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Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
May 13, 2010-Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Thursday, May 13, 2010:
* Medicago Inc. (TSXVN:MDG) will be removed from the index.
* The company will graduate to TSX where it will trade under the same ticker symbol.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poors
ETF Weekly Update-Morgan Stanley
May 11, 2010--Weekly Flows: $2.2 billion net inflows
- Launches: 3 New ETFs
- NYSE Cancels Erroneous ETF Trades
- Vanguard Offers Commission-Free Trades
Despite weak equity markets ETFs had net cash inflows of $2.2 bln last week
- Commodity and US Large-Caps post largest net inflows
Over 13-week period, Fixed Income ETFs grab most new money
$38.4 bln net inflows into ETFs over past 13 weeks; only currency ETFs exhibit net outflows
Second straight week, SPY has the largest net inflows for US ETFs at $2.2 bln
- On a 13-week basis, VWO has the strongest net inflows for all US-listed ETFs at $3.1 bln
- Over 13-week period, only 29% ETFs have posted net outflows
NYSE Cancels Clearly Erroneous ETF Trades
- NYSE Market Management, in conjunction with other UTP Exchanges, cancelled all trades executed
between 14:40:00 and 15:00:00 greater than 60% away from the consolidated last print in that security
at 14:40:00 or immediately prior on 5/6/10.
- According to the NYSE, this decision cannot be appealed.
Vanguard Offers Commission-Free ETF Trades For Its Brokerage Clients
In a 5/4/10 press release, Vanguard announced that its brokerage clients will be entitled to commission-free ETF transactions on Vanguard’s 46 ETFs.
request report
Source: Morgan Stanley
Valuation-Indifferent Weighting for Bonds
May 12, 2010--Research Affiliates is pleased to share with you some of our latest research—"Valuation-Indifferent Weighting for Bonds," a paper co-authored by Rob Arnott, Jason Hsu, Feifei Li, and Shane Shepherd and recently published in the Journal of Portfolio Management.
The paper shows that the Fundamental Index® methodology applied to high-yield corporate bonds outperformed a market-cap-weighted benchmark by 260 bps per year; applied to investment-grade corporate bonds surpassed the relevant Merrill Lynch benchmark by 42 bps per year; and applied to emerging market bonds beat a market-cap-weighted index by 143 bps per year. As with equity portfolios, the amount of outperformance increases in noisier bond markets, generating hefty alphas for high-yield bonds and emerging market sovereign debt using the Fundamental Index methodology. The time period measured was January 1997 through December 2009.
The outperformance of the valuation-indifferent weighting schemes cannot be explained by Fama–French size and value effects or by duration and credit risk, the two primary risk factors in the fixed-income markets. The paper supports the idea that much of the added value comes from noise, or mispricing, in bond prices, suggesting that valuation-indifferent investing can offer new opportunities to fixed-income investors. In short, the Fundamental Index methodology works for bonds too.
Connection Report: Anticipating a Sideways Market? Consider a BuyWrite ETF
May 12, 2010--Invesco PowerShares presents Connection, our monthly ETF report. Each month, the report:
* takes an in-depth look at the ETF industry,
* evaluates the financial markets, and * provides comprehensive analysis.
BuyWrite Strategies
U.S. equity markets have rallied nearly 80% since bottoming out in March 2009. The rally has been fueled by stabilizing economic data and surging corporate profits. Markets have moved upward consistently with the S&P 500 in positive territory nine out of the 11 weeks since Feb. 8, 2010.(1)
Despite the positive performance within the stock markets, however, there still remain significant economic roadblocks including sovereign debt concerns, high unemployment and potential interest rate increases. Additionally, inventory buildup and many of the government stimulus programs are expected to end in the coming months.2
During the rally, trading volume has also remained light. While there is certainly potential for further upside due to high expected corporate profits, there are significant risks of a market pullback as well.
Investors who are uncertain of the outlook for U.S. equities may want to consider an allocation to a BuyWrite strategy to provide some return potential in a sideways market or protection in a down market.
Historical analysis shows that in the second year of a bull market earnings growth levels off and moves into a sustainable trend. Additionally, earnings multiples typically expand rapidly during the first year following a market trough before leveling off as well. Consequently, any subsequent returns will come from earnings increases rather than multiple expansions. As a result of these factors, market performance tends to follow a typical pattern after bear market bottoms. In the first year of a recovery, equities rally significantly followed by more muted returns in the second year.
Ned Davis studied the performance of the S&P 500 in the first and second years of a bull market. In the first year following a trough the S&P 500 had a median gain of 29.2% and was positive in 92% of the cases. Over the one year following the market bottom on March 9, 2009, the S&P 500 returned 68.6%. In the second year following a market bottom, the S&P 500 had a median return of 9% and is up 69% of the time. We are nearing two months into the second year following a bear market bottom and the market has continued up another 4.3% during that time.1 If the market follows its historical pattern in the second year following a bear market we believe one would expect to see flat to slightly positive returns.
