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ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 18-Mar-2011
March 23, 2011--For the week ending 18 March 2011, there were US$304.3 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in utilities with US$119.2 Mn followed by insurance with US$82.8 Mn net outflows while retail experienced net inflows of US$21.8 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$810.8 Mn net inflows. Banks has seen the largest net inflows with US$493.7 Mn, followed by oil and gas with US$471.7 Mn net inflows while automobiles and parts experienced the largest net outflows with US$131.7 Mn.
As of 18 March 2011, there is US$10.7 Bn AUM invested in the STOXX sector ETFs which is almost double the US$6.5 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 16 out of 19 sectors.
ESMA establishes a framework for third country prospectus and applies this new framework to facilitate Israeli issuers access
March 23, 2011--The European Securities and Markets Authority (ESMA) has published a statement which sets out a
framework, (ESMA/2011/36), on the way in which third country issuers in general, can meet the requirements of the PD. The framework allows prospectuses from non-EU countries, drawn up in accordance with third country legislation, to have a 'wrap' added, so that the resulting document meets the requirements of the EU Directive.
ESMA also announces today, in a Statement (ESMA/2011/37), that Israeli issuers may list their prospectus for shares on any EU regulated market, on the basis of a prospectus drawn up in accordance with Israeli regulation, with
the addition of a ‘wrap’ which contains a number of supplementary disclosures. The new framework will ensure that Israeli prospectuses meet the requirements of the EU's Prospectus Directive (PD), enabling EU
investors to continue to enjoy equivalent levels of protection in receiving similar information in considering offers from third country issuers.
read moreview the Framework for third country prospectuses under Article 20 of the Prospectus Directive(ESMA/2011/36)
view the ESMA statement on Israeli laws and regulations on prospectuses (ESMA/2011/37)
EFRP criticises 'short-termism' of European pension policy
March 23, 2011--Governments across Europe have been criticised for their short-term approach to pension savings by the European Federation for Retirement Savings (EFRP), which said clawing back privately managed pension assets or selling off reserve fund holdings would not change a country's net debt.
Responding to the European Union's recent annual growth survey, the lobby group said governments should look for long-term solutions to mounting debt and that growing private pension provision was one of these, as it reduces dependence on state benefits.
World Water Day: Governments must invest in water and sanitation
March 23, 2011--Would people invest more in clean water if they knew just how expensive dirty water is? World Water Day is an opportunity to remind governments worldwide that they have a responsibility to invest in clean water for the health of their citizens and their environments.
“People in developing countries can least afford to treat water-borne disease. Governments and the international community need to overcome the annual shortfall of USD 10-30 billion to meet the water and sanitation infrastructure goals implied by the Millennium Development Goals.” says OECD Secretary-General Angel Gurria. “For governments, basic water supply and sanitation services are a good investment, with the savings outstripping costs by 7 fold.”
Developed countries too must invest. The US will have to spend USD 23 billion over each of the next 20 years to maintain water infrastructure at levels which meet health and environmental standards. The UK and Japan will need to increase their water spending by 20 to 40% to cope with urgent rehabilitation and upgrading of their water infrastructure
New ETFlab bond index ETF launched on Xetra
March 23, 2011--Deutsche Börse is further expanding its XTF segment for exchange-listed index funds on the Xetra trading platform. A new ETF issued by ETFlab was admitted to trading on Tuesday.
ETF name: ETFlab iBoxx € Liquid Non-Financials Diversified
Asset class: bond index ETF
ISIN: DE000ETFL383
Management fee: 0.20 percent
Distribution policy: distributing
Benchmark: Markit iBoxx € Liquid Non-Financials Diversified Index
The ETFlab iBoxx € Liquid Non-Financials Diversified ETF offers investors the opportunity to invest in the performance of euro-denominated corporate bonds issued by companies outside the financial sector. The reference index comprises a maximum of 40 bonds from companies headquartered in the euro zone and in Denmark, Norway, Sweden, Switzerland and the UK. The bonds have an outstanding volume of at least €750 million. The weighting of a bond in the index is limited to 7.5% and the index may contain no more than two bonds from the same issuer.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 804 exchange-listed index funds, making it the largest offering of all European stock exchanges.
Work on "ISE Sustainability Index"(ISESI) in progress - Brief on Turkey's ecological footprint and its effect in the investment environment
March 23, 2011--"Responsible investment", which includes social, environmental and ethical business performance in addition to economical performance to company valuation criteria, has become an important investment theme recently. In consideration of this fact, Istanbul Stock Exchange (ISE) continues to work in cooperation with the Turkish Business Council for Sustainable Development on the Istanbul Stock Exchange Sustainable Index (ISESI) project, within the framework of which, seminars, panels and workshops have been organized in the last two days.
