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Fundamentals: Too Big To Succeed
June 10, 2010--Much ink has been spilled on the perils of allowing some companies to become "too big to fail." This assumes that governments, hence taxpayers, must foot the bill when these whales become seriously ill, while reinforcing a view that the top dogs, whose failure might do systemic damage, should be regulated or constrained to mitigate the damage that they might cause.
The flip side of this view—indeed, perhaps supported by the "too big to fail" ethos—receives scant attention: companies can become "too big to succeed."
When you’re #1, you have a bright target painted on your back. Indeed, in a world of fierce competition and serial witch hunts in Washington, that bull’s-eye is probably painted on your front and sides, too. Competitors are gunning for you. Governments and pundits are gunning for you. In a world that generally roots for the underdog, hardly anyone outside of your own enterprise is cheering for you to rise from worldbeating success to still-loftier success!
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Source: Research Affiliates LLC
Van Eck Reduces Expense Caps for Three Market Vectors Exchange-Traded Funds
June 10, 2010-New York-based asset manager Van Eck Global announced today that, effective June 9, 2010, it is reducing the expense caps on the following ETFs: Market Vectors Brazil Small-Cap ETF, Market Vectors Poland ETF and Market Vectors Vietnam ETF. Van Eck expects that, as a result of this, the net operating expenses of these funds will be reduced.
The reduced expense caps are as follows:
ETF Ticker E Reduced
xpense Cap until Expense Cap*
June 8, 2010
---------------------------------- ------ ---------------- ------------
M BRF 0.71 percent 0.65 percent
arket Vectors Brazil Small-Cap ETF
---------------------------------- ------ ---------------- ------------
M PLND 0.76 percent 0.65 percent
arket Vectors Poland ETF
---------------------------------- ------ ---------------- ------------
M VNM 0.97 percent 0.76 percent
arket Vectors Vietnam ETF
---------------------------------- ------ ---------------- ------------
* The Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of each Fund (excluding interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding (with respect to Market Vectors Brazil Small-Cap ETF and Market Vectors Poland ETF, 0.65%) and (with respect to Market Vectors Vietnam ETF, 0.76%) of its average daily net assets per year until at least May 1, 2011. During such time, the expense limitation is expected to continue until the Fund's Board of Trustees acts to discontinue all or a portion of such expense limitation.
These reduced expense limitations are capped contractually until at least May 1, 2011. As is typically the case, interest expense and certain other expenses are excluded from the expense cap.
"International funds generally have higher net expense ratios than domestic funds but we try to pass on lower expenses to shareholders when we achieve economies of scale," said Jan van Eck, Principal at Van Eck Global. Van Eck had approximately $14.3 billion of assets under management in its 25 Market Vectors ETFs as of May 31, 2010.
The Market Vectors Brazil Small-Cap ETF (BRF) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Brazil Small-Cap Index. The Index provides exposure to publicly traded small capitalization companies that are domiciled and primarily listed on an exchange in Brazil or that generate at least 50 percent of their revenues in Brazil. As of May 31, 2001, BRF had approximately $614m in investor assets under management.
The Market Vectors Poland ETF (PLND) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Poland Index. The Market Vectors Poland Index is a diversified index consisting of at least 25 companies either headquartered in Poland or deriving at least 50 percent of their revenues from the country. As of May 31, 2001, PLND had approximately $27m in investor assets under management.
The Market Vectors Vietnam ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Vietnam Index. The Index provides exposure to publicly traded companies that, predominantly, are domiciled and primarily listed in Vietnam and which generate at least 50 percent of their revenues from Vietnam. The Index also includes non-Vietnamese companies that generate, or are expected to generate, at least 50 percent of their revenues from Vietnam, or that demonstrate a significant and/or dominant position in the Vietnamese market and are expected to grow. As of May 31, 2001, VNM had approximately $139m in investor assets under management.
Source: Van Eck
Summary of House-passed Provisions Included in Senate Wall Street Reform Base Text
June 10, 2010--Below is a summary of the House-passed H.R. 4173 provisions that have been included in the Senate Wall Street Reform and Consumer Protection Act base text:
ACCESS ISSUES
Provisions from House bill accepted using House language or with technical changes
Financial Services Oversight Council/ Systemic Risk Determination – makes additions that emphasize consideration of impact of regulatory policies and practices on low-income, minority or underserved communities.
Regulatory considerations by the Federal Insurance Office expanded to include access to affordable insurance products by minorities, low- and moderate-income persons and underserved communities.
Several Consumer Financial Protection Board additions that address challenges faced by minorities and traditionally underserved communities.
Mortgage Reform Bill provisions (see separate listing), including language to extend the sunset provision for the federal law protecting tenants in foreclosed properties from December 2012to December 2014.
Provisions from House Bill Modified.
Offices of Minorities and Women Inclusion. Base text adopts House provisions with certain changes, particularly regarding Presidentially appointed and Senate confirmed directors, assessments of diversity efforts as part of an examination process of regulated entities, written assurances from contractors concerning diversity efforts, and termination of contracts. Offices provision moved from Title I of the bill to Title III, and no longer applies to the Federal Insurance Office.
