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Post-retirement investment options need improvement
December 7, 2009---The increasing number of Defined Contribution (DC) scheme members approaching retirement age without sufficient savings will drive innovation for post retirement solutions according to a new paper from Watson Wyatt. In the paper the firm suggests that the DC post-retirement hedging and de-risking market is currently under-developed and opportunities exist for greater product development.
Gary Smith, senior consultant at Watson Wyatt, said: “The current practice of formulaic switching from growth assets to protection assets as DC members approach retirement age is too simplistic and will prevent many members from participating in strategies that can enhance the purchasing power of their portfolios. Fiduciaries of DC schemes will also need to increasingly engage older members on this subject.”
In the paper, entitled Managing risk around retirement, Watson Wyatt outlines a number of market-based and regulatory developments that could improve pre- and at-retirement investment and points to three specific examples for doing so:
Introducing flexibility around retirement date
Deferring the date of annuity purchases and adopting a draw down strategy Expanding annuity-type products
Gary Smith said: “Delaying retirement dates is becoming increasingly popular, but members should be careful to use this time to increase contributions while de-risking given their ability to take investment risk will be diminishing.”
The paper includes the recommendation that the adoption of an income drawdown strategy should be considered by members because it provides greater control over their assets, while still allowing them to benefit from purchasing an annuity later. This would also potentially allow them to retain an exposure to growth assets for a longer period, according to the firm.
view Managing risk
around retirement-Improving DC design report
Source: Watson Wyatt
New Source Equity Index ETF Tradable on Xetra
December 4, 2009-- As of today, an additional exchange-traded index fund issued by Source is tradable on Xetra.
ETF name: Dow Jones EURO STOXX 50
Source ETF – unit class B
Asset class: equity index ETF
ISIN: IE00B5B5TG76
Management fee: 0.15 percent
Distribution policy: distributing
Benchmark: Dow Jones EURO STOXX 50
The Dow Jones EURO STOXX 50 Index comprises 50 euro zone stocks, selected on the basis of their market capitalization, trading volume and industry. The returns generated by the fund are distributed to investors semi-annually.
Source already had an ETF based on the Dow Jones EURO STOXX 50 Total Return Index listed on Xetra in April. This product enables investors to participate in earnings via share price performance, with the earnings reinvested in the index. With the ETF included in Xetra trading today, investors now have the opportunity to invest in a Source ETF based on the Dow Jones EURO STOXX 50 Index, with either automatic dividend reinvestment or distribution.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 543 exchange-listed index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of around 11 billion euros, makes Xetra Europe’s leading trading venue for ETFs.
Source: Deutsche Börse
NASDAQ OMX Welcomes 34 New Derivatives Members in 2009
December 4, 2009-ASDAQ OMX
is pleased to report that in 2009 it has welcomed 34 new
members for trading and clearing in Nordic derivatives. This represents
an annual member increase with more than 60 percent compared to last
year.
A membership at NASDAQ OMX Stockholm AB allows access to all
Nordic equities and fixed income derivatives products through one
single trading platform.
Hans-Ole Jochumsen, President of NASDAQ OMX Nordic, said, "We see this large member inflow as a testimony to the strength and attractiveness of our Nordic derivatives market, the home of flagship products like OMXS30, one of Europe's most traded indexes. Since announcing our separation with EDX London many banks and brokers have opted for NASDAQ OMX as their primary market for Nordic derivatives, and we look forward to providing them with a liquid market and broad product range."
NASDAQ OMX is today the fourth largest derivatives exchange in Europe, offering trading in a wide variety of Nordic single stock-, index- and fixed income derivatives products. Among its products are OMXS30, the third most traded domestic index in Europe with more than 400 million traded derivative contracts since its start back in 1986. Since September 2009 NASDAQ OMX also offers trading in Norwegian single stock and index derivatives.
New derivatives members at NASDAQ OMX Stockholm AB include Barclays, Credit Suisse, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, Newedge, and UBS.
Jerome Kemp, Global co-head of Futures & Options and OTC Clearing at J.P. Morgan commented, "We are looking forward to participating with our clients in the opportunities that the NASDAQ OMX market presents, both now and in the future, as they continue to expand their exciting range of products."
