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"Speculators and Commodity Prices"
Opening Remarks of Commissioner Bart Chilton to the Futures Industry Association's Panel Discussion: Financial Investors' Impact on Commodity Prices, Boca Raton, FL
March 16, 2011--When I came to the Commission in 2007, I began to hear rumblings about "new" speculators in commodity markets, and their effects on prices. Now I was quite familiar, as we all were, with the traditional hedger and speculator roles, but as security portfolios began to show weaker returns, folks started to try and figure out how to improve their investments, and many of them looked to the commodities world.
This "new" class of investor represented a significant asset class shift from what most of us were familiar. And, as these commodity investments began to pay off, this new class increased in size—in fact, they became massive. In just a few years, by 2008, over $200 billion in "passive" investment (that is, folks who are going long and staying long) came into the commodities markets. The question is: What does this mean? Is it a good thing, a bad thing, or neutral?
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Source: CFTC.gov
CBOE To Launch Options On Volatility Indexes Of Individual Stock And Crude Oil ETFs
March 16, 2011--The Chicago Board Options Exchange (CBOE) today announced that it has filed for Securities and Exchange Commission (SEC) approval to list options based on recently-created volatility indexes that track individual stocks — Apple (AAPL), Amazon (AMZN), Goldman Sachs (GS), Google (GOOG), and IBM (IBM) — using CBOE's widely-followed CBOE Volatility Index (VIX) methodology.
"Stock VIXes," first introduced in January as volatility benchmarks, have allowed investors to track individual stock volatility with a quantifiable measurement for the first time. Pending regulatory approval, investors will have the ability to trade options contracts based on the volatility component of the individual stock.
In addition, CBOE's rule filing would permit the trading of options on the CBOE Crude Oil ETF Volatility Index (OVX), based on United States Oil Fund (USO) options. The CBOE Crude Oil ETF Volatility Index (OVX) has been calculated and disseminated by the CBOE since 2008 and, pending approval, will have a tradable contract tied its benchmark, allowing investors to hedge the risk of volatility in the active oil sector for the first time.
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Source: CBOE
CBOE Extends Its Volatility Franchise: Applies VIX Methodology To Six Active ETFs
March 16, 2011--The Chicago Board Options Exchange (CBOE) announced that beginning today, it will apply its proprietary CBOE Volatility Index® (VIX®) methodology to options on six highly-active, sector-specific exchange-traded funds (ETFs):
iShares MSCI Emerging Markets Index Fund (Ticker: VXEEM)
iShares Trust FTSE China 25 Index Fund (Ticker: VXFXI)
iShares MSCI Brazil Index Fund (Ticker: VXEWZ)
Market Vectors Gold Miners Fund (Ticker: VXGDX)
iShares Silver Trust (Ticker: VXSLV)
Energy Select Sector SPDR (Ticker: VXXLE)
The new benchmarks, which offer an important new measure for investors wanting to monitor volatility in specific sectors for ETFs they hold in their portfolios, are designed to measure the expected volatility of the respective ETF options.
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Source: CBOE
CBOE And S&P Announce Formation Of 'VIX Network,' A Global Group Of Exchanges Using The VIX Methodology
March 16, 2011--The Chicago Board Options Exchange (CBOE) and Standard & Poor's (S&P) announced the formation of VIX Network, a global network of exchanges with agreements regarding use of CBOE's VIX® methodology.
The group's inaugural meeting is being held today in Boca Raton, Florida, where exchange leaders from around the world were among the attendees of the 2011 Futures Industry Association (FIA) Conference.
VIX Network is being formed to provide an information-sharing venue for current and potential users of the VIX methodology and to promote VIX as the global standard for measuring market volatility.
The meeting agenda includes a discussion of the ongoing development of VIX Network and its mission as well as a presentation on the history of the CBOE Volatility Index® (VIX®) and VIX products, including obstacles encountered along the way and how CBOE overcame them to create its now highly successful VIX product line.
