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Rafferty Asset Management to Close the Direxion Daily 2-Year Treasury ETFs
Closing Reflects Insufficient Trading Demand for Short-Term Treasury Fund Products
November 12, 2010--The Board of Trustees of the Direxion Shares ETF Trust, based upon the recommendation of Rafferty Asset Management, LLC, the Trust's adviser, has determined to close the Direxion Daily 2-Year Treasury Bull 3X Shares (TWOL) and the Direxion Daily 2-Year Treasury Bear 3X Shares (TWOZ).
Due to the Funds' low level of assets, Rafferty determined that the Funds could not continue operations in an economically efficient manner. As such, the Board concluded that it would be in the best interests of each Fund and its shareholders to liquidate and terminate the Funds. The shares of the Funds will cease trading on the NYSE Arca, Inc. and close to new investors as of the close of regular trading on Nov. 30, 2010. Customary brokerage charges may apply to any transactions prior to that time.
"Direxion is focused on only offering solutions that provide exposure to tradable sectors and markets," said Dan O'Neill, President and CIO. "We believe in delivering products that directly meet the demands of sophisticated investors who seek to capitalize on changing market conditions. While interest in 2-Year Treasuries has fallen, investors are displaying ongoing interest in our longer-term Treasury 3x ETFs for transparent and magnified exposure to the Treasury markets."
Between the close of trading on Nov. 30, 2010 and Dec. 7, 2010, the Funds will be in the process of liquidating their portfolio assets. Shares of the Funds will not trade on the NYSE Arca, Inc. during this time. Following the close of trading on Nov. 30, 2010 through Dec. 7, 2010, shareholders only may be able to sell their shares to certain broker-dealers and there is no assurance that there will be a market for the Funds during this time period. In addition, the planned liquidation of the Funds will result in the Funds not tracking their underlying indexes and their cash holdings increasing, which may not be consistent with the Funds' investment objectives and strategies.
Shareholders retaining Fund shares on Dec. 7, 2010 will have their Fund shares redeemed automatically at that time and will receive cash in an amount equal to the net asset value of their shares as of 4:00 p.m. Eastern Time on Dec. 7, 2010. Payments to shareholders will include accrued capital gains and dividends, if any. The net asset value as calculated will reflect the costs of closing the applicable Fund.
Source: Direxion
CFTC to Hold Open Meeting on Fifth Series of Proposed Rules under the Dodd-Frank Act
November 12, 2010-- The Commodity Futures Trading Commission (CFTC) will hold a public meeting on Friday, November 19, 2010, at 9:30 a.m. to consider the issuance of proposed rulemakings under the Dodd-Frank Wall Street Reform and Consumer Protection Act on the following topics:
Swap data repositories;
Real-time public reporting of swap transaction data;
Protection of collateral of counterparties to uncleared swaps, and treatment of securities in a portfolio margining account in a commodity broker bankruptcy; and
Data recordkeeping.
In addition to these proposed rulemakings, the Commission will consider the issuance of an Advance Notice of Proposed Rulemaking involving Protection of Cleared Swaps Customers Before and After Commodity Broker Bankruptcies.
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Source: CFTC.gov
IndexIQ's IQ Real Return ETF Marks One-Year Anniversary
First U.S.-listed real return ETF designed to provide a hedge against inflation; Invests in diverse asset classes including equities, currencies, commodities, fixed income & real estate
November 11, 2010--The IQ Real Return ETF (nyse arca:CPI), the first U.S.-listed real return Exchange-Traded Fund (ETF), marked its one-year anniversary on October 27, 2010, it was announced today by the fund's sponsor, IndexIQ.
The IQ Real Return ETF (CPI) seeks investment results that correspond, before fees and expenses, to the price and yield performance of the IQ Real Return Index. The Index seeks to provide a hedge against the U.S. inflation rate by providing a "real return" or a return above the rate of inflation, as represented by the Consumer Price Index, which is published by the Bureau of Labor Statistics and is a measure of the average change in prices over time of goods and services purchased by households.
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Source: IndexIQ
WisdomTree Responds to Kauffman Foundation's Criticism of ETFs
Open Letter Refutes Inaccurate Claims and Misconceptions
Encourages Fact-based Analysis of Wide-ranging Generalizations
November 11, 2010--WisdomTree , an exchange-traded fund ("ETF") sponsor and asset manager, announced today an open letter responding to a critical ETF industry analysis from the Kauffman Foundation.
The open letter from ETF industry pioneer and WisdomTree President Bruce Lavine is available here or at www.wisdomtree.com.
