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35% rise in European high net worth sustainable assets, despite crisis: Eurosif
September 8, 2010--The level of sustainable investments in European high net worth individuals’ (HNWIs) portfolios is estimated to have increased significantly since the beginning of the current financial crisis despite a drop in overall wealth assets during the same period, according to research by the European Sustainable Investment Forum (Eurosif).
Eurosif’s latest survey of European wealth managers and family offices, calculates the 2010 European level of sustainably-managed assets to be approximately €729 billion, which would represent an average of 11% of European HNWIs’ portfolios as of December 31, 2009. Eurosif said the figure represented a 35% rise since it
surveyed the market two years ago.
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Source: Responsible Investor
Bond from KTG Agrar AG in Boerse Stuttgart's Bondm segment surpasses expectations
Subscription period for KTG bond closes early due to strong demand
September 8, 2010--From 2 September private investors had the opportunity to subscribe to an SME bond from the Hamburg-based company, KTG Agrar AG, in Boerse Stuttgart's Bondm segment. Strong demand brought the offering to an early close through allocation at 17.00 hours on 6 September with the subscription period lasting only three days.
Many investors obviously wished to benefit from the advantage of subscribing to the bond at the issue price as this is usually lower than the price at which a bond is first quoted on the stock exchange. "The success of this issue shows that we took the right decision in launching the Bondm segment. The strong demand shown by private investors and by small and medium-sized enterprises (SMEs) is a sign that this segment has filled a gap in the market. We are very pleased about this success," said Sabine Traub, Head of Bond Trading at Boerse Stuttgart.
The bond has been fully placed with a total volume of EUR 25 million and will be listed in Boerse Stuttgart's special segment for SMEs, Bondm, from today. Investors can find detailed information about this trading segment and the bonds traded there on Boerse Stuttgart's website. Boerse Stuttgart TV and the Bonds weekly newsletter also provide information about bonds and forthcoming new issues.
Source: Boerse Stuttgart
Amundi lists 15 ETFs on Borsa Italiana
September 8, 2010--Borsa Italiana welcomes 15 new Amundi ETFs in the ETFplus market:
9 in the open-end index fund - class 1 segment
- Amundi ETF ex AAA GOVT BOND EUROMTS -FR0010892190
- Amundi ETF Govt Bond EuroMTS Broad 1-3- FR0010754135
Amundi ETF Govt Bond EuroMTS Broad 7-10-FR0010754184
Amundi ETF Govt Bond EuroMTS Broad 10-15-FR0010754143
Amundi ETF Govt Bond EuroMTS Broad-FR0010754192
Amundi ETF EuroMTS Cash 3 Months -FR0010754200
Amundi ETF Govt Bond EuroMTS Broad 3-5-FR0010754168
Amundi ETF Govt Bond EuroMTS Broad 5-7-FR0010754176
Amundi ETF EONIA -FR0010718841
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Source: Borsa Italiana
Swiss Exchange May Enter Derivatives Clearing as Demand Rises, Zeeb Says
September 7, 2010--SIX Group, the operator of the Swiss stock exchange, is considering clearing derivatives trades as regulators urge banks to make more use of the service, according to Thomas Zeeb, chief executive officer of SIX Securities Group.
“We are looking at whether it makes sense to do derivatives clearing,” Zeeb said in an interview yesterday in Zurich. “Anyone in the infrastructure space who has ambitions on the pan-European level will take a look at it even if only to decide let’s take it off the table. We are all in a competitive space.” SIX Securities encompasses the post-trade businesses of the Swiss bourse.
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Source: Bloomberg
FTSE appoints new Managing Director Luca Filippa, to oversee Italian market
September 7, 2010--FTSE Group (”FTSE”), the award winning global index provider, has appointed Luca Filippa as Managing Director for Italy. The new appointment represents a further step in FTSE’s long term investment in the Italian market, following the launch of the FTSE MIB and of the FTSE Italia series in June 2009, the establishment of the FTSE Milan Office in January 2010 and the launch of further indices earlier this year.
Luca will lead the strategic development of FTSE’s business operations in Italy with responsibility for sales, product development and client services, and will support the technical management and operational quality of FTSE’s Italian indices. As part of our commitment to the Italian market, FTSE is working closely with Borsa Italiana and other market participants, to provide both the Italian market and the global investment community with a range of new and innovative Italian indices, data services and analytical tools.