Specify that membership of the Consumer Advisory Board includes experts in civil rights, representatives of depository institutions that primarily serve underserved communities that have been significantly impacted by higher priced mortgage loans. Base text only specifies representatives of depository institutions that primarily serve underserved communities that have been significantly impacted by higher priced mortgage loans.
Regulator mitigatory action required before systemic dissolution to avoid potential adverse effects that the default of the financial company would have on low-income, minority or underserved communities. Base text does not require mitgatory action but allows the above considerations as part of the FDIC’s Orderly Liquidation Plan.
view H.R. 4173, Wall Street Reform and Consumer Protection Act of 2009 (Engrossed as Passed by House) BNY Mellon Launches Auction Marketplace for Fixed Income Securities In addition to creating an auction market for fixed income securities, Structured Credit Connection can
also be used by clients to conduct high-level portfolio analysis and/or monitor overall market activity.
Trading and execution services are provided through BNY Mellon Capital Markets, LLC, an SECregistered
broker-dealer*.
As the world’s leading provider of securities services, BNY Mellon is uniquely positioned to provide the
full range of capabilities embedded in the Structured Credit Connection platform, including trading and
execution, clearing and settlement, custody, analytics and reporting. Additional information about
Structured Credit Connection is available at scc.bnymellon.com.
<>BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE:BK). BNY
Mellon is a global financial services company focused on helping clients manage and service their
financial assets, operating in 34 countries and serving more than 100 markets. BNY Mellon is a leading
provider of financial services for institutions, corporations and high-net-worth individuals, providing
superior asset management and wealth management, asset servicing, issuer services, clearing services
and treasury services through a worldwide client-focused team. It has $22.4 trillion in assets under
custody and administration, $1.1 trillion in assets under management, services $11.8 trillion in
outstanding debt and processes global payments averaging $1.5 trillion per day. Additional information
is available at www.bnymellon.com. BM&FBOVESPA Announces The Opening Of The Bidding Process For The Selection Of A Manager For The New Financial ETF - Interested Financial Entities Must Submit Their Proposals By No Later Than July 19th
Through the opening of the bidding process for the selection of a manager for the new IFNC ETF, BM&FBOVESPA aims to provide the market with new investment alternatives. To this end, the Exchange chose the BM&FBOVESPA Financial Index, which was launched on January 4, 2010, as a reference index for the new ETF. The objective of the IFNC is to track the performance of shares issued by companies that are representative of the financial intermediaries, diversified financial services, and insurance, life and multi-line sectors.
The entity that wins the Bidding Process will be granted an exclusive license for a three (3)-year period for the use of the BM&FBOVESPA Financial Index (IFNC) for the specific purpose of launching the ETF based on the IFNC. Only legal entities that (i) have been authorized by the Securities and Exchange Commission (CVM) to perform professional securities portfolio management activities, pursuant to CVM Instruction 306/99, acting as a fund portfolio manager, and (ii) have or belong to an economic group that has, in Brazil and/or abroad, assets under management (AUM) amounting to at least BRL2,000,000,000.00 will be entitled to participate in the Bidding Process.
Exchange Traded Funds (ETFs), also known as trackers, are investment funds based on market indices, whose shares can be traded on Stock Exchanges, which allow investors to own the stocks that make up the fund’s portfolio without the need to buy the securities of various companies directly. Currently, seven (7) index funds are traded at BM&FBOVESPA: iShares Ibovespa ETF (BOVA11), iShares BM&FBOVESPA Small Cap ETF (SMAL11), iShares BM&FBOVESPA MidLarge Cap ETF (MILA11), iShares IBRX – Index Brazil (IBRX-100) Index Fund (BRAX); iShares Index BM&FBOVESPA Consumption Index Fund (CSMO); iShares Index BM&FBOVESPA Real Estate Index Fund (MOBI), which are managed by BLACKROCK BRASIL, and PIBB ETF - Brazil Tracker (PIBB11), which is managed by Banco Itaú. S&P: 60% of Canadian Active Fund Managers Underperform the S&P/TSX Composite During 1st Quarter
In the first quarter of 2010, actively managed funds in the Canadian Equity category underperformed the S&P/TSX Composite Index when examining both equal- and asset-weighted returns. However, active funds fared better across some of the other fund categories. On both an equal- and asset-weighted basis, active funds outperformed their benchmarks in the categories of U.S. Equity and Canadian Focused Equity. For the Canadian Focused Equity category 58% of active funds outpaced the blended index (comprised of 50% S&P/TSX Composite + 25% S&P 500 + 25% S&P EPAC BMI LargeMidCap).
Over longer periods of time, Standard & Poor's continues to observe indices outperforming the majority of domestic funds. In the three- and five-year periods ending Q1 2010, only 10.9% and 3.3% of actively managed Canadian Equity funds have outperformed the S&P/TSX Composite Index.
Looking at the performance of actively managed foreign equity funds, over the last five years, only 9.8% of active funds in the International Equity category, 11.3% in the Global Equity category and 9.7% in the U.S. Equity category have outpaced the S&P EPAC BMI LargeMidCap, S&P Developed BMI LargeMidCap and S&P 500 indices respectively.
