actively managed exchange-traded funds launched by Grail Advisors LLC.
Grail Advisors will serve as the lead manager of the four funds: RP Growth ETF (RPX), RP Focused Large Cap Growth ETF (RWG), RP Technology ETF (RPQ), and RP Financials ETF (RFF), according to a statement released today.
RiverPark Advisors LLC will serve as the primary subadviser for each the funds, while Wedgewood Partners Inc. will serve as a co-subadviser to the RP Focused Large Cap Growth ETF.
Total operating expenses for each of the funds will be limited to 0.89% of average daily net assets annually, Grail said in the statement.
The firm is also discussing plans with several financial institutions and asset managers to launch customized, actively managed ETFs, including fixed-income funds, William Thomas, chief executive of Grail Advisors, said in the statement.
Wednesday, September 30, 2009
SunGard’s New ETF Retirement Plan Solution Helps TPAs and Advisors Gain Efficiency and Reliability
CMC Interactive, Ingham Retirement Group, APA Benefits and KTRADE have selected SunGard’s new Exchange Traded Funds (ETF) solution, which SunGard launched in July 2009 to help advisors and third party administrators (TPAs) seamlessly incorporate iShares ETFs as standard options in retirement plans. All four firms use SunGard’s Reliusemployee benefitrecordkeeping and administrative solution and the SunGard Transaction Network (STN) to facilitate connectivity and trading with iShares.
Michael Calandra, co-founder and principal of CMC Interactive, said, “With SunGard’s ETF solution, we can add ETFs seamlessly to our existing trading operations. The process is similar to that of mutual funds, providing an easy set-up process while helping us gain the operational and cost efficiencies of offering ETFs and mutual funds within the same plan.”
In recent years, there has been an upsurge in popularity with ETFs among financial advisors and their clients. iShares ETFs offer investors reasonable and transparent fees, a flexible investment lineup and risk management through portfolio diversification. SunGard’s ETF solution provides a cost-effective, automated solution to help defined contribution plans add ETFs to their retirement plans using a single software provider for integrated trading, recordkeeping and custodial services.
Jared Hanks, vice president at APA Benefits, said, “SunGard’s ETF solution provides the capabilities we need to include ETFs in our 401(k) plans in an integrated environment. As a result, we are able to provide more diversified investment options and more transparent, differentiated offerings to our clients.”
Although SunGard’s ETF solution works in conjunction with many recordkeeping systems and TPAs, advisors using SunGard’s Omni and Relius benefit administration recordkeeping platforms are able to access and trade iShares ETFs through an integrated link to STN. STN helps streamline trading and data flows between iShares and recordkeeping and accounting systems. For custody and settlement services, SunGard is leveraging the ETFxChange platform provided by Mid-Atlantic Trust Company (MATC).
Kevin Rafferty, president of SunGard’s wealth management business, said, “ETFs continue to establish themselves as a key market differentiator for benefit administrators and advisors. SunGard’s ETF solution helps provide TPAs and advisors with an efficient and reliable platform for adding ETFs to plans using a familiar process, while helping them to deliver a broader set of investment options to help clients fund their retirement.”
SunGard is a leading provider of wealth management solutions that help banks, trust companies, brokerage firms, insurance firms, benefit administrators and independent advisors acquire, service and grow their client relationships.
Michael Calandra, co-founder and principal of CMC Interactive, said, “With SunGard’s ETF solution, we can add ETFs seamlessly to our existing trading operations. The process is similar to that of mutual funds, providing an easy set-up process while helping us gain the operational and cost efficiencies of offering ETFs and mutual funds within the same plan.”
In recent years, there has been an upsurge in popularity with ETFs among financial advisors and their clients. iShares ETFs offer investors reasonable and transparent fees, a flexible investment lineup and risk management through portfolio diversification. SunGard’s ETF solution provides a cost-effective, automated solution to help defined contribution plans add ETFs to their retirement plans using a single software provider for integrated trading, recordkeeping and custodial services.
Jared Hanks, vice president at APA Benefits, said, “SunGard’s ETF solution provides the capabilities we need to include ETFs in our 401(k) plans in an integrated environment. As a result, we are able to provide more diversified investment options and more transparent, differentiated offerings to our clients.”
