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New Rydex Equal Weight ETF Begins Trading
Rydex MSCI ACWI Equal Weight (EW) ETF Provides Broad Exposure to the Global Equity Markets; Brings EW Line-Up to 16
January 12, 2011--Rydex MSCI ACWI (All Country World Index) Equal Weight ETF began trading today on the NYSE Arca under the ticker symbol EWAC.
EWAC provides broad exposure to the companies in the MSCI All Country World Equal Weighted Index, which currently consists of 45 country indices representing 24 developed and 21 emerging market countries.
"EWAC is designed for investors who seek to invest broadly across the global equity markets," said Mike Byrum, chief investment officer, quantitative strategies for Rydex. "Compared with a traditional cap-weighted index, the equal weight methodology reduces the bias toward the largest constituents and provides broader diversification across all constituents, thereby potentially reducing concentration risk. Through disciplined quarterly rebalancing, EWAC sells those holdings that have appreciated in price and buys those that have not."
iShares Reduces Expense Ratios for 34 Foreign ETFs
January 12, 2011--One of the trends we have been predicting for 2011 is lower expense ratios for exchange-traded funds. On Tuesday, Jan. 11, iShares became the first industry player in 2011 to cut its ETF prices for investors, announcing that it has decreased the expense ratios for 34 of its ETFs, effective Jan. 1.
In the case of all but one of the ETFs, the fee reductions are minimal--between 1 and 5 basis points--and affect only ETFs that invest in foreign-domiciled companies. All 34 ETFs track MSCI indexes.
IShares attributed the price reductions to two dynamics affecting the funds: management-fee breakpoints and foreign taxes.
Russell Investments Buys U.S. One to Establish ETF Business
January 12, 2011--Russell Investments will acquire U.S. One Inc., issuer of the One Fund, in a step to establish its business in the $1 trillion exchange-traded-fund market.
The creator of stock-market indexes bearing its name filed for the acquisition with the U.S. Securities and Exchange Commission today. The One Fund ETF surpassed $10 million in assets under management on Jan. 6. A shareholder vote for approval of the acquisition is scheduled for mid-February.
Russell continues to build the infrastructure for viable and comprehensive ETF offerings,” said Jim Polisson, managing director of Russell’s global ETF business, in a statement today. “By acquiring U.S. One, we can more immediately leverage our proprietary research to extend the options available to investors and include ETFs in our suite of products that we deliver to the marketplace.”
CBOE To Publish CBOE Volatility Index (VIX) Term Structure Data On Cboe.com
January 12, 2010--The Chicago Board Options Exchange (CBOE) today announced that beginning Friday, January 14, the Exchange will launch a web page displaying CBOE Volatility Index (VIX) term structure data, calculated every 15 seconds throughout the trading day.
The term structure of VIX refers to the characteristic differences in the volatility calculated for options of different maturities. The concept of term structure is essential in the pricing and trading of VIX futures and options, offering insight into expectations of market volatility in forward contract months conveyed by S&P 500 (SPX) index options prices.
In addition to point-in-time data, the website will allow users to create historical time series for VIX term structure values and construct their own versions of VIX based on differing times to expiration. Historical data is available throughout the week except between 7:00 a.m. and 7:10 a.m. Central time on weekdays and between 12:00 p.m. and 9:00 p.m. on Saturdays.
Vanguard Attracted $84.8 Billion to Mutual Funds, ETFs in 2010
January 11, 2011--Vanguard Group Inc., the asset manager that pioneered low-cost passive funds for retail investors, gathered more client money last year than any competitor, becoming the world’s largest mutual-fund company and closing ground on its competitors in exchange-traded funds.
Investors poured $58.3 billion into Vanguard’s stock and bond mutual funds and $39.2 billion into ETFs, while pulling $12.7 billion from money-market funds, the Valley Forge, Pennsylvania-based company said today in a statement.