The seminar organized at the ISE Conference Hall today focused on Turkey’s ecological footprint and its effect in the investment environment, while the representatives of the ISE-traded companies discussed the first draft of the ISESI criteria at a workshop.
During the seminar, Mr. Alessandro GALI, Italian scientist known for his work on ecological footprint; Mr. Gürdo?ar SARIGÜL, Sector Manager, Environment and Sustainable Development, Delegation of the European Commission to Turkey, Mr. Hakan GÜRDAL, Akçansa General Manager, Mr. R?za Fikret YIKMAZ, Planning Specialist from the State Planning Organization of Turkey, and Mr. Edoardo GAI, Sustainability Services Director of SAM Group, delivered presentations. The speakers talked about Turkey’s ecological footprint, Turkey’s position with regard to climate and similar environmental issues, relevant work and arrangements in the public sector, and the importance of such work with regard to corporate performance and decision-making process for investments. The seminar also discussed the main environmental issues facing Turkey, the effects of ecological development on financial performance and competition in Turkey, and the role of the public sector and the business world on the drain of resources and climate change.
FSA publishes Business Plan for 2011/12
March 22, 2011--The Financial Services Authority (FSA) has today published its business plan setting out its priorities for 2011/12, and the implications for the FSA's budget. The document outlines the FSA's priorities and specific initiatives for the year ahead, which reflect the continuing challenges facing the financial services industry.
This year’s business plan has been created against a backdrop of considerable change, with the UK government last year announcing plans for changes to the structure of financial services regulation in the UK. The FSA will restructure into the Prudential Regulation Authority (PRA) and the existing FSA legal entity will become the Financial Conduct Authority (FCA). This change will occur at the end of 2012 or early 2013. Until then the FSA will continue to deliver on its statutory objectives and implement the major initiatives that are already underway. The key areas will include:
Maintaining ongoing supervision in a period of continued fragility in markets.
Continuing to influence the international and European policy forums, delivering, in particular, the new prudential regulatory agenda.
Corporate Bonds ohne Bankentitel-ETFlab bietet ETF mit europäischen Anleihen von Unternehmen, die auβerhalb der Finanzwirtschaft tätig sind
ETFlab iBoxx € Liquid Non-Financials Diversified ISIN: DE000 ETFL38 3
22. März 2011. Der Münchener Spezialist für börsengehandelte Indexfonds, die ETFlab Investment GmbH, ermöglicht mit dem ETFlab iBoxx €Liquid Non-Financials Diversified den Zugang zu einem groβen Korb von Euro-Unternehmensanleihen, die auβerhalb der Finanzwirtschaft tätig
sind. Papiere von Banken und Finanzdienstleistern sind in dem abgebildeten Index nicht enthalten.
"Damit entsprechen wir der Nachfrage von Investoren, die nach der Finanzkrise aus verschiedenen
Gründen keine Bankanleihen im Portfolio haben möchten", erläutert Andreas Fehrenbach,Geschäftsführer von ETFlab. Aber sie kämen auch so „breit diversifiziert in den Genuss einer deutlich höheren Rendite als bei Staatsanleihen, zur Zeit rund 100 Basispunkte", wie der ETF-Experte hervorhebt. Generell sei es bei Unternehmensanleihen unbedingt ratsam, ein Engagement über Branchen und Länder hinweg zu streuen. „Dazu eignet sich ein ETF in idealer Weise, denn der Investor kauft mit einem Trade gleich ein ganzes Anleiheportfolio", betont Fehrenbach.
Außerdem weist der ETF-Experte darauf hin, dass gerade in Zeiten steigender Zinsen Unternehmensanleihen oft die besser Wahl seien. Denn die gute Konjunktur und die verbesserten Geschäftsaussichten vieler Unternehmen ließen die Spreads, die Abstände zwischen Unternehmens- und Staatspapieren, tendenziell schrumpfen.
In dem zugrunde liegenden Index sind 40 Euro-Anleihen von Emittenten enthalten, deren Hauptsitz in Euroland, der Schweiz, Großbritannien, Schweden, Norwegen und Dänemark liegt und deren Hauptbetätigungsfeld nicht finanzwirtschaftlich geprägt ist. Qualifiziert sind nur vorrangige Schuldentitel mit einem festen Kupon. Um die Risiken zusätzlich zu begrenzen, wurden weitere Vorkehrungen getroffen. Pro Emittent sind nur zwei Titel erlaubt, die Gewichtung pro Emittent ist auf 7,5 Prozent begrenzt. Berücksichtigt werden nur Emittenten mit einer Beurteilung von mindestens BBB-. Generell darf die Emission der Schuldentitel im Index nicht länger als drei Jahre zurückliegen. Die Restlaufzeiten liegen zwischen 1,5 bis 10 Jahren.