Although SunGard’s ETF solution works in conjunction with many recordkeeping systems and TPAs, advisors using SunGard’s Omni and Relius benefit administration recordkeeping platforms are able to access and trade iShares ETFs through an integrated link to STN. STN helps streamline trading and data flows between iShares and recordkeeping and accounting systems. For custody and settlement services, SunGard is leveraging the ETFxChange platform provided by Mid-Atlantic Trust Company (MATC).
Kevin Rafferty, president of SunGard’s wealth management business, said, “ETFs continue to establish themselves as a key market differentiator for benefit administrators and advisors. SunGard’s ETF solution helps provide TPAs and advisors with an efficient and reliable platform for adding ETFs to plans using a familiar process, while helping them to deliver a broader set of investment options to help clients fund their retirement.”
SunGard is a leading provider of wealth management solutions that help banks, trust companies, brokerage firms, insurance firms, benefit administrators and independent advisors acquire, service and grow their client relationships.
Tuesday, September 15, 2009
Record-Breaking August for ETFs
The August ETF numbers are in, and the industry continues to grow as new investors discover ETFs, old investors wade back into the markets and ETF providers continue to launch exciting new products.
Total assets in U.S.-listed exchange traded products surged to $678 billion, a 4% increase since previous highs in July. Year-to-date, assets are up 25%. Funds in fixed income, commodities and emerging markets are raking in the highest flows and garnering the most interest, explains Sam Mamudi for The Wall Street Journal.
The industry had 846 exchange-traded products from 36 providers at the end of August. The latest regulation may curb some of the buying interest for those investors seeking commodity exposure through ETFs, as regulators try to curb speculation they believe has led to volatility in the market.
Other than that, ETFs are touted for their flexibility to trade on an exchange like a single stocks with transparency and liquidity. The amount of exposure that an ETF yields is unsurpassed, and investors love the lower fees and tax efficiencies that come with most ETFs, as well.
This year has been especially challenging for the industry in general, but the growth the ETF business has seen is a good indicator that when markets see a more firm rebound, ETFs will become even more prolific and popular with investors of all types.
Wednesday, September 9, 2009
Deutsche Bank to Liquidate Oil ETN (DXO)
9/15/09 update: my DXO shares were redeemed for cash today @ $4.37
Deutsche Bank announced that it will redeem all outstanding PowerShares DB Crude Oil Double Long Exchange Traded Notes (NYSEArca: DXO - News). DXO attempts to double the monthly performance of the Deutsche Bank Liquid Commodity Index - Optimum Yield Oil Excess Return Index. At the end of July, DXO had $597 million in assets.
Faced with restrictions by commodity regulators, DXO's managers have been unable to obtain adequate exposure to crude oil for the note's normal operation. As a result, Deutsche Bank chose to redeem the notes.
Other commodity exchange- traded products have faced similar difficulties amid an increasingly restrictive regulatory environment impacting investments that use commodity futures.
Last week, Barclays Global Investors (BGI) temporarily suspended the creation of new shares for its iShares S&P GSCI Commodity-Indexed Trust (NYSEArca: GSG - News). GSG's performance is linked to the S&P GSCI Total Return Index, which consists of a diversified group of 24 different commodities. Like other commodity ETFs and ETNs it uses commodity futures contracts to obtain its market exposure.
In late August, the U.S. Commodity Futures Trading Commission announced its plan to withdraw two no-action letters that originally provided exemptive relief from federal agricultural speculative positions limits set forth in CFTC regulations. The letters pertain to the PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC - News), which was previously allowed to take positions in corn and wheat futures that exceeded federal limits. The revised restrictions limiting commodity positions become effective on October 31st and will force PowerShares and Deutsche Bank to alter their indexing strategies to comply with the new guidelines.
None of the other notes offered by Deutsche Bank are yet affected by the DXO announcement, nor are the PowerShares DB exchange traded funds offered by DB Commodity Services.
Deutsche Bank expects to provide notice of DXO's redemption on September 9, 2009. The repurchase value of the notes will be determined as of the date notice is given. Payment of the repurchase value of the notes will be made on the third business day following the date of notice. Daily creations of DXO will remain suspended. Daily repurchases at the option of investors will be accepted in the normal manner up to and including September 9th.
