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Bonds Switch Signals End of Cult of Equity
November 20, 2012--It is a once in a generation moment. For the first time in more than 50 years UK pension funds are holding more bonds than equities.
Some fund managers have called it the death of the “cult of equity” and say it is part of the most significant market allocation trend since the 1950s. The shift to bonds has huge implications for the performance of pension funds and those that manage money for them.
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Source: FT.com
Deutsche and Lyxor in major physical ETF U-turn
November 19, 2012--Deutsche Bank and Lyxor Asset Management are making their first foray into the physical exchange traded fund (ETF) space, marking a major turn for the stalwart swap-based providers.
Db X-trackers, the ETF arm of Deutsche Bank and second largest issuer in Europe, is launching a range that allows investors to choose between physical and synthetic replication of major equity benchmarks.
The initiative, which will see the first of the new funds launched in December, will allow investors to choose between physical and swap-based db X-trackers ETFs tracking German, US, Japanese, British and eurozone equity markets.
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Source: CityWire
Russell Investments launches local currency EMD fund
Multi-manager specialist launches Dublin-domiciled strategy with two specialist firms handed dual mandate.
November 20, 2012--Russell Investments has unveiled a local currency emerging market debt fund to be run on a dual mandate by Stone Harbor Investment Partners and Pictet Asset Management.
The London-based multi-manager outfit announced the Emerging Market Debt Local Currency Fund will be Dublin-domiciled and follow a two-manager structure.
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Source: CityWire
The Spanish Stock Exchange trades 1 new ETF issued by Lyxor
November 20, 2012--The Spanish Stock Exchange will today admit to trading, at the market close, one new exchange-traded fund (ETF) issued by LYXOR, Société Générale's asset manager: the ETF, called LYXOR ETF EURO STOXX 50 Daily Short, will start trading tomorrow.
This issue brings the number of ETFs listed on the Spanish Stock Exchange to 70.
The trading volume on the ETF segment to October reached €2.41bn on 49,040 trades.
Source: Bolsas y Mercados Españoles (BME)
Lyxor converts 4 Lyxor ETFs to physical replication
November 20, 2012--Lyxor Asset Management confirms the launch of 4 new physically replicated ETFs.
In September, Lyxor International Asset Management announced plans to launch a range of physical ETFs by the end of 2012.
On December 6th and 11th, 4 ETFs based on the EuroMTS Macro Weighted AAA Government Index series will be converted to physical replication.
The funds will be managed using full replication: each fund will invest directly in all the sovereign bonds that make up the respective EuroMTS Macro Weighted AAA Government Index, without any sampling. This will achieve the highest possible correlation between the performance of the funds and the performance of the indices.
Securities lending is not part of the management process as the performance benefit to investors would be negligible, and would not justify the addition of counterparty risk to the fund. As announced previously, Lyxor diversifies its offer to physically replicated ETFs in order to fully address investors’ needs. Lyxor stresses that regardless of the method used to replicate the index, all Lyxor ETFs will comply with high quality standards for transparency, efficiency (performance and low tracking error) and superior liquidity.
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Source: Financial Investigator
Moody's strips France of triple-A rating
November 20, 2012--Moody's Investors Service downgraded France's sovereign rating by one notch to Aa1 from triple-A, the agency said on Monday, citing the country's uncertain fiscal outlook as a result of "deteriorating economic prospects".
Moody's said it is maintaining a negative outlook on the country due to structural challenges and a "sustained loss of competitiveness" in the country.
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Source: FIN24
New SPDR ETF launched on Xetra
ETF tracks corporate bonds from emerging markets
November 20, 2012--A new exchange-listed equity index fund issued by SPDR (State Street Global Advisors) has been tradable on Xetra since Tuesday.
ETF name: SPDR BofA Merrill Lynch Emerging Markets Corporate Bond UCITS ETF
Asset class: bond index ETF
ISIN: IE00B7LFXY77
Total expense ratio: 0.50 percent
Distribution policy: distributing
Benchmark: BofA Merrill Lynch Emerging Markets Diversified Corporate ex-144A Index
The SPDR BofA Merrill Lynch Emerging Markets Corporate Bond UCITS ETF enables investors to participate in the performance of emerging market corporate bonds denominated in US dollars for the first time. All bonds admitted to the reference index have an outstanding volume of at least USD 500 million and a residual maturity of at least one year, and must also represent senior and secured corporate debt issued in the US or Europe.
The index currently comprises bonds from companies located in Argentina, Bahrain, Barbados, Brazil, China, Colombia, Costa Rica, Egypt, Hong Kong, Indonesia, Israel, Jamaica, Kazakhstan, Korea, Kuwait, Malaysia, Mexico, Nigeria, Peru, Russia, Saudi Arabia, Singapore, South Africa, Thailand, Trinidad, Turkey, the UAE, Ukraine and Venezuela.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 1,005 exchange-listed index funds, making it the largest offering of all European stock exchanges.
Source: Xetra
Shadow banking: balance benefits and risks, say MEPs
November 20, 2012--"Shadow" banks, such as hedge funds or trading houses, benefit the real economy by lending to risky ventures that regular banks avoid.
But if their loans turn bad, they may collapse, taking regular banks with them, because they lack a capital cushion. Better prudential oversight is needed to reduce shadow banking's systemic risks, without stifling its benefits to the economy, say MEPs in a resolution voted on Tuesday.
Shadow banking institutions account for up to 30% of the global financial system, worth over €50 trillion in 2011. In good times, they provide credit to people or entities that otherwise cannot get it and so fund the real economy. But if they make bad investments they have no protection, because they do not hold deposits and have no access to central bank liquidity.
Risks to regular banks
Shadow banks do not exist on their own. They are interconnected with regular banks, which often use them to get round capital and accounting rules. If they collapse, they can cause a domino effect across other financial institutions and borders, bringing down regular banks and ultimately harming taxpayers across the EU who are obliged to come to the rescue.
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Source: European Parliament
ESMA publishes an opinion on the interpretation of Article 50(2)(a) of the UCITS Directive
November 20, 2012--ESMA has published an opinion on the interpretation of Article 50(2)(a) of the UCITS Directive
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Source: ESMA
MEP proposes ban on fund manager performance fees
Funds charging performance fees could be threatened by European ruling on charges.
November 19, 2012--Fund managers could be banned from charging performance fees under European proposals that could be included in a future Ucits directive.
Amendments to the latest Ucits rules, which cover the majority of open-ended funds in the UK, include a proposal to limit charges to a percentage of a fund’s size, rather than any performance-related measure.
The Ucits V proposals, which were tabled by German MEP Sven Giegold,
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Source: FT Adviser
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