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New launch: PIMCO Short Term High Yield Source ETF
March 19, 2012--PIMCO, a leading global investment management firm and Source, a
specialist provider of exchange traded products, are pleased to announce the launch of the PIMCO Short‐Term High Yield Corporate Bond Index Source ETF (“STHY“).
The Exchange Traded Fund (ETF) is
listed on the London Stock Exchange and aims to track the BofA Merrill Lynch 0‐5 Year US High Yield Constrained Indexi.
STHY is the first ETF available in Europe to provide investors with physical access to the short maturity sector of the high yield universe. High yield exposure has been used by many as an alternative to equities. Historically, returns of the short‐term segment of the high yield market have been in line with equities, but with approximately half the volatility.
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Source: Source ETF
Exchange-Traded Funds Targeted in EU Shadow-Bank Clampdown
March 19, 2012--Exchange-traded funds may face tougher regulation of derivatives trades as part of a European Union clampdown on so-called shadow banks that could pose a threat to the region’s financial system.
The European Commission said today that it is examining potential “conflicts of interest” affecting ETFs, a type of fund that tracks an index and whose shares are publicly traded. The regulator is also reviewing whether banks and other financial firms are using so-called repurchase agreements, or repos, to build up excessive levels of debt.
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Source: Bloomberg BusinessWeek
FSA seeks total ban on inducements
March 18, 2012--The UK's Financial Services Authority has called on the European Union to follow its lead and adopt a Europe-wide ban on inducements for all advisers.
The FSA is one of several influential parties requesting that the European Parliament impose a blanket ban on inducements.
Current proposals set out by the European Commission as part of its Mifid II consultation exercise recommend that inducements are outlawed only for independent advice.
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Source: FT.com
Euro area investment fund statistics
March 18, 2012--In January 2012, the amount outstanding of shares/units issued by euro area investment funds other than money market funds was €220 billion higher than in December 2011.
This increase was due mainly to increases in share/unit prices and the statistical reclassification of some money market funds as bond funds.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to €5,885 billion in January 2012, from €5,665 billion in December 2011. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to €938 billion, from €992 billion. These developments are partly explained by
statistical reclassifications of a number of money market funds as bond funds in January 2012, with the
amount involved totalling about €57 billion (see notes).
Transactions1 in shares/units issued by euro area investment funds other than money market funds amounted to €17 billion in January 2012, while transactions in shares/units issued by money market funds amounted to €6 billion.
The annual growth rate of shares/units issued by euro area investment funds other than money market funds, calculated on the basis of transactions, was 0.5% in January 2012, while the annual growth rate of shares/units issued by euro area money market funds was -0.1%.
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Source: ECB
CDS has amplified European crisis: it’s official!
March 16, 2012--There is now "scientific proof" that credit derivatives have amplified the European debt crisis, a team of researchers said, and has called for more regulation of the market.
They say that failing to make the market more transparent and standardised could lead to financial speculation ruining the massive efforts that developed countries have made to balance their budgets.
Credit default swaps (CDSs) act as insurance against debt issuers defaulting. It should be that the higher the risk of default, the higher the premium on a CDS.
But researchers said this old wisdom is not always true and data proves that these instruments are used for speculation against the deteriorating conditions of sovereign states.
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Source: Funds Europe
Europe looks to trade to spur growth
March 16, 2012--Europe, the world's biggest tariff-free trading bloc, aims Friday to spur growth by revamping trade with the Americas and the Far East.
The European Union wants to rev up trans-Atlantic trade ahead of a G8 summit in Chicago in May, and foreign and trade ministers gathering in Brussels on Friday will seek to give trade a new turbo charge as a way out of recession.
"The process is being taken very seriously on both sides," said an EU official in charge of preparations.
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Source: EUbusiness
Source Physical Gold ETC launched on Xetra
March 16, 2012--A further exchange-traded commodity issued by Source has been tradable on Xetra since Friday. The new ETC enables investors to participate in the performance of the London Gold Market PM Fixing Price.
ETF name: Source Physical Gold P-ETC
Asset class: precious metals
ISIN: DE000A1MECS1
Total expense ratio: 0.29 percent
Distribution policy: non-distributing
Benchmark: London Gold PM Fixing
The Source Physical Gold P-ETC is an exchange-traded bond. The ETC is backed by the physical deposit of gold bars at J.P. Morgan Chase in London.
Deutsche Börse’s ETC segment product range currently comprises 264 products. The monthly trading volume of ETCs on Xetra averages around €900 million.
Source: Xetra
Ossiam Expands Minimum Variance Family of ETFs with Emerging Markets Minimum Variance ETF
March 15, 2012--Ossiam, the investment manager offering specialist exchange traded funds (ETFs) and an affiliate of Natixis Global Asset Management, will list its new ETF, the Ossiam ETF Emerging Markets Minimum Variance NR fund, on the London, Frankfurt, Milan and Paris stock exchanges later this
month.
Bruno Poulin, CEO of Ossiam, commented, “With the launch of our latest fund, Ossiam is providing an
additional solution for investors seeking to build a global equity allocation. This new fund is targeted at
investors who want exposure to emerging markets growth as part of their portfolio, but are wary of high
volatility and risk. The launch of our latest product continues our strategy of setting the standard for
minimum variance ETFs.”
The fund will track a new index initiated by the Ossiam research team, the Ossiam Emerging Markets Minimum Variance Index (Bloomberg: OEMMVNR), calculated and published in real time by S&P1. The index includes a dynamic selection of emerging markets stocks, selected among the 400 most liquid stocks from the S&P IFCI Index. The S&P/IFCI ®Index is a market capitalisation index which tracks the performance of major companies (over 1 800 stocks and ADR) in 20 emerging countries. Ossiam Emerging Markets Minimum Variance Index is weighted with the intention to minimise the volatility of the total portfolio. On average the volatility of the Ossiam Emerging Markets Minimum Variance index is at least 30%2 lower than the S&P IFCI index, with a significant reduction in drawdowns.
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Source: Natixis Global Asset Management
Deutsche Börse and Club Vita aim to open up longevity swaps
A new series of longevity indices which aim to open up longevity swaps to a far larger number of pension schemes is being launched tomorrow by securities trader Deutsche Börse and Club Vita, part of the actuarial firm Hymans Robertson.
March 15, 2012--The Xpect-Club Vita Indices aim to offer UK pension schemes an index-based alternative which better reflect the scheme’s risk profile when pursuing longevity swaps.
The indices will track the different life expectancies of various types of pension scheme members.
According to the two companies, the approach gives schemes the advantages of an index-based trade, while also allowing them to customise the transaction to their member profiles.
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Source: The Actuary
Swiss Franc Advances After Central Bank Raises Growth Forecast
March 15, 2012--The Swiss franc strengthened for the first time in four days against the euro after the central bank raised its growth forecast at a policy meeting.
The currency climbed from a seven-week low against the dollar as the Swiss National Bank predicted the economy will expand 1 percent this year, twice as much as its previous estimate. Policy makers led by interim Chairman Thomas Jordan, maintained their ceiling for the currency at 1.20 francs per euro, and pledged to defend the cap with their “utmost determination.”
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Source: Bloomberg
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