Sunday, August 23, 2009
SEC, FINRA, CFTC join debate about controversial ETFs
Industry insiders are concerned that debate about nontraditional exchange-traded funds could harm the broader ETF sector. The Securities and Exchange Commission teamed up with the Financial Industry Regulatory Authority to alert investors about risks associated with leveraged ETFs.
Wednesday, August 19, 2009
SEC issues warning on leveraged ETFs
The Securities and Exchange Commission's warning to investors regarding potential losses from leveraged exchange-traded funds echoes those from the financial industry and others. The SEC cautioned investors to look closely at the ETFs' details. "It is possible you could suffer significant losses even if the long-term performance of the [underlying] index showed a gain," the SEC said.
Tuesday, August 11, 2009
Vanguard registers for seven bond ETFs
Some see filing as a challenge to iShares, as four of the funds would be cheaper
Vanguard today filed a registration statement with the Securities and Exchange Commission to offer seven new bond index exchange traded funds in what some industry experts believe to be a direct challenge to iShares, the dominant fixed-income ETF provider.
Three of the ETFs are expected to invest in U.S. Treasuries, three in corporate bonds and one in mortgage-backed securities, according to the filling from The Vanguard Group Inc. of Malvern, Pa.
The ETFs — planned as shares of proposed bond index funds — all come with expected expense ratios of 0.15%.
That is the same expense ratio iShares, a unit of Barclays Global Investors of San Francisco, charges for its comparable U.S. Treasury ETFs, but lower than the 0.20% it charges for comparable ETFs that invest in corporate bonds and the 0.25% it charges for its comparable mortgaged-backed ETF.
It appears as if Vanguard’s goal is to wrest “control of the exchange-traded bond fund market from Barclays’ iShares group,” Daniel Wiener, the Brooklyn, N.Y.-based chairman and chief executive of Adviser Investment Management Inc. of Newton, Mass., which manages more than $1 billion in assets, wrote in an e-mail.
Vanguard, however, has a long way to go before it can best iShares.
Vanguard offers five fixed-income ETFs with more than $8 billion in assets, while iShares offers 27 bond ETFs with total assets of more than $63 billion, according to Morningstar Inc. of Chicago.
more at
Friday, August 7, 2009
ETF assets hit a record $862B worldwide
The United States accounts for $582B in assets, according to BGI researchers
Exchange traded fund assets worldwide hit an all-time high of $862 billion at the end of July, 7% above the previous record of $805 billion set in April 2008, according to data released today from the London-based research team of Barclays Global Investors in San Francisco.
The assets were generated by 1,768 ETFs with 3,129 listings from 94 providers on 42 exchanges around the world.
U.S. ETF assets chalked up a personal best — $582 billion at the end of July, topping the previous high-water mark of $581 billion in December 2007.
The U.S. ETF industry had 706 ETFs from 22 providers on three exchanges.
European ETF assets accounted for $183 billion — another record — at the end of July, 8.4% above the previous high of $168 billion set in May and 14.2% above the high of $160 billion recorded in July 2008.
The European ETF industry had 753 ETFs with 1,890 listings from 32 providers on 20 exchanges.
The other $40 billion in ETF assets were generated in the Asia, Latin America, Middle East and Africa markets.
The assets were generated by 1,768 ETFs with 3,129 listings from 94 providers on 42 exchanges around the world.
U.S. ETF assets chalked up a personal best — $582 billion at the end of July, topping the previous high-water mark of $581 billion in December 2007.
The U.S. ETF industry had 706 ETFs from 22 providers on three exchanges.
European ETF assets accounted for $183 billion — another record — at the end of July, 8.4% above the previous high of $168 billion set in May and 14.2% above the high of $160 billion recorded in July 2008.
The European ETF industry had 753 ETFs with 1,890 listings from 32 providers on 20 exchanges.
The other $40 billion in ETF assets were generated in the Asia, Latin America, Middle East and Africa markets.
