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IMF Working paper-Is the Growth Momentum in Latin America Sustainable?
May 15, 2013--Summary: A favorable external environment coupled with prudent policies fostered output growth in most of Latin America during the last decade. But, what were the drivers of this strong growth performance from the supply side and will this momentum be sustainable in the years ahead?
We address these questions by identifying the proximate causes of the recent high GDP growth and estimating potential growth rates for the period ahead for a large group of Latin American countries based on standard (Solow-style) growth accounting methodologies. We find that factor accumulation (especially labor), rather than growth in total factor productivity (TFP), remains the main driver of GDP growth. Moving forward, given the expected moderation of capital accumulation and some natural constraints on labor, the strong growth momentum is unlikely to be sustainable unless TFP performance improves significantly.
view the IMF Working paper-Is the Growth Momentum in Latin America Sustainable?
Costs matter: Are fund investors voting with their feet?
May 15, 2013--When investors evaluate a mutual fund, how much do costs matter to them? Mutual fund fees and expenses are a frequently mentioned consideration, but are investors actually walking the talk?
In an updated Vanguard research paper, the authors address this question by examining the relationship between mutual fund expense ratios and net cash inflows. They find the answer to be a resounding yes, not just among index funds and index-based ETFs, but among actively managed funds as well.
view the whitepaper-Costs matter: Are fund investors voting with their feet?
IndexIQ Tops $1 Billion in Assets as Leader in Liquid Alternative Exchange-Traded Funds
Award-winning company was first to market with broad range of innovative liquid alternative investment products, including ETFs, mutual funds, managed accounts and ETF model portfolios
May 15, 2013--IndexIQ, whose innovative liquid alternative investment products helped launch an entirely new asset class, has surpassed the $1 billion threshold, it was announced today.
“In a few short years, liquid alternatives have gone from a novelty to playing an important role in a diversified investment portfolio and we’ve seen strong interest in our offerings from the institutional and retail advisor channels,” said Adam Patti, IndexIQ’s chief executive officer. “We’re very proud of our focus on the liquid alternatives space from the beginning, and our growth reflects our investors’ views regarding the quality of our products, the strength of our funds’ track record, and the increased acceptance of these products as an important asset class.”
Treasury International Capital Data for March
May 15, 2013--The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for March 2013. The next release, which will report on data for April 2013, is scheduled for June 14, 2013.
The sum total in March of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $2.1 billion. Of this, net foreign private inflows were negative $34.8 billion, and net foreign official inflows were $36.9 billion.
Foreign residents increased their holdings of long-term U.S. securities in March – net purchases were $15.3 billion. Net purchases by private foreign investors were $9.7 billion, and net purchases by foreign official institutions were $5.6 billion.
At the same time, U.S. residents increased their holdings of long-term foreign securities, with net purchases of $28.8 billion.
Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were negative $13.5 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, the overall net foreign acquisition of long-term securities is estimated to have been negative $31.9 billion in March.
Foreign residents increased their holdings of U.S. Treasury bills by $34.2 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $35.6 billion.
Nasdaq halts trading in some options contracts due system issues
May 15, 2013-- Nasdaq OMX Group Inc on Thursday halted trading in some options contracts on one of its options exchanges on Thursday due to system issues.
The system issues, which started at 9:48 a.m. ET (1348 GMT) on the Nasdaq PHLX options exchange, affected options on equity underlying symbols beginning with the letter Z - approximately 21 options, including Zynga Inc , the exchange said.
VelocityShares Announces Licensing of Innovative Hedged Equity Indices
May 15, 2013--VelocityShares is pleased to announce the licensing of the VelocityShares Volatility Hedged Large Cap Index and the VelocityShares Tail Risk Hedged Large Cap Index. These indices represent the next frontier in hedged equity investing.
The indices have been licensed to ALPS Advisors, Inc., a leader in the Exchange Traded Funds (ETF) industry. These two indices provide a solution for investors seeking an efficient way to hedge large cap equity exposures without the excessive costs often associated with traditional hedging strategies.
"US equity indices are at or near their all-time high, but investors have not forgotten the pain of the crash in 2008, or the multiple drawdowns of greater than 15% since then," said Nick Cherney, Chief Investment Officer and Co-founder of VelocityShares. "Traditional hedging strategies have failed many investors; these innovative solutions meet the needs of many of the institutional investors we work with."
US regulator sets final rules for swaps trading
May 15, 2013--The top U.S. derivatives regulator unveiled rules for swaps trading that could break open Wall Street's dominance of the $630 trillion market, yet contain important concessions to the industry.
The Commodity Futures Trading Commission (CFTC) is writing a host of new rules based on lessons learned from the 2007-09 financial crisis, which highlighted the opacity of derivatives and triggered a regulatory crackdown.
