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BMO Financial Group Expands ETF Line-Up To 30 With Addition Of Eight New Funds
New ETF offerings feature the first Emerging Markets bond ETF to enter Canada, as well as access to US health care, US banks and small-cap oil and gas.
May 26, 2010-- BMO Financial Group (BMO, the leading major Canadian financial group in the area of Exchange-Traded Funds (ETFs)(i), today announced another significant expansion into the ETF market with the launch of eight new funds, bringing its product line to a total of 30 ETFs.
The expansion once again reiterates BMO's commitment to being a leader in the growing Canadian ETF market and offering a full range of investment options to investors.
The following new BMO ETFs begin trading on the Toronto Stock Exchange today:
-- BMO Equal Weight REITs Index ETF (ZRE)
-- BMO Equal Weight US Banks Hedged to CAD Index ETF (ZUB)
-- BMO Equal Weight US Health Care Hedged to CAD Index ETF (ZUH)
-- BMO Junior Oil Index ETF (ZJO)
-- BMO Junior Gas Index ETF (ZJN)
-- BMO Long Federal Bond Index ETF (ZFL)
-- BMO Real Return Bond Index ETF (ZRR)
-- BMO Emerging Markets Bond Hedged to CAD Index ETF (ZEF)
The new ETFs complement BMO's current line-up and include three fixed income funds, one of which provides exposure to emerging market bonds. Also highlighted is exposure to oil and gas in the small cap sector, as well as equal weight access to US health care and US banks.
"We are very excited about the most recent expansion in our ETF offering which reflects our ongoing commitment to providing Canadian investors greater access to global markets," said Rajiv Silgardo, CEO of BMO Asset Management Inc. "These latest additions further diversify our offering in a number of areas, including the health care and oil and gas sectors, allowing Canadian investors the opportunity to capitalize on the ongoing growth in key industries."
The new roll-out includes three currency-hedged ETFs, which provide investors in Canada access to growth in other countries while mitigating the risk of losses based on foreign exchange volatility. As the Canadian dollar gained against other currencies over the past year, currency volatility has increased significantly and may remain elevated in the coming years. BMO Equal Weight US Banks Hedged to CAD Index ETF (ZUB), BMO Equal Weight US Health Care Hedged to CAD Index ETF (ZUH) and BMO Emerging Markets Bond Hedged to CAD Index ETF (ZEF) are designed to address this issue by helping investors hedge their currency exposure.
"For those in need of cost-efficient hedging solutions, we have added to our currency-hedged ETFs to allow investors to access the growth and diversity of non-Canadian markets without the added volatility often attributed to currency," said Mr. Silgardo.
More information about BMO ETFs can be found at www.bmo.com/etfs.
Source: BMO
US ETF assets up 56.9 pct in year ended April-ICI
May 26, 2010-- Assets traded in the U.S.
exchange traded funds (ETFs) universe grew 56.9 percent in the
year ended April 30 to $830.8 billion, monthly data issued by
the Investment Company Institute showed on Wednesday.
ICI, the mutual fund industry's trade group, reported an
increase of $25.50 billion in April versus March 2010, marking
a 3.2 percent rise for the month.
Increases were recorded across both equity and debt ETFs. The number of U.S. ETFs rose by 26 in the latest monthly reporting period to 865, versus 726 ETFs traded at the same time last year.
