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Direxion Shares Launches Six New Leveraged ETFs
March 11, 2010--Direxion, a pioneer in providing alternative and tactically-oriented investment strategies to sophisticated investors, is pleased to announce the launch of six new Direxion Shares Daily ETFs to its existing lineup of multi-directional, leveraged funds. This brings the total number of leveraged ETFs offered by Direxion to thirty-four.
The new ETFs are leveraged Bull and Bear funds that seek 200% of the daily performance, or 200% of the inverse of the daily performance (before fees and expenses), of the BNY Mellon BRIC Select ADR Index and the Indus India Index. In addition, the new ETFs include leveraged Bull and Bear funds that seek 300% of the daily performance, or 300% of the inverse of the daily performance (before fees and expenses), of the PHLX Semiconductor Sector Index. The new BRIC (Brazil, Russia, India, China) and India funds are the first 2x daily leveraged ETFs that Direxion has launched.
These new funds, and all Direxion Shares ETFs, are intended for use only by sophisticated investors who understand the risks associated with seeking daily leveraged investment results and plan to actively monitor and manager their positions in the funds. There is no guarantee that the funds will achieve their objective.
"Direxion strives to provide innovative investment solutions that enable investors to employ tactical portfolio strategies amid changing market conditions," stated Dan O'Neill, Direxion Shares' President. "We have provided the investment community with many industry 'firsts.' With this launch, we are pleased to offer the first 2x leveraged BRIC and India ETFs. The BRIC economies represent some of the fastest-growing in the world, and we are pleased to provide a vehicle for trading in these markets."
Many sophisticated advisors and institutional investors are using Direxion 3x leveraged ETFs to hedge positions in their current portfolios, while others are using the Funds to seek to take advantage of short-term trading opportunities available in today's markets.
The BNY Mellon BRIC Select ADR Index comprises a select group of American depositary receipts from Brazil, Russia, India and China. The Indus India Index is designed to represent the Indian equity markets as a whole. Its universe of components includes the 200 largest companies listed on the National Stock Exchange and the largest 200 companies listed on the Bombay Stock Exchange. The PHLX Semiconductor Sector Index tracks the performance of U.S. semiconductor makers and equipment manufacturers.
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Source: PR Newswire
Remarks of Chairman Gary Gensler, OTC Derivatives Reform, FIA’s Annual International Futures Industry Conference, Boca Raton, Florida
March 11, 2010--Good morning. I would like to thank the Futures Industry Association for inviting me to speak here this morning. I also want to thank the international regulators who flew in from around the globe to join our meeting yesterday to discuss and coordinate our financial reform efforts.
The First Derivatives Markets
Another important event in Chicago, just six years before Mrs. O’Leary’s cow kicked over that infamous lantern, was the starting of derivatives trading. Of course everybody in this room knows these derivatives as futures, which started trading when farmers and grain merchants came together to hedge their price risk in corn, wheat and other grains. It took nearly 60 years before Congress brought regulation to this earlier derivatives marketplace to lower risk and promote transparency and market integrity.
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I would like to use this opportunity to discuss much-needed regulatory reform of the over-the-counter derivatives marketplace as well as to update you on some of the changes we hope to make at the CFTC. I am going to discuss these issues in the context of two significant events in American history, both of which occurred in mid-19th Century Chicago.
Mrs. O’Leary’s Cow
As most of us learned as school children, in 1871, what started as a small fire quickly spread through Chicago to destroy much of the city. The story goes that it was ignited when Mrs. Catherine O’Leary’s cow kicked over a lantern in her barn. Many of the buildings in Chicago were made of wood, so the fire spread too quickly for firefighters to extinguish it. As a result of the fire, Chicago implemented new building and fire codes to prevent a repeat of the disaster. While Chicago didn’t burn down solely because of weak building codes, those new rules went on to protect the residents of Chicago from the spread of future fires.
Source: CFTC.gov
New ETF to Hold Closed-End Shares
March 9, 2010--Invesco PowerShares launched the first ETF whose portfolio consists of closed-end funds last month. The PowerShares CEF Income Composite Portfolio (PCEF) tracks the S-Network Composite Closed-End Fund Index.
Like mutual funds and ETFs, closed-end funds are diversified portfolios, but they differ in the way they sell and price their shares.
Mutual funds and ETFs are open-end funds because they can sell as many shares needed to satisfy investor demand. In addition, they’re priced each night at their net asset value, or NAV. However, a closed-end fund sells a limited number of shares on the stock exchange in an initial public offering. Because closed-end fund shares trade on the stock exchange, demand for the shares determines price not the NAV. Thus, most closed-end funds sell at a discount or premium to the fund’s NAV.
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Source: Lawrence Carrel, Author
Fund.com Says It is Executing on Its Business Plan Through Its AdvisorShares Subsidiary to Bring Actively Managed ETFs to the Market
March 10, 2010-- Fund.com, Inc. said today that its majority-owned subsidiary, AdvisorShares Investments, LLC, a developer and distributor of actively managed ETFs, is currently on track to have three actively managed ETFs trading on the New York Stock Exchange in April. There are currently 17 actively traded ETFs.
Fund.com CEO Gregory Webster said that AdvisorShares is one of the few firms that has approval from the Securities and Exchange Commission (technically known as exemptive relief from the provisions of the Exchange Act of 1940) to form new actively managed ETFs. Webster noted that a major advantage that AdvisorShares has is its ability to bring to market active manager strategies through an AdvisorShares ETF. An indication of the growing popularity of actively traded ETFs, Webster noted, is that Legg Mason and Eaton Vance recently joined T. Rowe Price and Goldman Sachs in asking for exemptive relief to create actively traded ETFs.
