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Rusal mulls aluminum ETF; no link to Glencore plans
April 13, 2010--United Co. Rusal is mulling the launch of a physically backed exchange-traded fund (ETF) that could provide future financing for the company, a company spokeswoman confirmed Tuesday.
"Rusal is considering launching an aluminum exchange-traded fund. . . . We are investigating the demand for the ETF. The ETF could be a future financing channel for Rusal," the spokeswoman said in an e-mail.
The fund would initially be backed with "1 million tonnes or more" of the company's aluminum, she said, adding that plans for the ETF could be finalized in the second half of this year.
IndexIQ to Start ETFs for Korea, Taiwan, Tracking Small Caps
April 13, 2010--IndexIQ is adding single-country, small-cap ETFs to its lineup of alternative asset funds.
The firm will start a small-cap South Korean ETF tomorrow, and another that invests in small-cap Taiwan stocks in two weeks, IndexIQ Chief Executive Officer Adam Patti, 39, of the Rye Brook, New York-based firm, said in a phone interview yesterday. ETFs focused on Hong Kong and Singapore also are planned, he said. Those follow small-cap ETFs for Canada and Australia.
Remarks on Over the Counter Derivatives Reform at Council of Institutional Investors
April 13, 2010--Good morning. I thank the Council of Institutional Investors for inviting me to speak this morning. I appreciate all the work you do, along with the Investors’ Working Group, to protect investor interests in America. I recall working closely with you when I worked on the Sarbanes-Oxley Act in 2002, and I look forward to continuing to get the Council’s views on essential financial reform legislation.
As the Senate debates regulatory reform in the coming weeks, one critical issue will relate to the over-the-counter derivatives marketplace. Though there were many causes of the 2008 financial crisis, most would agree that over-the-counter derivatives played a central role.
History of Over-the-Counter Derivatives
Derivatives have been around since the Civil War, when grain merchants came together to hedge the risk of changes in the price of corn, wheat and other grains on a central exchange. These derivatives are called futures. Nearly 60 years and a financial crisis after they first traded, Congress brought Federal regulation to these markets. In the 1930s, the Commodity Exchange Act, which created the CFTC’s predecessor, became law.
From the 1930s until 1980, all derivatives and publicly listed securities were subject to comprehensive oversight by federal regulators. This means that they were traded on regulated exchanges and policed to ensure fair and orderly trading. Things began to change in 1981 with the first over-the-counter derivative transaction. Instead of trading through exchanges and being cleared through clearinghouses, over-the-counter derivatives are generally transacted bilaterally and are not subject to regulation.
Emerging Markets Week in Review -4/5/2010 - 4/9/2010
April 12, 2010--he Dow Jones Emerging Markets Composite Index gained 1.77% last week on renewed signs of recovery in the global economy. Materials and Financials led all sectors, up 3.03% and 2.65% respectively. Technology and Health Care were the least positive, up 0.81% and 0.69% respectively.
All sectors are now positive for the year with Materials leading the way as countries such as Brazil and China continue to announce plans to expand and improve infrastructure.
NSX Releases March 2010 ETF Data Reports
April 12, 2010--Highlights from the March 2010 report include:
* Assets in U.S. listed Exchange-Traded Funds (ETF) and Exchange-Traded Notes (ETN) totaled a record of approximately $819.8 billion at March 2010 month-end, an increase of approximately 68% over March 2009 month-end when assets totaled $489.1 billion. N
* At the end of March 2010, the number of listed products totaled 971, compared to 839 listed products at the end of March 2009.
# March 2010 net cash inflows from all ETFs/ETNs totaled approximately $20.3 billion.
U.S Equity and Fixed income categories both showed strong growth with $12.3 billion and $4.7 billion respectively in net inflows for March 2010.
Visit NSX.com for more info.
Schwab ETFs Surpass $1 Billion in Assets under Management
April 12, 2010--Charles Schwab Investment Management, Inc. (CSIM) announced today that assets under management in its eight Schwab exchange-traded funds (ETF) exceeded $1 billion on April 6, 2010. Since the first four Schwab ETFs(tm) launched five months ago, they have seen significant adoption in the market, driven in part by low operating expense ratios and commission-free online trading in Schwab accounts.
"We're delighted that individual investors and investment advisors are choosing to invest in Schwab ETFs," said Peter Crawford, senior vice president of Charles Schwab & Co., Inc. "They are finding value in our ETFs with their low expenses and commission-free trades online at Schwab as well as the vast education resources available at the ETF Center at Schwab.com."