"We believe the Kauffman Foundation's report reflects a serious misunderstanding of the structure and operation of ETFs and is perpetuating a series of misconceptions in the mainstream media," said Bruce Lavine, WisdomTree President & COO. "We found the primary conclusion of the report, namely that ETFs might collapse because of the ability to short them, to be completely groundless."
Mr. Lavine continued, "We believe it is important for investors to understand the ETF structure so that their options are not limited to structures with higher fees, less liquidity, less tax efficiency, less transparency and less overall flexibility. To that end, we encourage industry participants to view our letter and contact WisdomTree for more information."
Source: WisdomTree
Fund.com Subsidiary AdvisorShares Raises Over $100 Million in Assets Under Management
November 11, 2010--Fund.com, Inc., announced today that its majority-owned subsidiary, AdvisorShares Investments, LLC, an innovator of actively managed Exchange Traded Funds (ETFs), has passed $100 million in assets under management.
The largest ETF in the AdvisorShares family is the AdvisorShares Mars Hill Global Relative Value ETF, the industry's first long/short ETF, which in four months has grown to over $42 million in assets. The AdvisorShares line-up consists of a few other firsts: The AdvisorShares Dent Tactical ETF was the first actively managed ETF of ETFs, and the AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF was the first international actively managed ETF.
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Source: Fund.com
SEC urged to limit ‘identifier’ fees
November 11, 2010--Investors, dealers and government officials active in the US bond markets have urged regulators to limit licensing fees that can be charged for numbers used to identify millions of bonds and other securities.
In a letter sent this week to Mary Schapiro, chairman of the Securities and Exchange Commission, three industry groups said
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Source: FT.com
ETF financial volume grows in October
November 11, 2010--The financial volume registered in October by the seven BM&FBOVESPA Exchange-Traded Funds (ETFs) reached BRL 654.85 million, in contrast to BRL 646 million in September.
The ETFs BRAX11, CSMO11, MOBI11, BOVA11, SMAL11, MILA11 and PIBB11 registered 17,920 trades. In the previous month, the number of trades was 23,391. In October the ETF with the highest financial volume was BOVA11 with BRL 558.24 million, in comparison to its total financial volume of BRL 551.45 in September.
Source: BM&FBOVESPA
Schwab acquires Windward Investment Management
November 10, 2010--The Charles Schwab Corporation today announced an agreement to acquire Windward Investment Management, Inc., for $150 million in stock and cash. The deal is expected to close during the fourth quarter, subject to customary closing conditions.
Headquartered in Boston, Windward Investment Management is an investment advisory firm that manages $3.9 billion at July 31, 2010 in three broadly diversified investment portfolios comprised primarily of ETF securities. Windward's clients include investment advisors, non-profit organizations, endowments, retirement plans, and individuals.
Windward has enjoyed compound annual growth in client assets of 56% per year over the five years ending July 31, 2010, through a combination of strong organic growth and strong investment performance, while delivering solid levels of profitability. At current assets under management (AUM) levels, Schwab anticipates that the acquisition will be modestly accretive to EPS in the first 12 months post-closing, though the company hopes to further leverage Windward's strong track record of growth.
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Source: Charles Schwab
DB Global Equity Index & ETF Research : US ETP Market Weekly Review: Assets Under Management On The Rise
November 10, 2010--US Market Welcomes US Mid-Term Elections Results, QE2 and New Jobs Data
After a quiet couple of weeks, the market resumed its rally on the ground that the outcome from US Elections, QE2 and the new jobs data will be positive and lead towards the expected financial recovery of the US. Although there is no 100% consensus among regulators, analysts and people on whether these results and measures will achieve its goal, the market had a clear response for each of these events.
The US Equity Market, measured by the S&P 500 index, was up 3.6% during last week accompanied by $7.0 bn new flows into US Equity ETPs. The timing of the flows and the market performance was highly correlated to last week’s news.
Amidst this favorable environment, US ETPs AUM reached an all time high of $968 bn for a total 23.9% increase YTD, in line with our average end of year target of 20.9%.
EM Equity ETPs continue to receive steady flows on rising DM Equity flows
ETP flows figures suggest that EM equity markets continue to be appealing to investors as money continues to pour in steadily beyond Q3 into Q4, EM products have received $ 8.8 bn so far into Q4.
On the other hand, the latest economic developments in the DM markets, particularly in the US, have given a boost to the equity markets rally which began in the beginning of September, while at the same time attracting significant inflows. DM ETPs have gathered $7.8 bn of fresh money quarter to date.
