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ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 04-Mar-2011
March 9, 2011--For the week ending 04 March 2011, there were US$67.7 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in basic resources with US$49.8 Mn followed by industrial goods and services with US$48.0 Mn net outflows while oil and gas experienced net inflows of US$64.3 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$1,408.8 Mn net inflows. Banks has seen the largest net inflows with US$561.1 Mn, followed by oil and gas with US$402.8 Mn net inflows while chemicals experienced the largest net outflows with US$109.0 Mn.
As of 04 March 2011, there is US$11.7 Bn AUM invested in the STOXX sector ETFs which is almost double the US$6.8 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 17 out of 19 sectors.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
ETF Securities launches global dividend fund
March 9, 2011--ETF Securities has launched a global dividend exchange traded fund (ETF) in London, providing exposure to 100 leading dividend-paying companies across the globe.
The ETFX Dow Jones Global Select Dividend Fund invests in top dividend-paying companies across 10 sectors and up to 25 countries. The fund, which is part of ETF Securities’ equity ETF platform ETF Exchange, will track the Dow Jones Global Select Dividend Index. As a net total return index, all dividends will be automatically reinvested.
The average dividend yield is 5.74 per cent, which has been calculated monthly since September 2007. At the end of February 2011, the monthly dividend yield was 5.25 per cent.
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Source: Money Observer
Societe Generale launches a new generation of Actively Managed Trackers on the LSE
March 9, 2011--Societe Generale has announced the launch of a new generation of ‘Actively Managed
Trackers’ (AMT) on the London Stock Exchange. The bank can now offer Asset Managers the opportunity to deliver an actively-managed, diversified portfolio in a transparent exchange
traded product with a low management cost.
Asset Managers in partnership with Societe Generale can offer their clients an innovative product that benefits from active management, a lower minimum investment size and benefits from on-exchange liquidity. Using a securitised derivative wrapper rather than an open-ended
fund structure reduces the cost of creating and maintaining the product, thus allowing for a lower minimum trading size.
The aim of the AMT is to mirror the performance of a selection of underlying assets, so working like a classic tracker. The key difference, however, is that a “Weighting Manager Agreement” enables the Asset Manager (who will be regulated by the FSA and permitted to give investment advice) to change the weightings of each asset in the portfolio on a regular basis.
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Source: Societe Generale
SIX Swiss Exchange Enhances Its Transparency Tool, Equity Liquidity Matrix, Now Covering All SPI Securities
The Improved Featured Service Further Increases Market Oversight For Investors And Market Participants
March 8, 2011--SIX Swiss Exchange expands its transparency tool, Equity Liquidity Matrix, to cover all SPI securities. Designed for investors trading Swiss Blue Chips as well as Mid & Small Cap securities, the free web-based tool highlights the quality of the order books of SIX Swiss Exchange.
As the reference market for Swiss securities, SIX Swiss Exchange is assuring liquidity across its entire spectrum of equities in order to maintain a transparent, reliable and efficient price finding mechanism. By enlarging the Equity Liquidity Matrix (ELM) service to the Mid & Small Cap securities, SIX Swiss Exchange further increases market transparency as well as public awareness of the negative effects of market fragmentation.
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Source: SIX Swiss Exchange
MEPs call for the introduction of a tax on financial transactions
March 8, 2011--The EU should promote the introduction of a financial transaction tax, even if it is alone in doing so "as a first step", says Parliament in a resolution on innovative financing voted in plenary on Tuesday. A second resolution, also voted in plenary on Tuesday, calls for more EU tax-related assistance and clamp downs on tax evasion and tax fraud to boost revenue and efficiency in the developing countries.
Together, the Economic Affairs Committee resolution on "innovative financing", and the Development Committee one on "tax and development" set out Parliament's ideas on how best to generate new revenues, reform tax governance and maximise revenue from traditional sources.
The innovative financing resolution, drafted by Anni Podimata (S&D, GR), argues that the tools proposed can yield a "double dividend" by not only generating more funds, but also making the financial sector safer and society greener.
The tax and development resolution, drafted by Development Committee Chair Eva Joly (Greens/EFA, FR), says that EU and developing countries should seek to boost their tax revenues by combating tax evasion and harmful tax practices. This, it says, will not only reduce poverty but also eventually lead to a "governance dividend".
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Source: European Parliament
New Lyxor ETF launched on Xetra
March 8. 2011--A new exchange-traded fund (ETF) issued by Lyxor has been tradable on Xetra since Tuesday.
ETF name: Lyxor ETF iBoxx € Liquid High Yield 30
Asset class: bond index ETF
ISIN: FR0010975771
Total expense ratio: 0.45 percent
Distribution policy: non-distributing
Benchmark: Markit iBoxx EUR Liquid High Yield 30
Lyxor ETF iBoxx € Liquid High Yield 30 enables investors to participate in the performance of 30 corporate bonds denominated in euros with a rating below invest grade. The selected bonds are strong performers with terms longer than 15 months. The underlying index contains solely bonds with an outstanding volume of a minimum of €500 million.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 798 exchange-listed ETFs, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of around €13 billion, makes Xetra Europe’s leading trading venue for ETFs.
