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ETF Securities Lists ETFS Physical Platinum Shares and ETFS Physical Palladium Shares on NYSE Arca
January 8, 2010 –- NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the ETFS Physical Platinum Shares (Ticker: PPLT) and the ETFS Physical Palladium Shares (Ticker: PALL). These products are sponsored by ETF Securities USA LLC.
The ETFS Physical Platinum Shares and ETFS Physical Palladium Shares (individually, the “Shares”) each represent units of fractional undivided beneficial interest in and ownership of the trusts that issued them. The investment objective of each trust is for their Shares to respectively reflect the performance of the price of physical platinum (in the case of the ETFS Physical Platinum Shares), or physical paladium (in the case of the ETFS Physical Paladium Shares), less the expenses of the trust’s operations.
FactorTrust files an with the SEC
January 8, 2010--FactorShares Trust has files an amended request for exemptive relief with the SEC.
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Platinum, palladium prices expected to rise on ETF launch
January 8, 2010--ETF Securities Ltd. launched the first U.S. platinum and palladium exchange-traded funds (ETFs) Friday, a move that market sources say will significantly drive up prices for the precious metals.
Any ETF that allows investors to go ahead and take positions in metals is a bullish event," said James DiGeorgia, editor of investment newsletter Gold & Energy Advisor.
The funds—ETFS Palladium Trust (PALL) and ETFS Platinum Trust (PPLT)—are physically backed by plate and ingot, meaning that as more shares are sold less physical metal will be available to the global marketplace. And in an already tight market for platinum group metals (PGMs), such a supply constriction could send prices through the roof, sources said.
Schwab Throws a Lure Into Asset Pool
January 8, 2010--In a move aimed at getting more of its customers' assets, Charles Schwab Corp. said it will cut online-trading commissions 31% to a flat $8.95 for investors who have small accounts or trade infrequently.
The pricing change, which could reduce the company's first-quarter revenue by $15 million to $20 million, is the latest in a series of initiatives the firm has rolled out to lure investors. In recent years, Schwab eliminated account minimum fees and reduced expenses on certain mutual funds.
Morningstar Quarterly Commentary: Investors should toast the markets in 2009
January 8, 2010--Markets put in an unexpectedly strong performance during 2009. Despite starting the year with barely a pulse, the global economy finished stronger, showing signs of robustness late in the year. Equity investors were rewarded handsomely, as the Morningstar US Market Index posted a gain of 28%, and the Global ex-US Index notched a 41% hike.
Bonds turned in a mixed performance. The Corporate Bond Index posted one of its best years, adding 17% for the year. However, the Government Bond Index turned in a decidedly more muted performance, ending the year with a decline of almost 3%.
In our quarter-end review, Travis Pascavis, Morningstar's director of equity indexes, provides insight into the market's performance.
Javelin files prospectus with SEC
January 7, 2009--Javelin has filed a prsopectus with the SEc for
JETSSM Contrarian Opportunities Index Fund
Investment Objective
The Fund, an exchange-traded fund, seeks performance results that, before fees and expenses, correspond generally to the performance of a benchmark index that measures the investment return of securities that are consistent with contrarian principles.
Russell files amended application with the SEC
January 7, 2010--Russell Investment Management Company has filed an ameded application for exemptive relief from the SEC.
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CFTC to Hold Open Meeting on a Proposed Position Limits Rule
January 7, 2010--The United States Commodity Futures Trading Commission (CFTC) will hold a public meeting on Thursday, January 14, 2010, to consider issuance of a proposed rule on energy position limits and hedge exemptions on regulated futures exchanges, derivatives transaction execution facilities and electronic trading facilities.
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.
Federal Reserve Board Advises Institutions Of Supervisory Expectations For Sound Practices In Managing Interest Rate Risk
January 7, 2010--The Federal Reserve Thursday released an advisory reminding depository institutions of supervisory expectations for sound practices in managing interest rate risk. This advisory, adopted along with the other financial regulators, reiterates the importance of effective corporate governance, policies and procedures, risk measuring and monitoring systems, stress testing, and internal controls related to the interest rate risk exposures of depository institutions. It also clarifies elements of existing guidance and describes interest rate risk-management techniques used by effective risk managers.
The financial regulators recognize that some interest rate risk is inherent in the business of banking. At the same time, institutions are expected to have sound risk-management practices to measure, monitor, and control interest rate risk exposures. The financial regulators expect each depository institution to manage its interest rate risk exposures using processes and systems commensurate with its complexity, business model, risk profile, and scope of operations.
The financial regulators remind depository institutions that an effective interest rate risk-management system does not involve only the identification and measurement of interest rate risk, but also addresses appropriate actions to control this risk. If an institution determines that its core earnings and capital are insufficient to support its level of interest rate risk, it should take steps to mitigate its exposure, increase its capital, or both.
In an accompanying Supervision and Regulation letter to Reserve Bank heads of supervision, the Federal Reserve noted that although the advisory is targeted at depository institutions, the advice provided is also directly pertinent to bank holding companies. Bank holding companies are reminded of supervisory expectations that they should manage and control aggregate risk exposures, including interest rate risk, on a consolidated basis, while recognizing legal distinctions and possible obstacles to cash movements among subsidiaries.
In addition to the Fed, the financial regulators include the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Financial Institutions Examination Council State Liaison Committee.
view ADVISORY ON INTEREST RATE RISK MANAGEMENT
November defaults help boost the total to over $600 billion in bad loans
January 7, 2010--November Credit Loss Trends: A Big LBO Runs Into Trouble
Highlights
November saw the credit loss listings dominated by distressed debt exchanges, as swaps for new and cheaper loans—counted as defaults under our methodology—accounted for 86% of the $61.7 billion in defaults that were toted up by 17 companies this month. November’s tally brought the year to date total to $617.7 billion in bad loans, with one month to go before 2010.