The first four Schwab ETFs -- the Schwab U.S. Broad Market ETF(TM) (SCHB), the Schwab U.S. Large-Cap ETF(TM) (SCHX), the Schwab U.S. Small-Cap ETF(TM) (SCHA) and the Schwab International Equity ETF(TM) (SCHF) were launched Nov. 3, 2009. The Schwab U.S. Large-Cap Growth ETF(TM) (SCHG) and the Schwab U.S. Large-Cap Value ETF(TM) (SCHV) were launched on Dec. 11, 2009. The Schwab Emerging Markets Equity ETF(TM) (SCHE) and the Schwab International Small-Cap Equity ETF(TM) (SCHC) began trading on Jan. 14, 2010.
Schwab ETFs track an array of domestic and international stock indexes. Schwab ETFs feature competitive fees and core investment offerings, which can make them an excellent option for investors seeking to build a diversified portfolio. In seven of eight Schwab ETFs, the operating expense ratios are the lowest as compared to competitors' offerings in the same category.
As part of its comprehensive offering to investors, which also includes the new SMP-ETF offering launched on January 7, 2010, www.schwab.com/ETF - includes extensive educational materials available that explain the basics of ETFs, and how to invest in them and make trades online at Schwab. Specifically, Schwab's ETF Center offers its clients tools such as an ETF Screener to search for ETFs that offer exposure to various markets, industries and sectors and a way to compare / view side-by-side snapshots of multiple ETFs.
"We believe the success of our initial set of ETFs, along with the vast resources that clients have access to on the Schwab ETF Center, further demonstrates that Schwab is a leading destination for investors seeking ETFs," said Peter Crawford. "We expect to build on this success and intend to have more ETFs to offer investors in other key assets categories in the future."
NASDAQ OMX and the Consumer Electronics Association Introduce the NASDAQ OMX(R) CEA(R) Smartphone Index
April 12, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the Consumer Electronics Association (CEA)® announced today the introduction of the NASDAQ OMX® CEA® Smartphone IndexSM (Nasdaq:QFON), a new benchmark for the telecommunications sector focused on wireless, mobile devices with advanced communications functionality. The NASDAQ OMX® CEA® Smartphone Index is a modified market-capitalization index and includes companies that are primarily involved in the building, design and distribution of handsets, hardware, software, and mobile networks associated with the development, sale and usage of smartphones.
"This index brings sharper focus to an industry that is transforming the world's ability to communicate, work, and interact with each other," said NASDAQ OMX Executive Vice President John Jacobs. "Investors, thanks to this index, can now easily track companies that are working diligently to combine the benefits of the phone and computer in a single device."
"The consumer electronics industry is known for innovation in technology, and we are delighted to work with NASDAQ OMX to bring new innovation to financial products," Shawn DuBravac, chief economist and director of research at CEA. "Smartphones represent the fastest growing segment of the wireless industry, and the ability to track this sector through an index provides a great new tool to investors."
The NASDAQ OMX® CEA® Smartphone Index is currently comprised of 84 companies that are screened by the Consumer Electronics Association, including Apple Inc. (Nasdaq:AAPL), Google Inc. (Nasdaq:GOOG) and Research in Motion Limited (Nasdaq:RIMM). To view all the the companies in the NASDAQOMX® CEA® Smartphone Index, visit our website www.nasdaqomx.com/indexes.
The NASDAQ OMX® CEA® Smartphone Index is the latest in the line of technology themed indexes created by NASDAQ OMX. NASDAQ OMX is leading the way in creating indexes designed to help the investment community track the technology companies that are shaping the way people interact with the world.
The NASDAQ OMX® CEA® Smartphone Index is calculated in real-time across the combined exchanges and is disseminated by NASDAQ OMX in U.S. Dollars. The Index commenced calculation today with a value of 250.00.
NASDAQ OMX is a global leader in creating and licensing strategy indexes and is home to the most widely watched indexes in the world. As a premier, full-service provider, the NASDAQ OMX Global Index Group is dedicated to designing powerful indexes that are in sync with a continually changing market environment. Utilizing its expanded coverage as a global company, NASDAQ OMX has more than 1,400 diverse equity, commodity and fixed-income indexes in the U.S., Europe, and throughout the world.
NASDAQ OMX's calculation, licensing and marketing support provide the tools to measure and replicate global markets. The NASDAQ OMX Global Index Group's range of services covers the entire business process from index design to calculation and dissemination. For more information about NASDAQ OMX indexes, visit https://www.nasdaqomx.com/indexes/.