Tuesday, August 4, 2009
Regulators ask brokerages about inverse, leveraged ETFs
After Edward D. Jones, Ameriprise Financial, LPL Investment Holdings and UBS Financial Services restricted or suspended sales of leveraged and inverse exchange-traded funds, regulators in Massachusetts are demanding answers about the products. "The concern is that [inverse and leveraged ETFs] are, or can be, very volatile funds, very risky, and that they are being offered to investors who aren't sophisticated and may not be aware of the risks they are getting into," said Brian McNiff, a spokesman for Secretary of the Commonwealth William F. Galvin.
more at
Tuesday, July 28, 2009
UBS Brokerage Suspends U.S. Sales of Leveraged ETFs
UBS AG’s U.S. brokerage business stopped selling exchange-traded funds that use leverage because the products don’t conform to its emphasis on long-term investing.
UBS Wealth Management Americas suspended sales of inverse and leveraged ETFs immediately, citing the “short-term nature of these securities,” the New York-based brokerage said in a statement today. Edward Jones, a St. Louis-based brokerage, and Minneapolis-based Ameriprise Financial Inc. have also halted leveraged-ETF sales.
The Financial Industry Regulatory Authority and Massachusetts Secretary of the Commonwealth William Galvin said in the past two months that leveraged and inverse ETFs might not be appropriate for individual investors. The funds’ assets have increased 51 percent to $32.8 billion this year, according to data from State Street Corp., a Boston-based company that sells ETFs and tracks the industry.
UBS Wealth Management Americas suspended sales of inverse and leveraged ETFs immediately, citing the “short-term nature of these securities,” the New York-based brokerage said in a statement today. Edward Jones, a St. Louis-based brokerage, and Minneapolis-based Ameriprise Financial Inc. have also halted leveraged-ETF sales.
The Financial Industry Regulatory Authority and Massachusetts Secretary of the Commonwealth William Galvin said in the past two months that leveraged and inverse ETFs might not be appropriate for individual investors. The funds’ assets have increased 51 percent to $32.8 billion this year, according to data from State Street Corp., a Boston-based company that sells ETFs and tracks the industry.
more at
SunGard Teams with iShares to Launch New Exchange-Traded Funds Retirement Plan Solution
SunGard, in conjunction with iShares, a leading global provider of exchange-traded funds (ETFs), will be launching a new solution to help advisors and third party administrators (TPAs) seamlessly incorporate ETFs as standard options in retirement plans. SunGard’s ETF solution offers a cost-effective and automated solution to help defined contribution plans add ETFs to their retirement plans, an otherwise traditionally expensive and operationally burdensome process.
TPAs and advisors using SunGard’s Omni and Relius recordkeeping platforms for benefit administration will be able to access and trade iShares ETFs through an integrated link to the SunGard Transaction Network (STN). ETF custodial services will be provided by Mid Atlantic Trust Company’s ETFxChange platform.
While ETF trading has increased significantly over the last several years, the operational barriers of trading ETFs using mutual fund-driven recordkeeping systems has limited their growth in retirement plans. SunGard will help retirement plan providers that choose to invest in ETFs to do so efficiently using proven systems for mutual funds with enhanced processing specifically for ETFs. SunGard’s ETF solution, integrating STN Funds, Omni and Relius, will help TPAs and advisors trade and settle ETFs like no-load mutual funds. The new SunGard solution will help TPAs or their advisors to integrate both ETFs and mutual funds within 401(k), 457 or 403(b) retirement plans, while helping to minimize operational overhead and disruption.
Darek Wojnar, head of product strategy at iShares, said, “ETFs have continued to experience tremendous growth as investors seek alternative options to fund their retirement. SunGard’s ETF solution will help provide the trading support and operational efficiencies that TPAs and their advisors need to help clients better manage risk through portfolio diversification.”
Kevin Rafferty, president of SunGard’s wealth management business, said, “ETFs are gaining momentum by infusing more transparency and performance into defined contribution plans and the personal investment management process. SunGard’s expertise in integrated trading, recordkeeping and administration will support ETFs within retirement plans, providing investors and their service providers with a broader set of investment options from iShares, a leader in this space.”