ETF Securities files with the SEC
January 10, 2011--ETF Securities LLC has filed pre-effective Amendment NO. 2 TO Form S-1 Registration statement with the SEC for the ETFS Asian Gold Trust.
read more
iShares files with the SEC
January 11, 2011--iShares has filed a fourth amended and restated application for exemptive relief with the SEC.
view filing
Debate rages over muni bond defaults
January 11, 2011--Warren Buffett has warned of difficulties ahead. So has hedge fund manager Jim Chanos and Meredith Whitney, who foresaw the problems at US banks ahead of the financial crisis.
If they are right, then the $3,000bn US municipal bond market could be on the verge of a crisis to rival that in the eurozone, as cash-strapped states and cities facing big budget and pension deficits struggle to pay their debts.
AdvisorShares Announces Partnership With TrimTabs Asset Management Partnership Will Create a Solution That Utilizes TrimTabs' Liquidity-Based Investing Strategies
January 11, 2011--AdvisorShares Investments, LLC, a sponsor of actively managed Exchange Traded Funds (ETFs), announced today a partnership with TrimTabs Asset Management, LLC : , a subsidiary of TrimTabs Investment Research, Inc. ("TrimTabs"), to develop an actively managed ETF which will apply TrimTabs' liquidity-based investment strategy.
The proposed ETF would join AdvisorShares :' growing stable of innovative actively managed ETFs which includes the AdvisorShares Dent Tactical ETF (NYSE: DENT), the AdvisorShares Mars Hill Global Relative Value ETF (NYSE: GRV), the AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF (NYSE: AADR), the AdvisorShares Cambria Global Tactical ETF (NYSE: GTAA), and the AdvisorShares Peritus High Yield ETF (NYSE: HYLD).
"Many investors are familiar with Charles Biderman from his regular appearances on CNBC and Bloomberg TV as well his frequent quotes in the financial media, and know that he is a go-to resource in the area of stock market liquidity. His firm, TrimTabs, is the leading independent institutional research firm focusing on stock prices as a function of supply and demand rather than value," said Noah Hamman, CEO and Founder of AdvisorShares. "We believe investment advisors will be excited to be able to offer their investors an alternative to market cap or fundamentally weighted core holdings by using TrimTabs' supply and demand investment research, used today by many of the top hedge funds in their investment decisions."
Charles Biderman, Founder and Chief Executive Officer of TrimTabs, said, "Most quantitative ETFs focus on easily available price, volume, and earnings data. Since data on the supply and demand for stocks is scattered across so many sources, most strategies ignore stock market liquidity. However we believe that stock prices are a function of liquidity rather than value. Like the prices of any tradable good, the prices of stocks are driven by supply and demand.
"At TrimTabs, we believe that partnering with AdvisorShares in creating this investment vehicle which will meld our extensive liquidity-based investment research with AdvisorShares' ETF expertise into a liquid, transparent actively managed ETF could be a winning proposition in the investment advisor community."
PowerShares FTSE RAFI US 1000 Portfolio Commemorates Five-Year Anniversary
Fundamental Index®Strategy Outperforms Broad Market-Cap Weighted Indexes over Five-Year Period
January 10, 2011--Invesco PowerShares Capital Management LLC, a leading provider of exchange-traded funds (ETFs) with more than $54 billion in franchise assets, today announced the five-year anniversary of the PowerShares FTSE RAFI US 1000 Portfolio (NYSE Arca: PRF).
The PowerShares FTSE RAFI US 1000 was the first retail investment product to provide investors access to the passive Research Affiliates® Fundamental Index (RAFI®) methodology. This award-winning index methodology uses four fundamental measures of company size: book value, cash flow, sales and dividends, to select and weight index constituents. By using four fundamental factors rather than one, the RAFI methodology is thought to be a more robust means of capturing a company’s true economic footprint.
Since inception, the PowerShares FTSE RAFI US 1000 Portfolio has outperformed its market-capweighted benchmarks, the Russell 1000 and S&P 500 indexes. For the five-year period ending Dec. 31,
2010, PRF achieved a cumulative total return of 23.10% based on NAV, significantly outperforming the
S&P 500 Index which had a total return of 11.99%. The Russell 1000 Index gained 13.81%, and the
Russell 1000 Value Index had a cumulative total return of 6.68% over the same five-year period. (Source:
Bloomberg)
“We are very pleased to celebrate this five-year milestone for the PowerShares FTSE RAFI US 1000 Portfolio, which has delivered on its goal of providing investors improved risk-adjusted returns compared to cap-weighted benchmarks,” said Ben Fulton, Invesco PowerShares managing director of global ETFs. “Invesco PowerShares currently offers six equity ETFs based on the FTSE RAFI Fundamental Index methodology and each one is ranked in the top third of their Lipper categories.* We believe the PowerShares ETFs based on this methodology represent an important alternative to cap-weighted portfolios. We look forward to working with Research Affiliates to continue to expand this important product suite.”
