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Vanguard picks London Stock Exchange and FTSE for European ETF debut
FTSE licenses Vanguard with flagship FTSE All-World, FTSE Emerging and FTSE 100 indices for new products
Vanguard Managing Director opens trading in London
Over 900 exchange traded products now listed on LSE
May 23, 2012--London Stock Exchange (LSE) today welcomes Vanguard Asset Management (Vanguard) as a new ETF issuer on its Main Market.
Vanguard has listed five ETFs on LSE – its first such products in Europe. FTSE Group ("FTSE") has licensed Vanguard with its flagship FTSE All-World, FTSE Emerging and FTSE 100 indices to support the products.
Vanguard is LSE’s 15th ETF issuer and today’s admissions bring the total number of London-listed exchange traded products to 933. The licensing of the indices also adds to FTSE’s expanding European ETF business, which accounts for 94 FTSE index-linked products 70 of which are listed on LSE.
To mark the debut Doug Webb, CFO at London Stock Exchange Group and Nick Teunon, Chief Financial Officer of FTSE Group, joined Thomas Rampulla, Managing Director at Vanguard Asset Management, to open trading in London this morning.
Pietro Poletto, Head of Exchange Traded Products at London Stock Exchange Group, said:
“The range of ETFs available to investors accessing our markets continues to grow. Today we are delighted to welcome one of the world’s leading asset management firms, Vanguard, as a new ETF issuer on our markets. We continue to be the leading European exchange for ETFs, and are committed to providing investors with an evermore liquid, competitive marketplace.”
Many synthetic ETFs in 'danger zone'
May 23, 2012--More than three-quarters of the synthetic exchange traded funds listed in Europe are at risk of closure after failing to attract sufficient inflows in their first three years since launching, according to Rick Genoni, global head of ETFs for Vanguard.
Mr Genoni said ETFs which failed to reach $30m in assets were at “huge risk” of closure. He noted that half of all ETFs, including synthetic and non-synthetic, launched in Europe in the last five years were in the “danger zone”.
European Parliament votes in favour of FTT
May 23, 2012--The European Parliament voted on 23 May in favour of a financial transaction tax, with a vote of 487 out of 685 in favour. The vote came hours before EU leaders will discuss at an informal growth summit the possibility of introducing such a tax.
"EU leaders meeting today cannot afford to ignore this overwhelming vote in favour of an EU-wide tax on financial transactions,” Nicolas Mombrial, Oxfam’s EU policy advisor said. “Latest polls show two-thirds of Europeans support an FTT, which helps explain why MEPs from all political parties and from countries opposing the tax, such as the UK and the Netherlands, voted in favour."
According to a recent Eurobarometer survey on “The crisis and the economic governance in Europe,” 66% of Europeans now favor a financial transaction tax.
Eurobonds and project bonds: telling them apart
May 23, 2012--Advocates of spurring growth in Europe have put on the table two financial instruments -- eurobonds and project bonds -- which both entail joint borrowing but differ in detail and scale.
EUROBONDS
The creation of eurobonds has long been promoted by advocates of a more federal Europe. In short, eurozone member states would begin raise funds on debt markets by issuing so-called eurobonds, and would be collectively responsible for the interest due and for repayment of the amount borrowed.
Such joint debt, which the European Commission has repeatedly proposed, would offer several advantages.
PROJECT BONDS Project bonds, which have also been dubbed "baby eurobonds", would be bonds jointly issued by several or all eurozone states. But instead of the funds going to the national coffers for general use, they would be dedicated to a specific infrastructure project. Concrete assets would back the bonds in addition to the guarantees provided by the countries.
Eurozone states admit contingency plans for Greek euro exit
May 23, 2012--Eurozone countries admitted Wednesday they are examining likely costs and possible complications arising from a potential exit for Greece, but maintain contingency planning is only prudent commonsense.
Treasury officials from the other 16 eurozone member states were told this week to "reflect" on what an exit would mean for their economies in preparation for eventual "coordination concerning what each must do on a European level," a diplomat from one eurozone country told AFP.
EU leaders open 'no taboos' growth summit
May 23, 2012--European Union leaders opened Wednesday a "no taboos" summit called to work out how to spur growth in the debt-stricken eurozone.
As markets plunged and the euro hit a near two-year low on worries over Greece's eurozone future and Spain's troubled banks, leaders were to discuss the possible launch of eurobonds -- jointly pooled eurozone debt -- and a tax on financial transactions.
EU leaders open eurobonds debate at 'growth' summit
May 23, 2012--Euro leaders have promised a no-holds-barred debate at an EU summit Wednesday on whether to guarantee each others' borrowings in future, seen as essential if Greece ends up exiting the single currency.
Against deepening worries over Spanish bank finances and concerns that other debt-laden countries would tumble should Greece break away, new French President Francois Hollande, a socialist, and German Chancellor Angela Merkel will discuss so-called eurobonds under moves to re-balance austerity with measures to kickstart growth.
EDHEC-Risk Research Shows that Dynamic Portfolio Strategies Can Provide Solutions to Corporate Pension Fund Challenges
May 23, 2012--A new publication entitled "Dynamic Investment Strategies for Corporate Pension Funds in the Presence of Sponsor Risk," produced as part of the BNP Paribas Investment Partners research chair on asset-liability management and institutional investment management at EDHEC-Risk Institute, shows that sophisticated dynamic allocation strategies can usefully be implemented by pension funds.
One of the key findings of the paper is to show that imposing a cap on the funding ratio, in addition to a floor, has a positive impact on both pensioners and bondholders, while only having a minor negative effect on equity value.
The paper introduces novel forms of dynamic strategies that recognise that pension risk is not only driven by the funding ratio of the pension fund, but also by the financial strength or weakness of the sponsor company. These strategies aim to control sponsor risk by avoiding states of the world where the pension fund is underfunded and the sponsor is unable to make up for the gap.
Euro area investment fund statistics
May 23, 2012--In March 2012, the amount outstanding of shares/units issued by euro area investment funds other than money market funds was €407 billion higher than one quarter earlier in December 2011.
This increase was mainly due
to increases in share/unit prices.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to €6,069 billion in March 2012, from €5,662 billion in December
2011. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to €951 billion from €992 billion. These developments are partly explained by statistical
reclassifications of a number of money market funds as bond funds in the first quarter of 2012, with the
amount involved totalling about €70 billion (see notes).
Transactions1 in shares/units issued by euro area investment funds other than money market funds amounted to €95 billion in the first quarter of 2012, while transactions in shares/units
issued by money market funds amounted to €32 billion.read more
Parliament adopts ambitious approach on financial transaction tax
May 23, 2012--The proposed financial transaction tax should be better designed to capture more traders and make evasion unprofitable, said the European Parliament in its opinion adopted on Wednesday. The opinion also says the tax should go ahead even if only some Member States opt for it.
The tax rates proposed by the Commission (0.1% for shares and bonds and 0.01% for derivatives) are considered suitable and pension funds should be the only sector exempted from the tax.
Parliament has been calling for a financial transaction tax (FTT), for close to two years and the Commission tabled a legislative proposal for one late in 2011. The latest Eurobarometer survey shows that 66% of Europeans favour such a tax.