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Source: Invesco PowerShares
April 2010 ETF Snapshot Now Available-State Street Global Advisors
May 13, 2010--As of April 30, 888 ETFs in the US—with assets totaling approximately $830BN—were managed by 31 ETF managers.
ETF industry assets rose $23.3BN for the month, or 2.9%.
ETF assets continued to rise in April as all but two asset categories gained; Commodities led, while Dividend had the largest percent increase.
ETF Industry Detail
Asset Classes — Overall
* The S&P 500® Index rose 1.5% in April. The MSCI EAFE® Index fell 1.7% for the month in USD terms. Bonds fell with the Barclays Capital U.S. Treasury Index and the Barclays Capital U.S. Aggregate Index, rising 1.0% and 1.1%, respectively. Gold rose to $1,179.25 an ounce, a gain of 5.7% from last month’s close.
* Gains were evenly distributed across categories with six garnering more than $2BN.
Sector
* Materials and REITs each had over $1.2BN in asset gains for the month. Health Care fell $640MM.
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Source: State Street Global Advisors
State Street Files with SEC
May 12, 2010--State Street has filed a post effective amendment, registration statement with the SEC for
SPDR Nuveen Barclays Capital Build America Bond ETF
read more
Source: SEC,gov
Climate bill would slash US carbon output
May 12, 2010--A draft bill setting out sharp cuts in US greenhouse gas emissions was unveiled in the Senate yesterday, offering new incentives for nuclear power and offshore drilling at a time when the BP spill in the Gulf of Mexico makes support for oil exploration politically difficult.
The draft, however, includes several new protections against spills, including one that allows states to veto drilling plans up to 75 miles from their shores or if they stand to suffer significant adverse impacts in the event of an accident.
The bill, presented by John Kerry, a Democrat, and Joe Lieberman, independent, aims to cut emissions by 17 per cent by 2020 and 83 per cent by 2050.
read more
Source: FT.com
U.S. One, Inc. Launches One Fund(R) Global Stock ETF
May 12, 2010--U.S. One, Inc. launched its inaugural exchange-traded fund, One Fund®, designed specifically for investors seeking a tax efficient, low cost stock ETF. Trading began today ( ONEF). One Fund® is aimed at the individual investor who wants a simple and easy way to own a globally diversified, professionally managed stock portfolio in a single fund.
The Fund's approach simplifies the investment process by consolidating multiple, growth-oriented stock investments into the portfolio of One Fund®. For investors seeking long term growth of their money, they can purchase One Fund® and be done.
One Fund® invests in a broad range of stocks, across many industry segments, in both established and emerging markets. The Fund invests in underlying ETFs based on their ability to accurately represent the desired target market segment with an additional preference for those ETFs with low expense ratios. By investing in One Fund®, investors have the potential to gain exposure to more than 5,000 different companies in the U.S. and around the world.
One Fund® Cost Structure
The management fee for One Fund® is 0.51%, which is roughly 60% lower than the fee an average actively managed stock mutual fund will charge investors and below the 0.57% management fee of the average ETF.(1) ETFs are, however, subject to commission cost.
One Fund® Marketing and Sales Approach
U.S. One, Inc. will be the first ETF issuer to market directly to investors primarily through online channels. The Fund's website, coupled with innovative online marketing strategies, will provide more information, education and opportunity for engagement with investors than those of typical fund companies.
Source: U.S. One, Inc
CFTC to Hold Open Meeting to Consider the Trading of Contracts Based on Motion Picture Box Office Receipts and Gather Views of Interested Parties
May 12, 2010-- The United States Commodity Futures Trading Commission (CFTC) will hold a public meeting on Wednesday, May 19, 2010, to consider issues related to the trading of futures and binary options based on motion picture box office receipts. The Commission will hear presentations by panels of invited witnesses representing Media Derivatives Exchange (MDEX), Cantor Exchange (Cantor), segments of the motion picture industry and other interested parties.
The meeting will be open to the public and will be webcast via the internet. In addition, audio of the meeting will be available via a listen-only conference call.
read more
Source: CFTC.gov
Nasdaq says over 10,000 trades have been cancelled
May 11, 2010--In the wake of the stock market's May 6 chaos, more than 10,000 trades have been cancelled, according to the Nasdaq OMX Group.
Exchanges including Nasdaq and NYSE Euronext's New York Stock Exchange agreed to cancel "clearly erroneous" trades after hundreds of stocks and exchange-traded funds lost as much as 99 percent of their value and then fully recovered in a 20-minute period on Thursday.
Regulators are still struggling to understand what caused the bizarre trading.
The Nasdaq "broke" 10,468 trades totaling 1.4 million shares in 236 different securities, Executive Vice President Eric Noll said on Tuesday in prepared testimony at a hearing of the House Committee on Financial Services in Washington, D.C. Noll did not give a dollar figure for the cancelled trades.
Only trades that occurred between 2:40 p.m. and 3 p.m. EST (1840 GMT and 1900 GMT) at prices at least 60 percent above or below a security's price at 2:40 p.m. were cancelled, prompting howls of protest from some investors.
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Source: Interactive Investor