Institutional investors have leading share among ETFs traded on the Exchange in December
January 10, 2011--The participation of institutional investors in the total volume of Exchange-traded funds (ETFs) on the Exchange reached 50% in December. The participation of financial institutions was at 17.8% and of foreign investors 15.7%. Individual investors had a 14.9% market share of total market volume. Public and private sector companies had 1.5%.
ETFs are a simple alternative for the diversification of investment in variable income. In a single transaction the investor can buy a stock portfolio without having to individually manage each of its shares.
Morgan Stanley Exchange-Traded Funds: US ETF Weekly Update
January 10, 2011--Weekly Flows: $8.3 Billion Net Inflows
ETFsTraded $304 Billion Last Week
Launches: 4 New ETFs-Van Eck Renames Nuclear Energy ETF
Grail Advisors May Be Acquired
US-Listed ETFs: Estimated Flows by Market Segment
ETFs got off to a fast start in 2011, posting net inflows of $8.3 blnlast week
Net inflows were led by US and EM Equity ETFs(combined net inflows of $6.7 bln)
ETF assets crossed the trillion dollar mark last week
13-week flows were mostly positive among asset classes
$45.4 bln net inflows into ETFs over past 13 weeks (68% into USEquity ETFs)
We note that Fixed Income ETFs exhibited net outflows of $1.4 blnover the last 13 weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $1.7 blnlast week, the most of any ETF
Only 124 ETFsposted net outflows last week (13% of total ETFs)
Vanguard Emerging Markets ETF (VWO) has generated largest net inflows over past 13 weeks ($5.6 bln)
ETF monthly $ volume has recently declined to 26% of listed trading volume (lowest % since May ’08)
US Large-Cap accounts for 38% weekly ETF volume, but only has 22% of market cap (SPY is 76% of Large-Cap trading volume)
Fixed Income accounts for only 4% weekly ETF volume, but has 14% of market cap
What is Driving Financial De-dollarization in Latin America? IMF Working paper
January 10, 2011-- In the last decade, a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay) experienced a gradual, yet sustained decline in financial dollarization. This paper documents the stylized facts and uses a standard VAR approach to examine the drivers of both deposit and credit de-dollarization. It finds that the exchange rate appreciation has been a key factor explaining deposit de-dollarization.
The introduction of prudential measures to create incentives to internalize the risks of dollarization (including an active management of reserve requirement differentials), the development of a capital market in local currency, and de-dollarization of deposits have all contributed to a decline in credit dollarization. Continuing efforts on these fronts, while maintaining macroeconomic stability and strong fundamentals, would help deepening de-dollarization.
Sale could be lifeline for Grail's ETFs
Identity of acquirer could offer clues on future of active strategy
January 10, 2011--
Grail Advisors LLC is in talks to sell itself, in whole or in part, and expects to make an announcement about the transaction in the next two to four weeks.
Executives of Grail Advisors, a provider of active exchange-traded funds and a unit of merchant bank Grail Partners LLC, have been talking to a “well-known firm in the money management space that is just as excited about the active ETF space as we are,” said CEO William M. Thomas. He declined to name the firm but said it doesn't do business with Grail.
Mutual fund review: Exchange-traded funds surge in popularity
January 10, 2011--A popular financial maxim warns against investing in things you don't understand.
But one of the mutual fund industry's fastest-growing investment options is also poorly understood by investors.
That option — exchange-traded funds — caught fire in 2010. Thanks to a flood of new money from investors, plus rising stock prices, the value of assets in ETFs surged 43% last year, topping $1 trillion for the first time, according to research firm Morningstar Inc.