Is Gold Riding the Trend On No Steam? Look Out For Silver
The price of gold has climbed 6.52% since the end of Q3 and stands today at all-time record highs. However Gold ETPs flows suggest that there is something wrong with this picture. Unlike the Q2 gold price rally we experienced earlier this year in which the golden metal rose 11.59% and accumulated massive flows of over $8 billion, this time the metal rally has been flow-less, or better said, with outflows. In addition, an environment of lower volatility and rising equity market, as the current one, shifts the views of investors back to equities away from safe havens, which is completely opposite to what we experienced during Q2.
Although some analyst’s fundamental views on the metal support a further increase in the price of gold, the ETP flows pattern suggests that gold may be running out of steam on its ride towards higher levels. On the other hand, we see other precious metals, such as silver, performing an attempt to take on the leading role (or at least part of) within the precious metals space. Silver price has surged 22.9% since the end of Q3 and the metal has accumulated over $1 billion of steady inflows so far.
Cash Flow Review
Total ETP inflows in the US added up to $7.8 bn last week vs $1.9 bn on the previous week, more than three times this year’s average weekly flow of $2.2 bn. Equity, Fixed Income, Commodity ETPs had inflows of $7.0 bn, $546 mm, $314 mm, respectively. While, on the contrary, Currency ETPs recorded $72 mm outflows.
Within Equity ETPs, products focused on the US received the largest inflows ($5.6 bn), followed by Emerging Markets focused ETPs ($1.3 bn). While Long Leveraged ETPs experienced the largest outflows ($200 mm).
The Fixed Income ETPs inflows were led by Corporates ETPs ($319 mm), followed by Sub-Sovereign ETPs ($176 mm). Within Corporate ETPs we saw increased activity in the High Yield sector, while Emerging Markets Debt ETPs were the most active on the Sub-Sovereign side. On the outflows side, Sovereign ETPs recorded the only negative flows figures for the category.
Commodity ETPs’ flows have lost steam as gold investors have sat on the sidewalks. Silver ETPs received the largest inflows ($181 mm), followed by Crude Oil ($102 mm).
New Launch Calendar
There were four new products added to the ETP lineup over the previous week, three of them chose NYSE Arca as the listing venue, while the remaining one was listed on Nasdaq.
Global X Funds launched two ETFs offering access to new niche investment segments, GLDX will attempt to offer exposure to Gold Miners focusing on the exploration phase, therefore the fund will offer access to a mix of gold/venture capital risk and return. The other fund, URA, is an alternative-energy play and offers access to Uranium related companies.
The other two funds were launched by PIMCO and Vanguard, and offer access to the US Broad Treasury and Global ex-US REIT markets, respectively.
Turnover
Avg. Daily Turnover remained flat and totaled $63 bn at the end of the week. Commodity ETPs turnover experienced the largest increase ($227 mm or 6.3%)
Assets Under Management (AUM)
US ETPs AUM rose by 4.2%, reaching a new record high of $968 bn at the end of the week.
To request a copy of the report
Source: Deutsche Bank Global Equity Index & ETF Research
iShares Announces Launch of New iShares Russia Exchange Traded Fund
November 10, 2010--BlackRock, Inc. today announced that the iShares Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, launched the new iShares MSCI Russia Capped Index Fund (ERUS) on the NYSE Arca. The new fund launch completes the suite of iShares BRIC single country funds. In addition, with the launch today, the iShares international single country offering includes nearly 40 ETFs and 19 dedicated to emerging countries.
"The new iShares MSCI Russia Capped Index Fund offers greater precision and access to the 12th largest economy in the world(1)," said Noel Archard, Head of US Product at iShares, BlackRock. "The new iShares fund further enhances our large single country iShares ETF lineup to respond to requests from financial advisors and investors for greater precision in implementing their international-focused investment strategies and interest in getting deeper access to emerging market stocks to help diversify portfolios."
The iShares MSCI Russia Capped Index Fund seeks to track the MSCI Russia 25/50 Index, which is a free-float adjusted market capitalization weighted index designed to measure the performance of equity securities listed on stock exchanges in Russia. The benchmark index is a customized variation of the MSCI Russia Index, designed to cap certain weightings to take into account the investment diversification requirement applicable to U.S. regulated investment companies. The top three sectors in the index as of October 15, 2010, are Energy (50.7%), Materials (18.4%) and Financials (14.5%).
Source: BlackRock