Amaury de Villemandy, CEO Newedge Europe & Middle East, said, "NASDAQ OMX has a long history in Nordic derivatives and is the home to many proven products. Newedge is looking forward to offering these directly to our client base."
For a complete list of NASDAQ OMX equities and derivatives members
please visit:
http://nordic.nasdaqomxtrader.com/membershipservices/membershiplist
Source: NASDAQ OMX
HSBC ETF range added to Ascentric
December 4, 2009--HSBC’s nascent exchange-traded fund (ETF) range has been launched on independent wrap platform Ascentric.
HSBC entered the ETF market in August 2009 with the HSBC FTSE 100 ETF, followed in October by the HSBC Dow Jones EURO STOXX 50 ETF.
HSBC entered the ETF market in August 2009 with the HSBC FTSE 100 ETF, followed in October by the HSBC Dow Jones EURO STOXX 50 ETF.
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Source: Hedge Fund Review
EU financiers launch infrastructure fund
December 4, 2009--Major European public financial institutions launched a pan-European equity fund on Friday to boost key EU policies in areas such as climate change, energy security and transport networks.
The "Marguerite Fund" -- a pan-European equity fund -- was launched with initial capital of 600 million euros (900 million dollars) by the European Investment banks and five national public investors.
These include France's Caisse des Depots and Germany's KfW Bankengruppe.
Marguerite, the first joint initiative of Europe's leading public financial institutions, is one of the biggest fund raising exercises in 2009 in Europe, with a target total of 1.5 billion euros by the end of 2011.
The fund "will provide equity or quasi equity to companies which own or operate infrastructure in the sectors of transport and energy," the sponsors said in a join statement.
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Source: EU Business
Standard & Poor’s launches S&P 500 Gold Hedged Index
December 4, 2009--With the returns of gold rivaling that of the US equity market, Standard & Poor’s has launched the S&P 500 Gold Hedged Index.
The index seeks to simulate the returns of an investment strategy which is long the total return of the S&P 500 stock market index and long gold futures contracts, allowing investors to participate in the returns of the US equity market while hedging against a decline in the value of the US dollar versus gold.
Standard & Poor’s has licensed UBS to create and launch investment products based upon the index.
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Source: ETF Express
NASDAQ OMX Starts Trading In Two New ETFs From XACT Fonder
December 4, 2009--NASDAQ OMX Stockholm AB, part of the NASDAQ OMX Group (NASDAQ:NDAQ), today starts trading in two new exchange traded funds (ETFs), XACT Europe Bull 2 and XACT Europe Bear 2.
The two ETFs issued by XACT Fonder are based on the Dow Jones EURO STOXX 50 Index, which reflects the performance of the 50 largest shares in Europe.
XACT Europe Bull 2 and XACT Europe Bear 2 are leveraged exchange traded funds that offer twice the return of the daily change in the underlying EURO STOXX 50 Index. Hence, for XACT Europe Bull 2, which has a positive exposure against EURO STOXX 50, a daily index increase of 1% means an increase in value of 2%. For XACT Europe Bear 2, which has a negative exposure against EURO STOXX 50, a 1% a daily index decrease generates a 2% value return. The leverage increases the potential return but also the risk level.
Jenny Rosberg, Deputy CEO at NASDAQ OMX Nordic said, "These two new ETFs from XACT Fonder will make a great addition to Nordic investors looking for exposure in European blue chip shares. In 2009 we have seen an increased interest in both listing and trading of ETF products, proving that this is a market with great growth potential."
Source: NASDAQ OMX
Moody’s may also raise Turkey’s credit rating
Turkey’s credit rating, which was raised to positive from stable in September, might be increased further within a period of 18 to 24 months or less if the fiscal rule and macro-political predictability of Turkey improves, Kristin Lindow, the regional credit officer for Europe and Africa in the international rating agency Moody’s Sovereign Risk Group, has said.
Speaking to the Anatolia news agency, Lindow noted that so far there is no reason to raise the Turkish government’s Ba3 bond rating. Lindow cited the debt payment capacity of the government as the Turkish economy’s most significant problem, noting that revenues were allocated for only interest payments. Expressing approval about the decision of the Central Bank of Turkey to decrease interest rates, she stressed that if the public financers can govern the situation successfully, the debt pressure might be eased.