Guggenheim Investments to Close Chinese Yuan Bond ETF (RMB)
Firm is Dedicated to Its 67 Exchange Traded Products Covering a Broad Range of Strategies Including-Domestic and International Equity, Fixed-Income and Currency
May 14, 2013--Guggenheim Investments, the investment management division of Guggenheim Partners, today announced that it will liquidate the Guggenheim Yuan Bond ETF (RMB) in order to reinforce its commitment to focusing resources on products that have demonstrated the most demand in the marketplace.
The firm currently ranks eighth in AUM among U.S. ETF providers(1)
SSGA-US ETF Snapshot: April 2013
May 14, 2013--1,252 Exchange Traded Funds (ETFs)-with assets totaling $1.5TN-were managed by 37 ETF managers as of April 30, 2013.
Month over month, ETF assets increased $24.1BN, up 1.7%.
Gains of $9.0BN in the Fixed Income category and $8.0BN in the International-Developed category drove a 1.7% rise in assets.
STATE STREET HIGHLIGHTS, APRIL 2013
Income & Total Return: Solutions for a Low Yield Environment
With many asset classes generating historically low yields on an absolute basis, caution must be given toward chasing yield at the expense of total return. In fact, the highest yielding asset classes have tended to be the poorest performers in the subsequent periods. At this stage, with a global economy that is continuing to recover, albeit slower than many would hope, investors should consider a full suite of income-generating assets, but should do so with an eye toward globalizing their portfolios and focusing on more than just current yield.
ETF Industry Detail
Asset Classes-Overall
The S&P 500® Index 1.9%, while the MSCI EAFE® gained 5.2%. Commodities were negative, with the S&P GSCI® down 4.7% and Gold dropping 8.1%. US Bonds were positive, with the Barclays US Treasury Index and the Barclays US Aggregate Index increasing 0.9% and 1.0%, respectively.
FLOWS
ETF flows neared $4.3BN in April. The Fixed Income category had a leading $6.3BN of inflows, increasing its year-to-date total net flows to $13.4BN. The Commodity category had the most significant outflows during the month of April, with $8.1BN leaving the category.
Manager and Fund Detail
BMO Asset Management Inc. Chooses MSCI as the Basis for 2 ETFs ProShares files with the SEC Fidelity gets SEC permission to run actively managed ETFs Vanguard Launches Emerging Markets Government Bond Index Fund TD Ameritrade Launches New ETF Knowledge Center Adviser demand started iShares' active engines
The top three managers in the US ETF marketplace were: BlackRock, State Street and Vanguard. Collectively, they account for approximately 83% of the US listed ETF market.
May 14, 2013--MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, has announced that BMO Asset Management Inc. (BMO AM) has licensed the MSCI Emerging Markets Index and the MSCI EAFE 100% Hedged to CAD Dollars Index for two exchange traded funds (ETFs) for the Canadian market.
The MSCI Emerging Markets Index represents the performance of large and mid cap securities across 21 Emerging Markets countries. The MSCI EAFE 100% Hedged to CAD Dollars Index represents the performance of large and mid cap securities across Developed Markets countries, excluding the US and Canada, and is designed to represent a close approximation of the return from hedging the currency exposures of the constituents of the index in the one month forward market at the end of each month.
April 14, 2013--ProShares has filed a second amended and restated application for exemptive relief with the SEC.
view filing
May 14, 2013--Fidelity Investments said on Tuesday it received permission from U.S. regulators to open its own actively managed exchange-traded funds, as the mutual fund firm seeks to catch up in the faster-growing ETF segment.
Boston-based Fidelity in December filed an application to set up a series of actively managed ETFs with the Securities and Exchange Commission, and the agency approved the request last week, spokesman Jeff Cathie said.
May 14, 2013--Subscription Period Begins Today
Vanguard today announced the introduction of Vanguard Emerging Markets Government Bond Index Fund, the company's first international fixed income offering available to U.S. investors.
The fund is now accepting investments during a subscription period that will extend through the end of business on May 30, 2013. During this period, the fund will invest in money market instruments as it accumulates sufficient assets to construct a representative, diversified portfolio. The fund’s ETF shares (VWOB) are scheduled to begin trading in early June.
Arms investors with knowledge and insights on ways to build a strategy and choose quality ETFs
May 14, 2013--Building a diversified portfolio of exchange-traded funds (ETFs) just got simpler and more efficient, thanks to the launch of a new ETF Knowledge Center from TD Ameritrade, Inc. ("TD Ameritrade"), a broker dealer subsidiary of TD Ameritrade Holding Corporation.
TD Ameritrade's new ETF Knowledge Center arms retail investors with greater education and information on ETFs, as well as insights on key ETF investment strategies as they relate to current market environments.
May 13, 2013--iShares sees its new rules-based active exchange traded funds as attractive substitutes for mutual funds at the core of investment adviser-managed portfolios.
In fact, the iShares Enhanced US Large Cap and iShares Enhanced US Small Cap ETFs were built at the request of a consortium of registered investment advisers queried by BlackRock’s ETF unit, says Sue Thompson, head of the RIA and asset manager group for iShares at BlackRock.