Webster said, "AdvisorShares earns its revenues from sharing in the investment advisors' management fees by providing services to register, list and market actively managed ETFs."
As an originator and distributor of new actively managed ETFs, Fund.com's AdvisorShares has previously announced relationships to develop actively managed ETFs on its patent-pending ETF development platform with WCM Investment Management, Laguna, CA, in conjunction with BNY Mellon, NYC, Peritus Asset Management, Santa Barbara, CA.; and Mars Hill Partners, LLC, Colorado Springs, CO.
Source: Fund.com Inc.
DB Index Research -- Weekly ETF Market Review - US
March 10, 2010--Highlights
New Listings and Delistings
There were no new listings in the last week.
Net Cashflows
This week $3.30 bn flowed into ETPs. Equity, Fixed Income and Commodity ETPs had inflows of $1.86 bn, $848 mm and $610 mm respectively, while Currency ETPs had outflows of $144 mm.
In the equity asset class, US sector ETPs had the highest inflows of $1.1 bn followed by Mid Cap ETPs, while Emerging Markets regional ETPs experienced the largest outflows of $439 mm, followed by Leveraged ETPs. Style ETPs (Growth, Value, and Dividend) continued to attract signficant cash flows
In the Fixed Income ETPs landscape, Corporates ETPs contributed the most to the positive cash flows, while Sovereign had the largest outflows
Within Commodity ETPs, those tracking Silver saw the largest outflows. Meanwhile, Gold ETPs and broad commodity benchmark ETPs experienced the largest inflows
Turnover
ETP turnover decreased by 7.7% during last week and totaled $68 bn.
Equity ETP turnover experienced the largest decrease. Turnover decreased significantly for Large Cap and Strategy (Short, Leveraged and Leveraged Short) ETPs
Fixed Income ETPs turnover slightly decreased in the past week.
Commodity ETP turnover decrease was mainly driven by Natural Gas, Oil and Gold
Assets Under Management (AUM)
US ETPs AUM rose by 3.3% totaling $791 bn at the end of last week. Equity ETPs had the lion’s share with $590 bn and 75% of market share, followed by Fixed Income funds with $119 bn and 15% of market share
To request a copy of the report
Source: Aram Flores and Shan Lan -DB Index Research
Proshares files with the SEC
March 10, 2010--Proshares has filed a post-effective amendment, registration statement for
ProShares Trust:
ProShares Ultra Nasdaq Biotechnology;
ProShares Short Basic Materials;
ProShares Short Real Estate;
ProShares UltraShort Nasdaq Biotechnology
ProShares Short FTSE/Xinhua China 25.
view filing
Source: SEC.gov
State Street files with the SEC
March 10, 2010--State Street has filed a amended registration statement for
SPDR S&P Russia ETF
view filing
Source: SEC.gov
US ETF Snapshot: February 2010-State Street Global Advisors
March 10, 2010--As of February 28, 856 ETFs in the US—with assets totaling approximately $752BN—were managed by 31 ETF managers.
ETF industry assets rose $21.5BN for the month, or 2.9%.
Asset Classes — Overall
The S&P 500® Index rose 3.1% in February. MSCI EAFE® Index fell 0.7% for the month in USD terms. Both the Barclays Capital U.S. Treasury Index and the Barclays Capital U.S. Aggregate Index rose 0.4%. Gold rose to $1,108.25 an ounce, a gain of 2.8% from last month’s close.
All 13 categories gained in absolute terms, with the Size category accounting for 43% of the $22BN gain.
Size/Style
Large Cap had by far the largest gain in assets, climbing $6.7BN, followed by Small Cap, up $1.7BN.
Sector
Gains were spread evenly among nine of the ten Sectors for a cumulative gain of $3.4BN.
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Source: State Street Global Advisors
Treasury, Energy Announce Guidance for Tax Treatment of Smart Grid Investment Grants
March 10, 2010--The Department of Treasury and the Department of Energy announced today new guidance on the tax treatment for grantees receiving Recovery Act funding under the $3.4 billion Smart Grid Investment Grant program. Under the guidance released today, the Internal Revenue Service is providing a safe harbor under section 118(a) of the Internal Revenue Code for corporations receiving funding under the program.
With the determination that Smart Grid Investment Grants to corporations are non-taxable, corporate utilities will be able to launch their investments with a clear indication of the tax status for their projects. This decision will allow the Department of Energy to move forward quickly to finalize grant agreements over the coming weeks.
"Smart Grid Investment Grants help encourage innovation in the way we power our homes and businesses," said Treasury Assistant Secretary for Management Dan Tangherlini. "By clarifying the tax treatment of Smart Grid Investment Grants, we are ensuring that their full impact is felt in the communities where these investments are being made.
view full guidance
Source:U.S. Department of the Treasury.
High-Frequency Pause: PDQ Changes Paradigm
March 10, 2010--After operating fornearly a year, the PDQ alternative trading system is betting it can attract more liquidity from high-frequency trading firms by requiring those frenetic market participants to pause.
Pause?
That's right: Pause executions for up to 20 milliseconds so liquidity-providing algorithms can compete for orders.
Twenty thousandths of a second on hiatus may seem like a lifetime for traders who compete in millionths and even billionths of a second to beat competitors to quotes. But even such a short pause can determine which side of the fence market participants position themselves.
"By changing the paradigm slightly with a pause, we get high-frequency algorithms to declare what the market is for a stock," said Keith Ross, CEO of PDQ since 2005.
Although a novel concept in the electronic trading world, that pause was long present when specialists provided liquidity on the floors of the New York Stock Exchange and other exchanges.
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Source: Securities Indistry News