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Source: CBOE
EGA Emerging Global Shares files with the SEC
March 16, 2011--EGA Emerging Global Shares has filed a post-effective amendment, registration statement with the SEC for the EG Shares India Consumer ETF
EG Shares India Financials ETF
EG Shares India Health Care ETF
EG Shares India Telecom ETF
EG Shares India Industrials ETF
EG Shares India Technology ETF
EG Shares India Utilities ETF
EG Shares India Basic Materials ETF
EG Shares India Energy ETF
EG Shares India High Income Low Beta ETF
EG Shares Emerging Markets High Income Low Beta ETF
EG Shares Emerging Markets Food and Agriculture ETF
view filing
Source: SEC.gov
Global X files with the SEC
March 16, 2011--Global X has filed a post-effective amendment, registration statement with the SEC for the Global X Oil Equities ETF.
view fling
Source: SEC.gov
Traders seek answers on US derivatives reform
March 16, 2011--Amid the turmoil of the markets, the hundreds of executives from trading firms, exchanges and clearing houses meeting this week at Boca Raton in the US are sure of one thing. There are many more of them at this year’s annual industry gathering than during the financial crisis.
The higher numbers partly reflect a strong recovery in the trading of derivatives that are the lifeblood of the members of the Futures Industry Association, the trade body hosting the event in Florida. FIA data show the number of futures and options contracts traded on exchanges globally rose 25.6 per cent last year from 2009.
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Source: FT,com
State Street Global Advisors Selects Celfin Capital to Promote SPDR ETFs in Latin America's Andean Region
March 15, 2011--State Street Global Advisors (SSgA), the asset management business of State Street Corporation (NYSE: STT), today announced that it has entered into an agreement with Celfin Capital, a leading financial service provider in Latin America’s Andean Region, under which Celfin will promote SSgA’s SPDR® exchange traded funds (ETFs).
Recognized as the largest distributor of foreign mutual funds in the region, Celfin will be responsible for promoting SPDR ETFs to institutional investors including pension funds, mutual funds and insurance companies in Chile, Colombia and Peru.
“We are pleased to have been selected to promote the SPDR family of ETFs to our growing client base,” said Alejandro Montero, CEO at Celfin Capital. “As the industry’s pioneer and one of the most recognized brands in the world, SPDR ETFs have undoubtedly transformed investors’ ability to gain efficient exposure to a wide range of sectors, industries, asset classes and geographies through many innovative products. The addition of SPDR ETFs is a great complement to our current offering, and we look forward to a successful collaboration.”
Today, SSgA is one of the largest ETF providers globally with $255 billion in assets as of December 31, 2010* with $2.8 billion** in ETF assets in Latin America as of September 30, 2010.
“In addition to delivering superior client service to both institutional and individual investors in the Andean region, Celfin brings deep knowledge of local and international markets,” said James Ross, senior managing director and global head of SPDR ETFs at State Street Global Advisors. “Our newly formed alliance with Celfin is an important milestone as we continue to expand our SPDR ETF footprint globally to meet investors’ needs.”
Source: State Street Global Advisors
Global X Funds launches Pure Gold Miners ETF, Oil Equities ETF
March 15, 2011 – Global X Funds, the New York based provider of exchange traded funds, today launched two new funds: the Global X Pure Gold Miners ETF (NYSEArca: GGGG) and the Global X Oil Equities ETF (NYSEArca: XOIL). The launches are the latest expansion in the ETF issuer’s global commodity funds suite and are aimed at giving investors a purer play in gold and oil equities, respectively, by following the indexing methodology of the Solactive Indexes.
The goal of the Global X Pure Gold Miners ETF is to provide investors with relatively easy access to companies that get the vast majority of their revenues from gold mining. Unlike other indexes such as the NYSE Arca Gold Mining Index, which actually includes several silver miners, over 95% of the revenues from the companies in the Solactive Index are derived from gold mining. The Global X Pure Gold Miners ETF is a global fund, providing access to gold mining companies listed on exchanges all over the world. As of March 15, 2011, the Fund includes companies based in Canada, the United States, the United Kingdom, Hong Kong, Australia and Turkey.