TPAs and advisors using SunGard’s Omni and Relius recordkeeping platforms for benefit administration will be able to access and trade iShares ETFs through an integrated link to the SunGard Transaction Network (STN). ETF custodial services will be provided by Mid Atlantic Trust Company’s ETFxChange platform.
While ETF trading has increased significantly over the last several years, the operational barriers of trading ETFs using mutual fund-driven recordkeeping systems has limited their growth in retirement plans. SunGard will help retirement plan providers that choose to invest in ETFs to do so efficiently using proven systems for mutual funds with enhanced processing specifically for ETFs. SunGard’s ETF solution, integrating STN Funds, Omni and Relius, will help TPAs and advisors trade and settle ETFs like no-load mutual funds. The new SunGard solution will help TPAs or their advisors to integrate both ETFs and mutual funds within 401(k), 457 or 403(b) retirement plans, while helping to minimize operational overhead and disruption.
Darek Wojnar, head of product strategy at iShares, said, “ETFs have continued to experience tremendous growth as investors seek alternative options to fund their retirement. SunGard’s ETF solution will help provide the trading support and operational efficiencies that TPAs and their advisors need to help clients better manage risk through portfolio diversification.”
Kevin Rafferty, president of SunGard’s wealth management business, said, “ETFs are gaining momentum by infusing more transparency and performance into defined contribution plans and the personal investment management process. SunGard’s expertise in integrated trading, recordkeeping and administration will support ETFs within retirement plans, providing investors and their service providers with a broader set of investment options from iShares, a leader in this space.”
Monday, July 27, 2009
Firms opt against selling leveraged ETFs after FINRA's warning
The Financial Industry Regulatory Authority recently warned that leveraged exchange-traded funds "typically are unsuitable for retail investors" because such investors tend to hold them for longer than a day. The warning prompted Edward D. Jones, LPL Investment Holdings and Ameriprise Financial to ban sales of some leveraged ETFs. Direxion Funds is arguing that the ETFs can be used successfully and is trying to get the brokerage firms to reconsider their bans.
more at
Sunday, July 12, 2009
First U.S. Shariah-compliant ETF
The latest iteration of social and religious investment screens hit the market on the last trading day of June with the launch of the JETS Dow Jones Islamic Market International Index Fund (JVS). The exchange traded fund is not only the first product offering from Princeton, N.J.-based Javelin Investment Management LLC, but it is also the first American ETF to adhere to Islamic beliefs about investing and finance.
The total population of Muslims in the United States is estimated to be 2.35 million, according to a 2007 report released by the Pew Research Center in Washington.
“Islamic investing is gaining acceptance in this country, but this [ETF] is serving an untapped market,” said Chuck Tennes, a Javelin spokesman.
Islamic investment screens are well-established through such mutual funds as the $1 billion Amana Growth Fund (AMAGX) offered by Saturna Capital Corp. in Bellingham, Wash.
The Amana mutual fund, which has been around for more than 15 years, has a five-star rating from Morningstar Inc. in Chicago.
This year through July 9, the actively managed fund was up 5.9%, compared with an average gain of 6.08% by Morningstar's large-cap-growth category.
Over the 12-month period through July 9, the fund was down 18.66%, while the category average declined by 27.61%.
The Javelin ETF is pegged to the Dow Jones Islamic Market Titans 100 Index, which is made up of 100 companies located outside the United States, representing 23 countries and 18 currencies.
Eighteen percent of the fund's assets are allocated to the United Kingdom, 10.8% to France, 10.6% to Canada, 9.2% to Switzerland and 9.2% to Japan.
The Islamic index was created in March, but on a back-tested basis it gained 14.4% this year through May 29. That compares with a 17.6% gain by the Standard & Poor's 500 stock index over the same period.
The index tracks companies whose activities comply with Shariah Islamic law, which prohibits anything related to alcohol, gaming, pork products and certain forms of entertainment. It specifically bans borrowing and lending.
“By not trying to make money on money, the fund should reduce the impact of financial activity,” Mr. Tennes said. “There will be more of an emphasis on basic industries like oil and gas.”
***
HEDGING MUTUAL FUNDS
The pursuit of non-correlated investment returns also has produced some new strategies at Commonwealth Financial Network, which has started adding hedge-like mutual funds to some of its mutual fund wrap portfolios.The Waltham, Mass.-based independent broker-dealer, which is affiliated with more than 1,300 representatives, says it is responding to demand from advisers and their clients for more alternative investment options.