Access to essential historical index data for NASDAQ OMX indexes can be accessed from a single source, NASDAQ OMX Global Index Watch. For additional information, please visit https://indexes.nasdaqomx.com/indexwatch.aspx.
ETF Innovation Continues With “Contrarian Opportunities” Launch
Javelin’s new offering hopes to beat the broader market benchmarks while sticking to the discipline of an index.
April 9, 2010--As the investment industry struggles with the challenge of delivering active strategies within the exchange-traded fund format, Princeton-based Javelin Investment Management thinks that its new index-based fund has found the sweet spot.
JETS Contrarian Opportunities Index Fund is designed to track the Dow Jones U.S. Contrarian Opportunities Index, whose universe consists of stocks that have underperformed in recent years, but which also applies qualitative screens in the hope of identifying stocks with strong fundamentals.
“This fund advances the concept of index-based investing,” says Javelin president and founder Brint Frith. “Index funds often apply only quantitative criteria, such as market capitalization. The result can be a crudely-defined portfolio that makes no attempt at selectivity. We are impressed that Dow Jones has devised a benchmark that preserves the transparency and discipline of an index, but also encapsulates a well-researched investment strategy.”
The new ETF begins trading today under the symbol JCO. It is the first ETF based on a contrarian strategy, which focuses on stocks that have recently underperformed the market. Javelin’s SEC filing anticipates an expense ratio of .58% for the new fund.
The Dow Jones U.S. Contrarian Opportunities Index is composed of 125 equal-weighted US equities. Eligibility is based on a semi-annual screening that identifies stocks with the lowest three-year trailing total returns. From this pool, constituents are selected according to rankings by ten qualitative factors, including sales growth, price to cash flow ratio, and recent earnings revisions.
Javelin Investment Management was founded for the purpose of introducing new and compelling ETFs. Its first offering, the JETS Dow Jones Islamic Market International Index Fund began trading on July 1 2009.
NSX Announces Innovative Sub-Dollar Pricing Schedule
April 9, 2010--
National Stock Exchange (NSX®) is the first Exchange to implement a new structure for liquidity rebates for sub-dollar securities. NSX's updated Fee Schedule incorporates logic which more closely aligns the rebate with the trading characteristics of sub-dollar securities.
Effective Monday, April 12, 2010, NSX will modify its Fee and Rebate Schedule regarding the liquidity adding rebate for securities priced under one dollar. The new schedule will adjust customer rebates for displayed liquidity to be the lesser of 25 percent of the NBBO spread at the time of execution, and 0.25% (25 basis points) of the total dollar volume of the transaction.
ProShares Announces Reverse Share Splits of Nine ETFs
April 9, 2010--ProShares announced today that it will execute reverse share splits on nine ProShares ETFs. The reverse splits will be effective for shareholders of record after the close of the markets on April 14, 2010. Seven of the funds will execute a 1-for-5 reverse split of shares, and two will execute a 1-for-10 reverse split of shares. The funds will trade at their post-split prices on April 15.
The ticker symbols for the funds will not change, and all will continue to trade on NYSE Arca.
The reverse splits will reduce the number of shares outstanding for the funds, and result in a proportionate increase in the price per share of each fund. The reverse splits do not change the value of a shareholder’s investment. For example, for the 1-for-5 reverse splits, every five pre-split shares held by a shareholder will result in the receipt of one post-split share, which will be priced five times higher than the pre-split shares.
Pax World Management LLC files with the SEC
April 9, 2010--Pax World Management LLC has filed a second amended and restated application for exemptive relief with the SEC.
Applicants seek the Order to permit the operation of ESG Shares FTSE Environmental Technologies (ET50) Index Fund,
a new series of the Trust that is based on an equity securities index, the FTSE ET50 Index (the “ET50 Index”).
The requested relief is substantially identical to the prior relief granted by the Commission to the index-based ETFs issued by WisdomTree.
Brussels reassures US on financial regulation
April 9, 2010--Michel Barnier, the European Union’s internal market commissioner, has written to Tim Geithner, the US Treasury secretary, to assure him that new rules for the hedge fund and private equity industries will not shut foreign funds out of EU financial markets.
“I am convinced that access to the European single market should be granted to managers and funds domiciled in third countries, including the US, provided that high-level standards of transparency and security are guaranteed,” Mr Barnier wrote in a letter sent last week and seen by the Financial Times.