“Not all gold miner ETFs are created equal and Global X Funds is the first to provide one which is a pure play on gold miners,” said Bruno del Ama, chief executive officer of Global X Funds.
In addition to spurring the demand for gold, recent events in the Middle East have led to soaring prices for another commodity: oil. While many indexes have been developed to track the market price of oil – using oil futures or oil equities, for example – few have been able to accurately track the performance of oil. In order to address this issue, the Global X Oil Equities ETF was developed as a Fund that only includes companies with the highest correlation to oil prices. By using this correlation criterion, the Fund provides exposure to pure-play oil companies with significant oil reserves that are not as involved in other industries such as natural gas or downstream operations.
“We are offering a product for investors looking for exposure to oil while avoiding issues such as contango1 that reduce their returns,” continues Mr. del Ama.
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Source: Global X
Van Eck Global Launches Market Vectors® Colombia ETF
New ETF Offers Direct, Targeted Exposure to Colombian Equities;
Tracks Diversified Pure Play Index
March 15, 2011--New York-based asset manager Van Eck Global has launched Market Vectors Colombia ETF (NYSE Arca: COLX), a new exchange-traded fund (ETF) designed for investors seeking direct, targeted exposure to Colombian equities.
“Investors have long looked to emerging markets for short- and long-term growth opportunities. However, in making their emerging market allocations investors are looking beyond BRIC nations, which in recent history have been among the most popular destinations for investor dollars,” said Jan van Eck, principal with Van Eck Global. “With that in mind, we’re pleased to offer investors a way to access the domestic equity performance of Colombia, a country with significant commodity production capabilities, a recent track record of substantial political reform, and rapidly developing cross-border and cross-exchange cooperation with its neighbors which could spur positive momentum for both that country and the Andean region as a whole.”
COLX seeks to replicate, before fees and expenses, the performance of the Market Vectors Colombia Index (MVCOLXTR), created by 4AssetManagement. MVCOLXTR is a “pure play” index that not only includes local companies domiciled and listed on the Colombian exchange, but also offshore companies that derive the majority of their assets (revenues) in the country. As of March 10, 2011, approximately 74 percent of the equities in the Index were local Colombian companies, while the remainder were listed offshore. The comprehensive nature of the Index, combined with its weighting caps, leads to greater diversification by sector and market cap. Its 27 holdings are made up of approximately 51 percent large-cap equities, 36 percent mid-cap equities, and 13 percent small-caps. As of March 10, the largest sector weightings were Financials (33 percent), Energy (30 percent), and Materials (17 percent). [Transparent, daily index information is available on the Van Eck Global website.]
Colombia is South America’s second largest country and the world’s third largest Spanish-speaking nation by population. A beneficiary of strong commodity price trends, the country has enjoyed improved exports and credit expansion. Fiscal reforms and reduced government debt under former President Alvaro Uribe have opened the country to international investment. GDP growth, led by domestic consumption, was estimated at 4.7% (GDP, %YoY) for 2010 and is anticipated to be approximately 4.6% in 2011.
“Colombia’s commodity-based economy appears poised to experience growth in both trade and foreign direct investment,” adds Allison Lovett, Vice President of Marketing at Van Eck Global. “And the merger of the Colombian stock exchange with Peru’s exchange may further strengthen the country’s position among regional capital markets.”
Van Eck Global notes that investing in emerging markets is not without its risks, which can include economic and political instability, pricing concerns on local exchanges, low trading volume and more, all of which are issues that an investor must consider.
COLX carries a competitive net expense ratio of 0.75 percent and a gross expense ratio of 0.97 percent and joins Van Eck Global’s family of international ETFs, which also includes funds focused on Africa (AFK), Brazil Small-Cap (BRF), China (PEK), Egypt (EGPT), the Gulf States (MES), India Small-Cap (SCIF), Indonesia (IDX), Latin America Small-Cap (LATM), Poland (PLND), Russia (RSX) and Vietnam (VNM).
Source: Van Eck Global