read more
Source: Reuters
U.S. International Reserve Position
May 26, 2010--The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $124,972 million as of the end of that week, compared to $123,898 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)
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May 21, 2010 |
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A. Official reserve assets (in US millions unless otherwise specified) 1 |
124,972 |
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(1) Foreign currency reserves (in convertible foreign currencies) |
Euro |
Yen |
Total |
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(a) Securities |
8,967 |
14,404 |
23,371 |
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of which: issuer headquartered in reporting country but located abroad |
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0 |
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(b) total currency and deposits with: |
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(i) other national central banks, BIS and IMF |
13,116 |
7,062 |
20,178 |
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ii) banks headquartered in the reporting country |
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0 |
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of which: located abroad |
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0 |
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(iii) banks headquartered outside the reporting country |
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0 |
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of which: located in the reporting country |
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0 |
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(2) IMF reserve position 2 |
11,195 |
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(3) SDRs 2 |
54,551 |
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(4) gold (including gold deposits and, if appropriate, gold swapped) 3 |
11,041 |
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--volume in millions of fine troy ounces |
261.499 |
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(5) other reserve assets (specify) |
4,636 |
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--financial derivatives |
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--loans to nonbank nonresidents |
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--other (foreign currency assets invested through reverse repurchase agreements) |
4,636 |
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B. Other foreign currency assets (specify) |
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--securities not included in official reserve assets |
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--deposits not included in official reserve assets |
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--loans not included in official reserve assets |
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--financial derivatives not included in official reserve assets |
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--gold not included in official reserve assets |
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--other |
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read more
Source: U.S. Department of the Treasury
SEC Proposes Consolidated Audit Trail System to Better Track Market Trades
May 26, 2010--The Securities and Exchange Commission today proposed a new rule that would require the self-regulatory organizations (SROs) to establish a consolidated audit trail system that would enable regulators to track information related to trading orders received and executed across the securities markets.
A consolidated audit trail system would help regulators keep pace with new technology and trading patterns in the markets. Currently, there is no single database of comprehensive and readily accessible data regarding orders and executions. Stock market regulators tracking suspicious market activity or reconstructing an unusual event must obtain and merge an immense volume of disparate data from a number of different markets and market participants. Regulators are seeking more efficient access to data through a far more robust and effective cross-market order and execution tracking system.
"If adopted, this consolidated audit trail would, for the first time ever, allow the SEC and other market regulators to track trade data across multiple markets, products and participants in real time," said SEC Chairman Mary L. Schapiro. "It would allow us to rapidly reconstruct trading activity and quickly analyze both suspicious trading behavior and unusual market events."
Last year, the SEC set up an agency-wide task force to carry out the audit trail initiative and begin the process of developing the rulemaking proposal recommended to the Commission today.
view the Proposal on Consolidated Audit Trail
Source: SEC.gov
SEC Approves Rule Changes to Enhance Municipal Securities Disclosure
May 26, 2010-The Securities and Exchange Commission today voted unanimously to approve rule changes improving the quality and timeliness of municipal securities disclosure.
Municipal securities, such as municipal bonds, are exempt from the disclosure requirements of the federal securities laws. As such, the SEC’s statutory authority is limited. The SEC’s rule amendments approved today are designed to provide enhanced information to municipal securities investors by further regulating those who underwrite or sell such municipal securities.
The measures will strengthen existing requirements for the scope of securities covered, the nature of the events that issuers must disclose, and the time period in which disclosure must be made.
“These rule changes will enable investors to make more knowledgeable decisions about municipal securities by requiring more timely and relevant information on an ongoing basis,” said SEC Chairman Mary L. Schapiro. “Although I believe that the SEC’s regulatory authority over the municipal securities market should be expanded in order to better protect investors and issuers alike, these measures represent an important improvement within our present statutory authority.”
The compliance date of the new rules is Dec. 1, 2010.
view fact sheet
Source: SEC.gov
Exchange-Traded Funds Quarterly Report: Over $780 Billion in 911 ETFs
May 25, 2010--over $780 billion. While net cash inflows were a
relatively modest $8 Billion in the first quarter, new
issuance remains strong. On a year-to-date basis, fixed
income continues to generate the strongest flows,
particularly among ETFs focused on the shorter-end of
the curve.