Unfortunately, 2009, has already surpassed 2008 in the total of bad debts.
U.S. International Reserve Position
January 7, 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 $131,174 million as of the end of that week, compared to $133,166 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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December 31, 2009 |
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A. Official reserve assets (in US millions unless otherwise specified) 1 |
Euro |
Yen |
Total |
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(1) Foreign currency reserves (in convertible foreign currencies) |
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131,174 |
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(a) Securities |
10,199 |
13,979 |
24,178 |
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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 |
14,767 |
6,807 |
21,575 |
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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 |
11,385 |
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(3) SDRs 2 |
57,814 |
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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) |
5,182 |
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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) |
5,182 |
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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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Bob Doll's 2010 Forecast: Stocks Rise But Unemployment Stays "Stubbornly High
January 7, 2010--"A return to normalcy." That may be the best way to describe the outlook of BlackRock’s chief investment officer, Bob Doll. After two years of extreme volatility, Doll predicts market and economic conditions will continue to improve in 2010.
Doll forecasts improved economic growth of more than 3% next year. However, that growth maybe tempered for many by "stubbornly high" unemployment.
As for that massive stock market correction the bears are waiting for? Not going to happen, says Doll. He predicts the bull run will keep charging ahead -- albeit at a slower pace -- as the S&P 500 hits 1250 in 2010.
Invesco PowerShares Announces Zero Capital Gains Distributions for 2009 on 116 of 117 Funds
January 7, 2010--Invesco PowerShares Capital Management LLC, a leading provider of exchange-traded funds (ETFs), today announced that 116 out of 117 of its ETFs paid zero capital gains distributions for 2009.
Only one PowerShares ETF — the PowerShares NASDAQ-100 BuyWrite Portfolio (PQBW) — realized a small capital gains distribution (see table below), due largely to the unique underlying index methodology, which writes covered calls on the NASDAQ-100 Index. This is the first distribution for any PowerShares equity or fixed-income ETF since the firm’s 2003 inception.
“Our team manages ETF holdings in a manner which minimizes the amount of capital gains incurred by the funds. For the seventh consecutive year, we are very pleased that the process has prevented capital gains distributions for the vast majority of PowerShares ETFs,” said Ben Fulton, Invesco PowerShares managing director of ETFs. “This achievement highlights one of the many advantages ETFs can provide shareholders seeking to maximize real returns. Reducing the impact of taxes can meaningfully improve an investor’s prospects for creating and preserving real wealth.”
“ETFs generally allow investors greater tax planning flexibility compared to other product structures by providing control over the timing of capital gains,” said Fulton. “Similar to shares of common stock, the shareholders of an ETF typically realize taxable consequences only when shares are sold, thereby potentially minimizing or eliminating tax liability. Additionally, the in-kind method utilized by ETF asset managers during the creation and redemption process generally allows portfolios to avoid year-end capital gain payouts.”
The only PowerShares ETF that paid a capital gain distribution for 2009 — PQBW — is unique in the fact that it accounts for its gain or loss on its investments for federal income tax purposes on a daily mark-to-market basis.
Emerging markets lead hedge fund replication indexes
January 6, 2010--The IQ Hedge Emerging Markets Beta Index was IndexIQ’s strongest performing hedge fund replication index in 2009, finishing the year up 42.96 per cent.
The next best performing index was the IQ Hedge Composite Beta Index, which was up 19.25 per cent at the end of 2009.
IndexIQ’s Hedge Event-Driven Beta Index was up 17.93 per cent, the Hedge Fixed Income Arbitrage Beta Index was up 17.00 per cent and the Hedge Long/Short Beta Index was up 15.80 per cent.
Remarks of Chairman Gary Gensler, “OTC Derivatives Reform”, Council on Foreign Relations
January 6, 2010--Good morning. I thank Professor Merit Janow for that kind introduction and the Council on Foreign Relations for inviting me to speak. I also want to wish you a happy new year. I hope that the new year will bring all that you wish it to bring. For me, that is financial regulatory reform. And of course that my daughter get into the college of her choice.
The 2008 financial crisis left us with many lessons and many challenges to tackle. From addressing institutions that are too big to fail to reforming mortgage underwriting and sales practices, it is essential that the Federal Government take significant steps to prevent the next crisis. This morning, I will focus on the need for comprehensive reform of over-the-counter (OTC) derivative markets.
In the year since the crisis, some have asked: why is it important to bring greater regulation to derivatives now?
The financial crisis certainly highlighted the need for regulatory reform of the derivatives marketplace. Had the crisis not occurred, however, the evolution of these markets would still warrant broad reform.
Derivatives are contracts used by corporations, municipalities, nonprofit organizations and others to protect themselves from the risk of a future change in markets. Every consumer is touched by corporations that use derivatives. Some of these corporations hedge interest rate risks; some purchase products from a supplier who hedged a currency rate. If you flew to visit your family over the holidays, the airline most likely hedged its risk that the price of jet fuel would increase. Local fuel companies use derivatives to lock in the price of winter heating oil for their customers. Many derivatives, called futures, are currently regulated by the Commodity Futures Trading Commission. Futures are standardized, liquid derivative contracts that have traded on exchanges since the 1860s. They are used to hedge many different types of risks. Initially futures products covered agricultural commodities, such as corn and CFTC PAGE 2 OF 4 wheat. They allowed farmers to both hedge a future price risk and get the benefit of the price established through a national market rather than just with a local dealer. After much debate, these markets were regulated in the 1920s – more than sixty years after the first contracts were traded. Over the next sixty years, though futures trading expanded to cover energy products and financial products, Congress responded to ensure that all of these products were traded on central markets and covered by regulation.
