Americas ETP News
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Active ETFs Come Into View
New funds are mostly designed to balance core positions. Still lots of room for competition in traditional equity space.
August 11, 2012--The long incubation of actively managed exchange-traded funds may be ending. A spate of active-equity releases has landed on U.S. exchanges recently-all of them hoping for even half the success Pimco's Total Return ETF (ticker: BOND) has seen since its launch this spring
The active ETF universe is "heterogeneous," says Morningstar ETF analyst Robert Goldsborough, though heavily skewed toward fixed income. "There are a lot of unique strategies, but not a lot of mainstream equity entries yet." It's also still just a tiny sliver of the industry: Active ETFs have just under $7 billion altogether, Goldsborough says. There's $1.2 trillion in U.S. ETFs.
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Source: Barrons
Knight Capital Group Calls In Consultants To Review Systems After August 1 System Snafu
August 10, 2012--Knight Capital Group in a 10-Q quarterly filing made on 9 August said that it had initiated an internal review into its August 1 system malfunction at the opening of trading at the NYSE on August 1, 2012.
In the filing Knight said:
"We experienced a technology issue at the open of trading at the NYSE on August 1, 2012. This issue was related to the installation that day of trading software and resulted in us sending numerous erroneous orders in NYSE-listed and NYSE Arca securities into the market. Although this software was subsequently removed from our systems and clients were not negatively affected by the erroneous orders, it resulted in us realizing a pre-tax loss of approximately $440.0 million. This event severely impacted our capital base and business operations, and we experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence. As a result, there was substantial doubt about our ability to continue as a going concern. Following the event of August 1, 2012, we have begun an internal review into such event and associated controls.
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Source: Placing Traders
BNY Mellon ADR Index Monthly Performance Review is Now Available-July 2012
August 10, 2012--The BNY Mellon ADR Index Monthly Performance Review July 2012 is now available.
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Source: BNY Mellon
CFTC.gov Commitments of Traders Reports Update
August 10, 2012--The current reports for the week of August 7, 2012 are now available.
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Source: CFTC.gov
Short-Selling Bans Failed to Prevent U.S. Stock Price Declines
August 10, 2012--Bans on short-selling imposed during the financial crisis in the belief that short sales were driving United States stock prices below fundamental values did little to stabilize those prices, according to a new study by New York Fed economists. In addition, the bans had the unwanted effects of lowering market liquidity and boosting trading costs.
In "Market Declines: What Is Accomplished by Banning Short-Selling?" New York Fed economist Hamid Mehran and Notre Dame finance professors Robert Battalio and Paul Schultz investigate the link between short-selling and market downturns. The authors first evaluate evidence on the bans’ effectiveness in limiting share price declines in 2008. To provide additional evidence, the three then consider the market effects of short-selling in August 2011, when the debt-rating agency Standard and Poor’s lowered the U.S. sovereign long-term credit rating, prompting the S&P 500 to fall 6.66 percent on the next trading day. At the time, there was no short-selling ban in place in the U.S.
view the Market Declines: What Is Accomplished by Banning Short-Selling?
Source: Federal Reserve Bank of New York
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices-The Semi-Annual Review Of The S&P/TSX Venture 30 Index
August 10, 2012--S&P Canadian Index Services announces the results of the semi-annual review of the S&P/TSX Venture 30 Index effective after the close of trading on Friday, August 17, 2012.
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Source: Momdovisione
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices-A Deletion From The S&P/TSX Venture Composite Index
August 10, 2012--S&P Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:
The Combination Transaction between U.S. Silver Corporation (TSX:USA) and RX Gold & Silver Inc. (TSXVN:RXE) has been completed.
RX Gold & Silver Inc. will be removed from the S&P/TSX Venture Composite Index after the close of trading on Friday, August 10, 2012.
Source: Standard & Poors
ETF closures show market getting tougher for firms
ETFs closing after months of going live
Some expect further closures soon
August 10, 2012--Recent exchange-traded fund closures are raising new questions as to whether the ETF market has passed its prime.
Just in the past week, Scottrade announced it is shutting down its ETF business, Russell Investments said it is considering a similar move and Direxion Shares said it was closing a number of ETFs.
Experts say a consolidation of the $1.2 trillion industry may be ahead as firms contend with tightening margins, an increasingly crowded ETF market and growing reluctance by executives to invest in marketing new products.
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Source: Reuters
Short-Selling Bans Failed to Prevent U.S. Stock Price Declines
August 10, 2012--Bans on short-selling imposed during the financial crisis in the belief that short sales were driving United States stock prices below fundamental values did little to stabilize those prices, according to a new study by New York Fed economists. In addition, the bans had the unwanted effects of lowering market liquidity and boosting trading costs.
In "Market Declines: What Is Accomplished by Banning Short-Selling?" New York Fed economist Hamid Mehran and Notre Dame finance professors Robert Battalio and Paul Schultz investigate the link between short-selling and market downturns. The authors first evaluate evidence on the bans’ effectiveness in limiting share price declines in 2008. To provide additional evidence, the three then consider the market effects of short-selling in August 2011, when the debt-rating agency Standard and Poor’s lowered the U.S. sovereign long-term credit rating, prompting the S&P 500 to fall 6.66 percent on the next trading day. At the time, there was no short-selling ban in place in the U.S.
view Market Declines: What Is Accomplished by Banning Short-Selling?
Source: Federal Reserve Bank of New York
Horizons ETFs appoints Guardian Capital as Sub-Advisor of the Horizons Dividend ETF
August 10, 2012--AlphaPro Management Inc. ("AlphaPro") and its affiliate Horizons Exchange Traded Funds Inc. ("Horizons ETFs") are pleased to announce that, effective immediately, Guardian Capital LP ("Guardian Capital") will assume the sub-advisory role for the Horizons Dividend ETF (the "Horizons HAL") which trades on the Toronto Stock Exchange
("TSX") under the ticker symbols HAL and HAL.A.
The investment objective of Horizons HAL is to seek long-term total returns consisting of regular dividend income and modest long-term capital growth. Horizons HAL invests primarily in equity securities of major North American companies with above average dividend yields.
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Source: Horizons Exchange Traded Funds Inc.
