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PIMCO Source ETF offers innovative exposure to emerging economies local government debt markets
September 26, 2011--PIMCO, a leading global investment management firm and
Source, a specialist provider of exchange traded products, have launched the PIMCO Emerging Markets Advantage Local Bond Index Source ETF (“EMLB”). The fund offers high quality, diversified exposure that is representative of the countries driving emerging markets growth. Unlike many existing emerging market (EM) local debt indices, EMLB’s underlying index bases country allocation on national income (GDP) and a country’s capacity
to service its debt.
This results in significant allocation to key global economies, including China and India.
According to Chris Getter, Senior Vice President and Emerging Markets Product Manager at PIMCO, GDP weighting is particularly appropriate for global bond investing: “Unlike traditional debt market capitalisation indices, which reflect past patterns of issuance, PIMCO’s GDP weighting is forward‐looking. It emphasises growing economies with strong fundamentals where there may be new opportunities.”
Many emerging market economies have stronger growth prospects and face fewer concerns about debt sustainability than their developed market counterparts, while at the same time offering higher yields. Additionally, local currency bond markets are now larger and more liquid than external debt markets and offer potential for currency appreciation.
Commenting on the launch, Source CEO Ted Hood said: “An emerging market benchmark without exposure to India or China is no longer a credible proposition. Through our partnership with PIMCO, we can deliver a product that marks a significant improvement on existing benchmarks for EM local debt”.
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Source: PIMCO Source ETFs
ETF industry braces itself for transparency push
September 26, 2011--Top heavyweights from the $1.3 trillion exchange-traded fund (ETF) industry are bracing themselves for a shift in how their fast-growing but relatively opaque products are marketed, distributed and regulated.leading industry and sector ETF offering, which now includes 44 SPDRs with $58 billion in assets.
uring a three-hour hearing in Paris on Monday, executives from ETF providers like BlackRock , Societe Generale unit Lyxor and Natixis unit Ossiam picked apart the European Securities and Markets Authority's (ESMA) recent proposals to make ETFs more transparent and ultimately less risky for investors.
But despite some pushback on details such as how ETFs should be labeled, what information should be disclosed and how their risk levels might be controlled, some executives acknowledged the broad push toward more transparency was inevitable.
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Source: Reuters
Turquoise Derivatives Launches FTSE Index Options - FTSE Index Options Join FTSE Futures On New Platform
FTSE Index Options join FTSE Futures on new platform
New product meets market appetite for choice in derivatives trading
Competitive trading, clearing and market making fees from day one
Three market makers committed to provide liquidity in new products
September 26, 2011--Turquoise announced today that it has introduced FTSE Index Options on to its Turquoise Derivatives platform.
The new products represent the next stage of the platform’s development as it moves towards offering a full suite of competitive pan-European derivatives.
Three market makers have committed to provide liquidity from today, including Citigroup and securities trading firm, Tibra Trading Europe Limited. Turquoise Derivatives is dedicated to providing improved on-screen liquidity with tighter spreads, enhanced order-size availability and a more attractive fee structure.
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Source: Turquoise Global Holdings Limited
Leveraged & inverse: Short-term trading vehicles face criticism
September 23, 2011--Db x-trackers, the second-largest ETF player in Europe, is more at ease with the asset class.
It says it offers leveraged and inverse ETFs, but only to financially sophisticated investors, adding that it refers to the products as “daily leveraged” and
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Source: FT.com
ESMA publishes the responses received to the Discussion paper on ESMA’s policy orientations on guidelines for UCITS Exchange-Traded Funds and Structured UCITS
September 23, 2011--ESMA has published the responses received to the Discussion paper on ESMA’s policy orientations on guidelines for UCITS Exchange-Traded Funds and Structured UCITS.
view responses
Source: ESMA
EU hints at 2014 target for financial transactions tax
September 23, 2011--The European Commission hinted on Friday that it may propose a tax on financial transactions across the European Union that could come into force as soon as 2014, earlier than anticipated.
Asked during a news briefing about a planned introduction of the tax in three years, taxation afffairs spokesman David Boublil said it was a "reasonable estimate" of the preferred date, whereas 2018 had previously been floated as realistic.
The European Union's executive will table legislative proposals in the coming weeks, he said.
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Source: EUbusiness
German bond yield falls to new record low level
September 23, 2011--- The yield on German government bonds, the eurozone benchmark, fell on Friday to a record low level only a day after reaching the previous record.
In afternoon trading, the yield on German 10-year bonds dropped to 1.640 percent and then rose slightly. On Thursday, the yield reached 1.665 percent.