All SPIVA reports can be accessed in their entirety by going to: www.spiva.standardandpoors.com. Corn begins trading June 9, 2010 on NYSE Volcker presses on risky trading read more Proshares files with the SEC view filing Russell files with the SEC
Source: House Financial Services Committee
Structured Credit ConnectionSM Unites Buyers and Sellers Anonymously, Improving Transparency,
Liquidity and Price Discovery
June 10, 2010-BNY Mellon, the global leader in asset management and securities
servicing, has introduced Structured Credit ConnectionSM, an innovative real-time auction marketplace
where buyers and sellers of fixed income securities can anonymously transact with one another.
Structured Credit Connection provides participants with access to extensive collateral and loan level
data, as well as a variety of integrated analytical systems designed to improve confidence in the
marketplace for all types of structured credit securities, including those with less liquidity.
“Currently, there is no single market for buyers and sellers that provides reliable and transparent
information and loan level data for fixed income securities,” said Karen Peetz , CEO of Financial
Markets & Treasury Services at BNY Mellon. “Structured Credit Connection unites participants
anonymously in a single marketplace and provides them with access to data and tools they can use to
evaluate their securities. This will greatly enhance the clarity around the securities being traded and
participants’ confidence in the overall auction process.”
Source: BNY Mellon
June 9, 2010--BM&FBOVESPA hereby announces the opening of the Bidding Process for the selection of a securities portfolio manager that will obtain an exclusive license for the use of the BM&FBOVESPA Financial Index (IFNC) for the launching of an Exchange Traded Fund (IFNC ETF), whose shares will be traded on the BOVESPA market segment.
All entities interested in participating in the Bidding Process must submit their documentation to BM&FBOVESPA by no later than July 19, 2010. The winning bidder will be the entity that provides the highest value commitment. The results of the Bidding Process will be disclosed in a public session to be held at 10:00 a.m. on August 2, 2010, at the main offices of BM&FBOVESPA.
Source: BM&FBOVESPA
June 9, 2010--Standard & Poor's, the world's leading index provider, announced today that the latest results of its Standard & Poor's Index Versus Active Fund Scorecard for Canada ("SPIVA") show that only 40% of active mutual funds in the Canadian Equity category were able to outperform the S&P/TSX Composite Index during the first quarter of 2010. Similar results were seen in the Canadian Small/Mid Cap Equity category of mutual funds when compared against the performance of the S&P/TSX Completion Index.
SPIVA Canada reports on the performance of actively managed Canadian mutual funds versus their relative Standard & Poor's benchmark. A key advantage of the SPIVA report is its correction for survivorship bias, which can skew results as funds merge or liquidate.
Source: Standard & Poors
June 9, 2010--The Teucrium Corn Fund ETF has begun trading today. The ticker symbol is CORN.
The investment objective of the Fund is to have the daily changes in percentage terms of the Shares’ NAV reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for corn (“Corn Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”), specifically (1) the second-to-expire CBOT Corn Futures Contract, weighted 35%, (2) the third-to-expire CBOT Corn Futures Contract, weighted 30%, and (3) the CBOT Corn Futures Contract expiring in the December following the expiration month of the third-to-expire contract, weighted 35%, less the Fund’s expenses. (This weighted average of the three referenced Corn Futures Contracts is referred to herein as the “Benchmark,” and the three Corn Futures Contracts that at any given time make up the Benchmark are referred to herein as the “Benchmark Component Futures Contracts.”)
Source: Online News
June 9, 2010--Paul Volcker, former Federal Reserve chief, pushed Democrats in Congress on Tuesday to adopt a firm ban on proprietary trading as they prepared for a public “conference” to finalise financial regulatory reform.
Amid congressional negotiations on the final legislation, Mr Volcker is reported to have called for a tough “Volcker rule” to bar banks from risky activity.
Key lawmakers in the House have embraced a tough version of the Volcker rule proposed by Carl Levin and Jeff Merkley, Democratic senators, which removes leeway for regulators and the Treasury to modify a strict ban. It also introduces a separate “conflict of interest” provision to prevent banks from taking a different market position to their customers
Source: FT.com
June 9, 2010-ProShares has filed a post-effective amendment, registration statement with the SEC for
ProShares Ultra TIPs; ProShares Short TIPs; ProShares UltraShort TIPs; ProShares Ultra Gold Miners; ProShares Short Gold Miners; ProShares UltraShort Gold Miners;
ProShares Ultra MSCI Canada; ProShares Short MSCI Canada; ProShares UltraShort MSCI Canada; ProShares Ultra S&P Retail; ProShares Short S&P Retail; ProShares UltraShort S&P Retail; ProShares UltraPro 3-7 Year Treasury; ProShares UltraPro Short 3-7 Year Treasury; ProShares Ultra 3-7 Year Treasury; ProShares Short 3-7 Year Treasury; and ProShares UltraShort 3-7 Year Treasury.
Source: SEC.gov
June 9, 2010--Russell has filed an application for exemptive relief with the SEC,
view filing
Source: SEC.gov