Source: Deutsche Börse
EDHEC-Risk Institute Warns the European Parliament of the Dangers of Banning Naked Sales of Credit Default Swaps
March 8, 2011--In an open letter of March 8, 2011 addressed to the Chair of the Economic and Monetary Affairs Committee of the European Parliament, Sharon Bowles, and Pascal Canfin, the Committee’s Rapporteur on the draft EU regulation on short selling and credit default swaps, EDHEC-Risk Institute has warned of the dangers of prohibiting "naked" sales of sovereign credit default swaps.
Besides the fact that the lack of convergence on these issues with the US authorities leaves little hope of the measures being effective, EDHEC-Risk Institute thinks that this ban would pose numerous problems and run up against legal and practical obstacles that would make it inapplicable or even counterproductive:
It will be impossible for intermediaries and ultimately for regulators to verify investors’ holdings of the securities representative of the risk the credit default swaps are assumed to cover.
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Source: EDHEC-Risk Institute
Euro-MPs back tax on financial transactions in vote
March 8, 2011-European lawmakers backed Tuesday the introduction of a tax on financial transactions they said could raise 200 billion euros per year to finance EU projects.
Euro MPs voted 360 for and 299 against a call for the European Union to encourage such a tax at a global level, after German Chancellor Angela Merkel said finance ministers from the 17-nation eurozone should examine ways to implement one.
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Source: EUbusiness
STOXX announces new composition of Sustainability, Select Dividend, Style and Grand Prix Indices
STOXX ANNOUNCES NEW COMPOSITION OF SUSTAINABILITY, SELECT DIVIDEND, STYLE AND GRAND PRIX INDICES
Results of the Review to be Effective on March 21, 2011
March 7, 2011--STOXX Limited, the market-moving provider of innovative, substantial and global index concepts, today announced the results of the annual review of the STOXX Select Dividend Index series and the STOXX Global Grand Prix Index; as well as the result of the semi-annual review of the STOXX TMI Growth and STOXX TMI Value indices, its respective large, mid- and small sub-indices and the respective indices for the euro zone.
Furthermore, the results of an extraordinary review of the STOXX Sustainability Indices are being announced as Bank Sarasin & Co. Ltd. took over the research and analysis for the indices earlier this year. All changes will be effective on March 21, 2011.
STOXX Sustainability Indices
The STOXX Sustainability Indices have been reviewed extraordinarily as Bank Sarasin took over the research and analysis of the index components earlier this year. While the methodology of the indices remains unchanged, components are now selected from the STOXX Europe 600 Index according to Bank Sarasin’s rating. In order to be included in the STOXX Sustainability Indices, a company must reach a “positive overall sustainability rating” according to Bank Sarasin’s Sustainability Matrix. The rating is composed of “industry rating” and “company rating.”
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Source: STOXX
Eurex KOSPI Product hits important milestone
More than 500,000 contracts traded since the launch of the Eurex/KRX Link
March 7, 2011--The Eurex KOSPI Product exceeded 500,000 traded contracts last Friday for the first time since its launch on 30 August 2010. Average daily volume has been increasing steadily, reaching more than 11,000 contracts in March 2011. On 18 January, Eurex achieved a new daily record of more than 64,000 traded contracts.
“Our Eurex KOSPI Product has been very successful since its introduction,” said Michael Peters, Eurex Executive Board member. “This is due to our close partnership with the Korea Exchange to offer our customers access to the most widely traded index derivative contract in the world. Our participants do not only trade via the order book but also use our block trading functionality, which allows members to place OTC transactions directly and efficiently into the Eurex clearing system.” Currently, block trades of this product can only be executed on Eurex.
“The Eurex KOSPI Product is a linked derivative product that provides more convenient access to KOSPI 200 Options for European customers,” said In-Soo Kim, KRX executive director. “This milestone reflects the high acceptance of the Eurex KOSPI Product as an investment tool for global investors. KRX and Eurex will continue to work closely together with market participants to develop ways to further increase liquidity in the Eurex KOSPI Product.”
Volumes are expected to rise as KRX and Eurex further develop the after-hours market for the world’s most widely traded derivatives contract. Bid-ask spreads for the Eurex KOSPI Product have narrowed considerably, and the number of active end-customers as well as Eurex and KRX members continues to expand rapidly. Currently, eleven KRX and Eurex members are active in the Eurex KOSPI Product, among them two market makers. There are 12 additional KRX and Eurex members who are preparing to participate in the Eurex/KRX Link.
The Eurex KOSPI Product is a daily futures contract based on the KOSPI 200 options available on the Korea Exchange (KRX). The futures contracts expire at the end of each trading day and any open positions are transferred to KRX to establish a position in the KOPSI 200 option. This product cooperation between Eurex and KRX enables market participants to trade KOSPI 200 options during European and North American trading hours.
Source: Eurex
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