The yield on US benchmark bonds also hit a record low level on Friday of 1.707 percent, also breaking a record set on Thursday.
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Source: EUbusiness
Euro falls to seven-month low against dollar
September 22, 2011-- The euro extended falls against the dollar, dropping to a seven-month low, with sentiment damaged by an ECB study saying fiscal imbalances in the euro zone risked undermining the stability and sustainability of the EMU.
The study also warned states should go into financial receivership if adjustment programmes were not on track.
The euro fell as low as $1.3465, its weakest since late February, with traders saying stop loss orders were triggered on the break below $1.3500.
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Source: Reuters
EURO STOXX 50 Index Voted Most Important Index For Product
September 22, 2011--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced that the EURO STOXX 50 Index has been named “Most Important Index for Product” in the inaugural European SRP Euromoney Structured Retail Products Awards sponsored by www.StructuredRetailProducts.com and Euromoney Magazine. Award winners were chosen based on votes cast by nearly 400 members of Europe’s structured products community.
We first launched the EURO STOXX 50 Index over a decade ago when the euro was first introduced. Our vision then was to create a tool that offers investors exposure to blue-chip companies in the euro zone. Today, it continues to be the leading underlying for financial products, including structured products, exchange-traded funds and derivatives contracts,” said Hartmut Graf, chief executive officer, STOXX Ltd. “Winning this award by Structured Retail Products acknowledges our efforts in providing market participants with reliable, innovative and state-of-the-art indices and challenges us to further develop reliable and thorough index underlyings.”
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Source: STOXX
DB Global Equity Index & ETF Research :European ETF Market Weekly Review : Moderate rise in ETF assets as equity markets recover
September 22, 2011--Investment Outlook: Mostly quiet
In the week that ended on September 16th, European domiciled ETPs registered net cash outflows of €51 million. Most of the European equity benchmarks ended higher than the previous week’s close: DAX, Euro Stoxx 50, FTSE 100 & CAC gained 7.4%, 4.1%, 3% and 1.9% respectively.
Fixed Income ETFs attracted cash inflows of €291 million over the last week. Most of these inflows were shared by ETFs offering credit exposure and money market ETFs; €176 million and €143 million respectively.YTD cash flows for fixed income ETFs are now at €1.4 billion.
Equity ETFs registered outflows of €206 million in the past week taking their YTD flows tally to €15.6 billion. Across the board cash outflows reflects the cautious approach of investors towards equity offerings. Within equities, ETFs tracking broad developed market (DM) benchmarks like the MSCI World registered the highest cash inflows in the past week (€157 million). Developed non-European ETFs (mostly US) attracted inflows totaling €117 m illion.
Cash flow activity within commodity ETPs was low in the past week, with flat flows across most of the commodity segments. Commodity ETPs registered outflows totaling to €129 million in the past week. Gold products and broad commodity ETFs witnessed outflows of €78 and €56 million respectively over the past week. YTD cash flows for gold ETPs are now at €2.5 billion.
Assets Under Management (AUM): Moderate rise in assets
Total European ETP assets increased by 0.5% and ended the previous week at €231 billion. Equities gained €2.7 billion to end the week with €136 billion in assets. Overall commodity assets ended the week with €48 billion with a weekly loss of €1.7 billion. Gold ETPs lost close to €1.2 billion in assets mostly due to decrease in the [US$/oz] price of gold [2.3%]. Fixed income ETF assets remained flat to end the week at €44.5 billion.
Exchange Total Weekly Turnover: Modest increase in Turnover levels
Weekly on-exchange ETP total turnover increased by a modest 1.4% to end the week at €15.5 billion. Equity turnover gained close to 6% from its previous levels and ended the week at €11.5 billion. Commodity turnover decreased by over €500 million from its previous levels and ended at €2.6 billion in weekly totals. Fixed Income turnover gained €90 million to reach €1.4 billion.
New ETP Product Launch Calendar: 4 New launches, 11 cross listings
RBS launched an alternative ETF providing exposure to a range of CTA strategies by tracking the RBS CTA indices. This ETF was listed on the Deutsche Boerse.
Lyxor listed an equity ETF offering exposure to the MSCI All country World Index. This ETF was listed on NYSE Euronext Paris.
iShares launched two fixed income ETFs tracking the Markit iBoxx $ High Yield Capped Bond and Barclays Capital US Aggregate Bond respectively. These ETFs were listed on the London Stock Exchange.
Lastly, 11 ETFs were cross listed over various European exchanges in the past week. Please refer to figure 10 for details.
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Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
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