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Source: Todays Zaman
First-Ever Exchange-Traded Funds Based on Dow Jones EURO STOXX 50 Index Launch in Sweden
December 4, 2009-- STOXX Limited, the leading provider of European equity indexes, today announced that the Dow Jones EURO STOXX 50 Index has been licensed to XACT Fonder AB to serve as the basis for two exchange-traded funds (ETFs). This is the first time that ETFs based on a regional European index will be available to market participants in the Nordic markets.
The XACT Europe Bull 2 and XACT Europe Bear 2 ETFs -- which seek to apply positive and negative leverage of approximately 200% of the index's performance, respectively, are available on the Stockholm Stock Exchange (OMX NASDAQ) today.
"The Dow Jones EURO STOXX 50 Index continues to be the leading underlying for financial products that seek to offer investors exposure to blue-chip companies in the euro zone equity markets," said Ricardo Manrique, chief executive officer, STOXX Ltd. "The liquid and well-established index tracks the performance of 50 leading stocks within the euro zone and is a valuable addition for XACT Fonder as they expand their offering of leveraged ETFs."
"Our leveraged ETFs are among the most traded ETFs in Europe. It therefore makes sense to add one of Europe's most popular indices -- the Dow Jones EURO STOXX 50 Index -- to our Bull and Bear concept," said Henrik Noren, Managing Director, XACT Fonder.
The Dow Jones EURO STOXX 50 Index was launched on February 28, 1998. It represents 50 supersector leaders in the 12 euro zone countries Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. As of December 3, 2009, the index was up 17.32% for the year.
The Dow Jones EURO STOXX 50 Index is weighted by float-adjusted market capitalization, and each component's weight is capped at 10% of the index's total free-float market capitalization. The index captures approximately 60% of the free-float market capitalization of the Dow Jones EURO STOXX TMI Index. Daily historical data is available back to December 31, 1986.
Source: Dow Jones Indexes
DB Index Research -- Weekly ETF Reports -- Europe
December 3, 2009--Highlights
ETF Volume
Exchange based Equity ETF turnover declined by 1.6% on the previous week. Daily turnover for the previous week was E1.4bn. European fixed income ETF turnover remained at about the same level at E177m, with money market ETFs continuing to be the main focus.
In exchange based bond ETFs, iShares € Corporate Bond has the highest daily turnover of E13.97m. Among the Equity ETFs, iShares DAX (DE) has the highest daily turnover of E69.76m.
There were 16 new listings last week. All new listings were issued by Credit Suisse AM on Deutsche Borse. New listings included 8 cross listed Equity ETFs and 8 new cross listed Bond ETFs.
European Style ETFs, led by short and leveraged products, kept its position as the leading product area with total turnover of E445m accounting for 31.97% of total ETF turnover, followed by European Regional ETFs with total turnover of E372m with 26.71% of total turnover. The DAX ETFs remain the dominant country products with total average daily volume of E192m across the fourteen listed products and accounting for 13.8% of all equity ETF volume.
DJ Euro STOXX 50 ETFs accounted for 13.4% of turnover trading E186m per day with liquidity split across 16 ETFs and 43 different listings on 9 exchanges.
Market Share
The Deutsche Borse XTF platform has the largest market share with 39.0% of total turnover. The Euronext NextTrack platform has 21.5% market share. The LSE’s combined Italian Exchange and London market share is now 24.1%.
Assets under Management (AUM)
Total European Equity related AUM declined by 2.6% to E101.6bn during last week. AUM for DJ Euro STOXX 50 ETFs was E19.7bn accounting for 19.4% of total European AUM. Fixed Income ETF AUM declined by 2.5% to E33.7bn.
Overall, the largest ETF by AUM was Lyxor ETF DJ Euro STOXX 50, an Equity based ETF, with AUM of E4.9bn. The largest Fixed Income ETF by AUM was the iShares € Corporate Bond with AUM of E3.2bn.
To request a copy of the report
Source: Aram Flores and Shan Lan -DB Index Research
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