Voluntary Carbon Credit Auction At BM&FBOVESPA Ends Without Buyer
April 9, 2010--The Brazilian Securities, Commodities and Futures Exchange – BM&FBOVESPA held today the first voluntary carbon credit market auction. A total amount of 180,000 voluntary carbon units, divided into three lots of 60,000 tons, from projects managed by the Social Carbon Company were offered. The auction ended without a buyer.
This auction, the first of its kind to be held at an Exchange in Brazil, shows BM&FBOVESPA’s commitment to the Brazilian carbon credit market.
BM&FBOVESPA’s Carbon Credit Market
This is the third carbon credit auction held at BM&FBOVESPA and the first voluntary carbon credit sale to be held at an Exchange in Brazil. The previous auctions were carried out in 2007 and 2008 and offered Certified Emissions Reductions (CERs), held by the São Paulo Municipal Government, and generated by the Bandeirantes and São João landfill projects.
Introducing the Dow Jones U.S. Contrarian Opportunities Index
April 8, 2010--Dow Jones Indexes today announced the launch of the Dow Jones U.S. Contrarian Opportunities Index. The new rules-based index seeks to measure a “contrarian” investment strategy by focusing on companies with strong recent fundamentals but a lagging three-year-trailing return.
The Dow Jones U.S. Contrarian Opportunities Index has been licensed to Javelin Investment Management to underlie an exchange-traded fund (ETF). The ETF will be available tomorrow at NYSE Euronext.
“The Dow Jones U.S. Contrarian Opportunity Index allows market participants for the first time to track a contrarian investment strategy with a rules-based tool,” said Michael A. Petronella, president designate, Dow Jones Indexes. “The Dow Jones U.S. Contrarian Opportunities Index is designed to systematically measure the performance of stocks that lag the broader market in terms of recent performance, but that outrank their peers based on fundamentals-based and other qualitative criteria.”
The universe for the Dow Jones U.S. Contrarian Opportunities Index is the Dow Jones U.S. Broad Stock Market Index, which measures the performance of the largest 2,500 U.S. stocks by float-adjusted market capitalization. These stocks are ranked in descending order by their three-year trailing total returns, and the 1,250 best-performing stocks are removed. The remaining stocks are then ranked in descending order by float-adjusted market capitalization, and the lowest five percent of stocks are removed. The remaining companies join the current index components to form the selection pool and are further ranked by 10 qualitative financial criteria: long-term expected profit growth; enterprise value to EBITDA; earnings-per-share revisions for the current fiscal quarter; earnings-per-share revisions for the next quarter; price/cash flow ratio to five-year median; cash-flow change in the previous quarter; price/earnings ratio; price/free cash flow ratio; total return for the past six months; and five-year sales growth.
For each of the 10 factors, companies are scored based on their ranking; these scores are then summed in a final composite rank. Any existing component company whose composite rank falls from 1-175 will remain in the index, and non-component companies are selected based on composite rank until there are 125 stocks. Sector weighting is capped at 30% of the index.
The Dow Jones U.S. Contrarian Opportunities Index is equal weighted and reviewed semi-annually in January and July with changes taking effect in February and August respectively. The index is calculated in U.S. dollars and both price and total return versions are available. The total return index was up 62.38% in 2009, year-to-date it was up 10.43% as of March 31. Daily back-tested history for the Dow Jones U.S. Contrarian Opportunities Index is available back to January 1, 1999 and monthly back to December 31, 1991. Since its inception on December 31, 1991, the index is up 21.12% annualized based on estimated back-tested data.
For more information on the Dow Jones U.S. Contrarian Opportunities Index, please visit http://www.djindexes.com.
CBOE To Launch Quarterly GLD Options On Friday, April 9
April 8, 2010--The Chicago Board Options Exchange (CBOE) today announced that it will begin trading quarterly options on the SPDR Gold Trust (GLD) on Friday, April 9. Initial expirations will be in June, September, December and March 2011.
Quarterly options, which were first launched by CBOE in July 2006, are designed to provide market participants with options that expire on the last trading day of each quarter to coincide with end-of-quarter accounting practices. By comparison, traditional (monthly) options generally expire on the Saturday following the third Friday of the month.
The Designated Primary Market Maker (DPM) in GLD quarterly options is CTC, LLC, the same DPM for GLD monthly options.
CBOE introduced GLD options with monthly expirations in June 2008. In 2009, its first full year of trading, volume in GLD options at CBOE totaled 12.7 million contracts. Of the then-seven U.S. options exchanges offering GLD options for trading, CBOE had a 37-percent market share in 2009, according to The Options Clearing Corporation.