This is our comprehensive quarterly report on
US-listed ETFs. It includes a summary of investment
applications, excerpts from our strategy reports, our
outlook for related markets, index data, and individual
profiles for the 287 ETFs in our coverage universe,
which represent over 95% of US ETF assets
Index-linked ETFs may serve as attractive investment alternatives. In our view, ETFs are compelling investments for exposure to many asset classes due to their broad diversification, low expense ratios, high tax efficiency, competitive long-term performance versus active managers, and trading flexibility. Index-linked ETFs are passively managed portfolios designed to provide exposure to specific indices, baskets of stocks, currencies or commodities. Some ETFs offer relatively low-risk, broadly diversified portfolios, which investors may find attractive as core holdings. Others offer less diversified investments in particular styles, sectors, industries, regions, countries, or commodities.
There are over 450 ETFs that provide exposure to US equity markets. The largest ETF managers include BlackRock (iShares), State Street Global Advisors (SPDRs), Vanguard, PowerShares, ProShares, Van Eck Associates, WisdomTree and Rydex. Several ETFs offer exposure to duplicate or similar indices; however, there are generally structural differences. We believe investors should favor ETFs that best meet their investment objectives with the lowest operating expenses and reasonable liquidity.
request report
Source: Morgan Stanley
Vanguard Study Finds Investors Favoring Low-Cost Mutual Funds and ETFs
May 25, 2010--A new Vanguard study on mutual fund and exchange-traded fund (ETF) purchasing activity revealed that lower-cost products have attracted the predominant portion of investor dollars over the past decade.
In “Costs Matter: Are Fund Investors Voting With Their Feet?,” Vanguard found that in each of five categories, investors favored funds with lower expenses, directing between 55% and 93% of cumulative net cash flow to the lowest-expense quartile of funds.
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Low-Expense Funds Garner Lion's Share of Investor Dollars Cumulative Net Cash Flow 10-year period ended December 31, 2009 |
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| Fund Category |
Percentage of Cumulative Cash Flow
Invested in Lowest-Expense Quartile |
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| Equity* | 86% | |||||||
| Active equity | 55% | |||||||
| Index equity | 93% | |||||||
| ETF equity | 59% | |||||||
| Bond* | 78% | |||||||
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*includes ETFs
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Sources: Morningstar data, Vanguard calculations
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“It is clear from our analysis that investors are increasingly gravitating toward low-cost funds and ETFs,” said Francis Kinniry, Jr., Principal, Vanguard Investment Strategy Group. “The trend to low-expense funds is very encouraging. Low investment costs, along with time and savings rate, should be the focal points for investors as they seek to accumulate sufficient wealth for retirement. Costs are also important to the retired investor, as high costs can substantially reduce one’s income stream and principal balance over time.”
Mr. Kinniry noted that the growing popularity and availability of index funds and index-based ETFs likely fueled the flight to low-cost products. He also noted that a similar shift took place among actively managed funds, as lower-cost active equity funds attracted more assets relative to their higher-cost counterparts.
The paper also discussed several other reasons for the movement toward lower-cost funds, including:
•The large role that financial advisors and corporate retirement plan sponsors play in the fund distribution process. Some 80% of fund assets are held through these intermediaries, which are increasingly offering low-cost products to their clients and participants, respectively (Source: Investment Company Institute, 2009). In the advisor market, a move from a transaction-oriented, commissioned-based model to a fee-based model likely abetted the low-cost trend.
•A volatile financial market environment that led to greater recognition by investors that 1) costs matter and 2) costs are a controllable factor in the investing equation. By contrast, the historically generous stock and bond returns of the 1980s and 1990s resulted in investors focusing on high absolute returns and paying little attention to costs.
•Increased investor understanding of cost, which was aided substantially by improved disclosure, the greater availability of cost information online, heightened scrutiny of costs by the financial media, and the emergence of costs as a selling point in fund marketing efforts.
read Costs matter: Are fund investors voting with their feet?