Der ETF bildet den Index voll replizierend nach, d. h. die Original-Wertpapiere sind in dem nach UCITS III richtlinienkonformen Sondervermögen enthalten. Aktuell haben 73 Prozent der enthaltenen Papiere ein Rating von A oder besser. Von den Ländern sind am stärksten die Niederlande (34 %), Frankreich (23 %) und Großbritannien (11 %) gewichtet. Die aktuelle Indexzusammensetzung berücksichtigt vor allem die Branchen Versorger (28 %), Telekommunikation (17 %) sowie Öl & Gas (11 %). Die durchschnittliche Restlaufzeit liegt bei knapp über fünf Jahren bei einer Rendite von 3,7 Prozent. Mit einer Gesamtkostenquote (TER) von 0,20 Prozent zählt der neue Fonds zu den preiswertesten unter den Corporate-Bond-ETFs weltweit.
Corporate Bonds Non-Financials -ETFlab offers exchange traded funds (ETF) with European bonds of companies that are not predominantly active in the financial sector
ETFlab iBoxx €Liquid Non-Financials Diversified (ISIN: DE000 ETFL38 3)
March 22, 2011-. The Munich specialist in exchange traded funds ETFlab Investment GmbH offers access to a large selection of euro corporate bonds through its ETFlab iBoxx € Liquid Non-Financials Diversified fund, which contains bonds of companies that are not predominantly active in the financial sector. "In this respect, we are responding to demand from investors, who as a result of the financial crisis do not invest in bonds of issuers out of the financial sector for various reasons," explains Andreas Fehrenbach, ETFlab's Managing Director.
But even so investors will "be broadly diversified and enjoy a significantly higher yield than with government bonds; at the moment the spread is 100 basis points," the ETF expert points out. With respect to corporate bonds, it is generally recommended to spread one’s investments across industries and countries. “ETFs are perfect in this regard, because the investor acquires an entire bond portfolio with just one trade,” stresses Fehrenbach.
In addition, the ETF expert points out that corporate bonds are often the better choice, particularly in times of rising interest rates. The positive economic climate and the improved business outlook for many companies tend to lead to a decreasing spread – the difference between the yields on corporate and government bonds.
The underlying index contains 40 euro bonds of issuers located in the Eurozone, Switzerland, the UK, Sweden, Norway and Denmark, whose main fields of activity are not in the financial sector. Only senior bonds with a fixed coupon qualify. To additionally limit risk, further measures were enacted. Per issuer a maximum of two bonds is included and the weighting per issuer is limited to 7.5 percent. Only issuers with a rating of at least BBB- are taken into consideration. Generally, the issue of the bond may not be older than three years. The remaining time to maturity is between 1.5 and 10 years.
The ETF fully replicates the index, meaning that the UCITS III directive-conforming investment fund is comprised of the original securities. Currently, 73 percent of the bonds in the fund have a rating of A or better. The countries with the strongest weighting in the fund are the Netherlands (34%), France (23%) and the UK (11%). The current index composition mainly focuses on utilities (28%), telecommunications (17%) and oil & gas (11%). The average remaining time to maturity is slightly above five years with a yield of 3.7 percent. With a total expense ratio (TER) of 0.20 percent, the new fund is one of the lowest-priced ones among corporate bond ETFs worldwide.
State Street appoints Robert Rushe as head of exchange traded products servicing in Ireland
March 22, 2011--State Street Corporation, (NYSE: STT), one of the world's leading providers of financial services to institutional investors, today announced the appointment of Robert Rushe as head of exchange traded products (ETP) servicing in Ireland.
Mr. Rushe (age 34) will lead State Street’s ETP servicing team and will be responsible for the overall ETP product offering for new and existing clients covering exchange traded funds (ETFs), exchange traded notes and exchange traded certificates. He joins State Street from Bank of Ireland Securities Services, where he was a key member of the team responsible for the creation of Ireland’s first ETF product in 2000.
“I am very excited to have the opportunity to join the State Street team. As one of Europe’s largest ETP service providers, State Street is in a unique position to deliver innovative, efficient and robust solutions to our clients globally,” said Rushe.
Mr. Rushe was responsible for the development of Bank of Ireland Securities Services ETF model over the past 10 years. His experience also includes fixed income investments, Shariah funds, emerging markets funds, synthetic products and multicurrency dealing.
Commenting on the appointment, Susan Dargan, chief operations officer for State Street Global Services in Ireland said; “Product innovation is a key ingredient in promoting Ireland’s appeal as a major financial services centre to an increasingly sophisticated international client base. Robert has played a critical role in enhancing the servicing of ETPs and this appointment further strengthens State Street’s credentials in this area.”