Alternative strategies are not entirely new to the $40 billion Commonwealth investment platform. Advisers have long been able to access such alternative products as oil and gas investment trusts, non-traded real estate investment trusts and managed futures.
But introducing alternative strategies into the brokerage firm's three-year-old mutual fund wrap program offers more options to those investors not necessarily qualified to invest in pure alternatives.
“It gives our reps a bigger, broader story to talk with their clients about,” said Simon Heslop, the firm's director of asset management.
Mr. Heslop, working with about 12 colleagues, is responsible for infusing an eclectic raft of registered mutual funds offering alternative strategies into three wrap programs.
The programs, which normally allocate 40% and 80% of their assets to equity mutual funds, will replace some of that equity exposure with new allocations of between 15% and 25% to alternative strategies.
The alternative strategies focus on managed futures, commodities, market neutral, long-short and arbitrage, Mr. Heslop said.
The alternatives option was introduced last month and so far, Mr. Heslop said, the launch has been predictably slow.
“We've only opened a handful of accounts, but we're always a little slow on the uptake,” he said. “Our motivation was significant demand from the field, so we wanted to find some solutions to limit the volatility and downside in the markets.”
Monday, May 11, 2009
After exploding, ETF industry poised for consolidation
The industry of exchange-traded funds has experienced rapid growth since it exploded on the investment scene. Market volatility is still high despite a recent rally in stock markets. The volatility helps boost interest in low-cost, flexible ETFs. Experts said the next step for the ETF industry, which has added numerous variations in the past couple of years, is likely consolidation.
more at
Thursday, May 7, 2009
Deutsche Börse receives four Global ETF Awards
Awards for Deutsche Börse as the exchange with the largest number of ETF listed products, as the most proactive exchange for ETFs, the largest exchange for ETFs by turnover and the most innovative ETF index provider. This year’s Global ETF Awards in New York saw Deutsche Börse receive awards in the following categories for the fifth consecutive time: “Exchange with the largest number of ETF listed products Europe”, “Most Proactive exchange for ETFs Europe” and “Largest exchange for ETFs Europe (by turnover)”. Deutsche
Börse also received the award as “Most innovative ETF Index provider Europe” for the second time in a row.
The “5th Annual Global ETF Awards” was organized by exchangetradedfunds.com, an information provider based in New York which specializes in exchange traded index funds. The Global ETF Awards are presented to innovative companies that make outstanding contributions to the development of the ETF market. The awards are decided by international entities from the ETF industry, and based on statistics.
Xetra, Deutsche Börse’s fully-electronic pan-European trading platform, is Europe’s largest trading venue for exchange traded funds with a market share of 39 percent. Out of 14 issuers, its product offering is the largest in Europe, currently with 445 ETF and 136 ETC listings. It enables investors to compile a broadly diversified portfolio of equities, bonds and commodities with low transaction costs. More than 250 market participants from 18 countries have access to trading in index products at Deutsche Börse.
Deutsche Börse’s Market Data & Analytics division develops, calculates and disseminates around 3,000 indices, making it one of the world’s most renowned index providers. The Deutsche Börse indices have clear and transparent index rules and are aimed at tradable and liquid securities. This makes them attractive for investors, product developers and issuers the world over. Over €11 billion is invested in ETFs based on Deutsche Börse indices. DAXglobal® Russia index is one of the world’s most successful underlyings for ETFs.
The world’s first ETFs to be issued on derivative strategy indices are based on Deutsche Börse’s DAXplus® Covered Call and Daxplus® Protective Put indices.
ETFs have developed into one of the most successful financial products in Europe within nine years. Thanks to continual cash inflows, Deutsche Börse’s XTF segment has recorded excellent growth rates since its launch in April 2000. Fund assets reached the record level of €81.3 billion as of the end of December 2008 – in spite of the financial crisis – and were thus 26 percent above the prior-year level (Dec. 2007: €64.3 billion). In contrast, the MSCI World Index lost 39 percent in the same period. The growth has been driven by increasing recognition and the variety of uses for ETFs and ETCs, which can be used in a growing number of markets and regions thanks to numerous new product launches.