Source: Vanguard
PowerShares files with the SEC
May 25, 2010-PowerShares has filed a post-effective, registration statement with the SEC for
PowerShares Fundamental High Yield Corporate Bond Portfolio
(formerly, PowerShares High Yield Corporate Bond Portfolio) (NYSE Arca, Inc. — PHB)
read more
Source: SEC.gov
Emerging Global Advisors Celebrates One-Year Anniversary
Leading Emerging Markets Sector ETF Provider Sees Asset Growth and Trading Volume Driven by Investors Seeking Exposure to Developing Markets
May 25, 2010--Emerging Global Advisors (EG Advisors), the first dedicated emerging markets sector exchange-traded fund provider, is celebrating its one-year anniversary this week. The firm has grown to more than $100 million in assets and currently manages six ETFs, with others scheduled for launch later this year. Established May 22, 2009, EG Advisors provides ETFs tied to stock indices of developing economies around the world.
“There’s been so much change in the emerging market investment landscape in such a short time that an asset class that was once an afterthought is now the foremost consideration in many investment portfolios, institutional and retail alike,” said Robert Holderith, president and CEO of Emerging Global Shares. “We believe market dislocations in the US and other developed countries have led investors to the inescapable conclusion that alpha generation has to come from emerging nations, many of whom are spending hundreds of billions of dollars on their infrastructure build-outs.1 These are the markets in which we invest and we think this puts us on the front lines of what has shaped up to be tremendously exciting investment opportunities.”
In addition to their ETF lineup, EG Advisors also remains committed to providing investors with cutting-edge proprietary research and analysis. The company follows a focused, hands-on research approach, enabling it to gain intelligence into newer, less-researched emerging markets. The research from EG Advisors helps provide investors with an investment rationale for allocating emerging market exposures to their portfolios, and also offers market-by-market analysis on risk, and political and economic perspectives, among others. EG Advisors’ research has also helped lead the company’s product development initiatives to new areas like its recently-launched country-specific infrastructure ETFs.
“EG Advisors’ goal has always been to convert our knowledge and analytical expertise into actionable opportunities for investors,” said Richard Kang, CIO and head of research at EG Advisors. “If there’s one thing investors have learned over the last 18 months it’s that too much exposure to domestic markets may pose a greater risk than previously assumed. We believe emerging markets, such as Brazil, China and India, are witnessing rates of economic growth that investors simply can’t find in the developed world. We expect these economies, along with their peers, to be the locomotive powering the global economy for many years to come.”
EG Shares launched in 2009 with two global sector-specific funds based on the Dow Jones Emerging Markets Sector Titans Indexes. The firm now manages six funds, including the Emerging Global Shares China Infrastructure Fund (CHXX), Emerging Global Shares Brazil Infrastructure Fund (BRXX), Emerging Global Shares Emerging Markets Metals & Mining Fund (EMT), Emerging Global Shares Emerging Markets Energy Fund (EEO), Emerging Global Shares Emerging Markets Financials Fund (EFN) and the Emerging Global Shares Emerging Markets Titans Composite Index Fund (EEG). All are listed on the NYSE Arca exchange.
Source: Emerging Global Advisors (EG Advisors)
Regional Economic Outlook: Western Hemisphere
May 25, 2010-Taking Advantage of Tailwinds
A multispeed global recovery is under way, with some emerging markets in the lead and the major advanced economies growing more slowly. This macroeconomic setting has brought a return to easy global financial conditions and high commodity prices—a situation likely to be sustained for some time but unlikely to be permanent. Against that external backdrop, the recovery in the Latin America and Caribbean region overall is advancing faster than anticipated, but moving at different speeds across countries.
The report discusses the varying policy challenges that different countries face as the global recovery proceeds. Chapter 1 analyzes the global setting and the outlook for the United States and Canada in particular, while Chapter 2 focuses on the outlook for Latin America and the Caribbean. Chapter 3 looks in depth at the challenges arising from the return of easy external financial conditions. Together with high commodity prices, such conditions represent favorable "tailwinds" for many countries of the region, but also carry risks for policymakers to address.
view report
Source: IMF