Total annual turnover reached a new record level in 2008, of €123.5 billion, a year-on-year increase of 13 percent. The average monthly trading volume in 2008 was over the €10 billion mark for the first time, with October the best month of the year with over €16 billion.
Turnover and assets under management decreased slightly in the first quarter of 2009. Assets under management fell by 7 percent to €75.4 billion by the end of March 2009. The average trading volume for the first three months of the year amounted to €9.0 billion.
Börse also received the award as “Most innovative ETF Index provider Europe” for the second time in a row.
The “5th Annual Global ETF Awards” was organized by exchangetradedfunds.com, an information provider based in New York which specializes in exchange traded index funds. The Global ETF Awards are presented to innovative companies that make outstanding contributions to the development of the ETF market. The awards are decided by international entities from the ETF industry, and based on statistics.
Xetra, Deutsche Börse’s fully-electronic pan-European trading platform, is Europe’s largest trading venue for exchange traded funds with a market share of 39 percent. Out of 14 issuers, its product offering is the largest in Europe, currently with 445 ETF and 136 ETC listings. It enables investors to compile a broadly diversified portfolio of equities, bonds and commodities with low transaction costs. More than 250 market participants from 18 countries have access to trading in index products at Deutsche Börse.
Deutsche Börse’s Market Data & Analytics division develops, calculates and disseminates around 3,000 indices, making it one of the world’s most renowned index providers. The Deutsche Börse indices have clear and transparent index rules and are aimed at tradable and liquid securities. This makes them attractive for investors, product developers and issuers the world over. Over €11 billion is invested in ETFs based on Deutsche Börse indices. DAXglobal® Russia index is one of the world’s most successful underlyings for ETFs.
The world’s first ETFs to be issued on derivative strategy indices are based on Deutsche Börse’s DAXplus® Covered Call and Daxplus® Protective Put indices.
ETFs have developed into one of the most successful financial products in Europe within nine years. Thanks to continual cash inflows, Deutsche Börse’s XTF segment has recorded excellent growth rates since its launch in April 2000. Fund assets reached the record level of €81.3 billion as of the end of December 2008 – in spite of the financial crisis – and were thus 26 percent above the prior-year level (Dec. 2007: €64.3 billion). In contrast, the MSCI World Index lost 39 percent in the same period. The growth has been driven by increasing recognition and the variety of uses for ETFs and ETCs, which can be used in a growing number of markets and regions thanks to numerous new product launches.
Total annual turnover reached a new record level in 2008, of €123.5 billion, a year-on-year increase of 13 percent. The average monthly trading volume in 2008 was over the €10 billion mark for the first time, with October the best month of the year with over €16 billion.
Turnover and assets under management decreased slightly in the first quarter of 2009. Assets under management fell by 7 percent to €75.4 billion by the end of March 2009. The average trading volume for the first three months of the year amounted to €9.0 billion.
Tuesday, April 14, 2009
Interactive Data Helps ETF.com Expand Its Services for Financial Planners and Investors
Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related solutions, today announced that its Managed Solutions business has developed a series of enhancements for ETF.com, a leading Web site that offers sophisticated research for exchange-traded funds (ETFs) listed on U.S. exchanges.
ETF.com leverages Interactive Data’s capabilities for displaying and analyzing data on ETFs, including profiles, charts, screeners, and analytics — providing Web site visitors with a comprehensive set of free research tools. Detailed quote information such as fundamentals, performance and market cap, along with rankings of the top performing ETFs by multiple categories, are also now available on the Web site. ETF.com is now also able to deliver side-by-side fund comparison tables and performance charts that can be measured against a benchmark.
ETF.com leverages Interactive Data’s capabilities for displaying and analyzing data on ETFs, including profiles, charts, screeners, and analytics — providing Web site visitors with a comprehensive set of free research tools. Detailed quote information such as fundamentals, performance and market cap, along with rankings of the top performing ETFs by multiple categories, are also now available on the Web site. ETF.com is now also able to deliver side-by-side fund comparison tables and performance charts that can be measured against a benchmark.
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