Donald Keith, Deputy Chief Executive FTSE Group believes “Luca’s appointment is a significant milestone for FTSE and our commitment to the Italian Market. Both his deep knowledge of the Italian market and extensive experience will not only aid investment flows into the market but also benefit the investment community, and increase collaboration with fellow industry participants. We are delighted to have Luca on board”.
Source: FTSE
EU takes stand to boost growth, financial supervision
September 7, 2010--The European Union laid out ambitious goals on Tuesday to strengthen its economy as the European Commission proposed a joint EU-wide bond and ministers approved tighter financial supervision.
European Commission President Jose Manuel Barroso told the EU parliament in Strasbourg that the 27-nation bloc's economic outlook was better today than one year ago thanks to the "determined action" of member states.
But he warned that not all EU states were benefiting from the recovery -- a view shared by economists who have pointed to the struggles of countries battling big deficits and debt such as Greece.
"The recovery is gathering pace, albeit unevenly within the Union. Growth this year will be higher than initially forecast," he said.
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Source: EU Business
Green light to tighter financial oversight
September 7, 2010--EU finance ministers meeting at the Ecofin Council on 7 September backed the establishment of four European financial supervisory bodies, aimed at averting a recurrence of the financial crisis. A provisional deal had been reached with the European Parliament on 2 September.
Under the reform, a European Systemic Risk Board (ESRB), to be located in Frankfurt, will be responsible for the oversight of the financial system within the Union. In the event of a high-level or systemic risk - one that could jeopardise the entire market - it will issue warnings and recommendations for action and monitor their follow-up. For the first five years, the ESRB will be chaired by the President of the European Central Bank, but the issue is to be reviewed after three years.
Three supervisory authorities will be created, for banking, securities and insurance, with their seats in London, Paris and Frankfurt, respectively. They replace the existing supervisory committees, which have had only an advisory role. Working in tandem with a network of national supervisors, the new authorities will be tasked with, inter alia, setting common standards and contributing to a common supervisory culture. Responsibility for day-to-day supervision of individual institutions is to remain with national authorities.
The reform, which is one of the priorities of the Belgian presidency, is subject to approval by the Parliament at its forthcoming plenary session, followed by formal adoption by the Council. The new bodies should be up and running as of 1 January 2011.
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Source: Council of the European Union
HSBC launches HSBC MSCI Pacific ex Japan ETF
September 7, 2010--HSBC has launched its HSBC MSCI Pacific ex Japan exchange traded fund, or ETF, which carries a total expense ratio of 0.4%.
The HSBC MSCI Pacific ex Japan ETF will be listed initially on the London Stock Exchange. Further registrations and cross-listings in Europe are planned over the coming months, said HSBC.
The latest ETF from HSBC offers investors exposure to the performance of the MSCI Pacific ex Japan Index, which represents the equity market performance of the developed markets in the Pacific ex Japan region, namely Australia, Hong Kong, New Zealand, and Singapore.
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Source: iStockanalyst
Preparations for New IT infrastructure
Two new standardized interfaces to be launched in 2011
September 7, 2010-At today’s “Open Day 2010 – Deutsche Börse IT Conference”, Deutsche Börse Systems announced that it will be implementing two new interfaces in the trading systems of the Eurex derivatives exchange and the Xetra cash market in the upcoming year. These are:
a standardized FIX interface for entering orders to facilitate participant access to Eurex and Xetra and
a new interface for netted market data in multicast format.
The development of the two interfaces is part of Deutsche Börse Group’s IT strategy. In the medium term, the Group plans to implement the new high-performance trading infrastructure developed initially for the International Securities Exchange (ISE) in other markets of the Deutsche Börse Group. The new interfaces will enable Eurex and Xetra customers to adapt their own trading applications in good time. The new interfaces will eventually replace the current VALUES API open interfaces in the medium-term. In order to minimize costs for customers, both interfaces will be launched as part of the annual system releases during the course of 2011. Alongside this, Deutsche Börse plans to considerably simplify its existing access structure for customers and plans to offer a web-based solution in the future.
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Source: Deutsche Börse
DB Global Equity Index & ETF Research: European Weekly ETP Market Review:Do ETF trackers track? European equity ETF tracking error under the microscope
September 6, 2010-When investors purchase index products such as ETFs, they have a very set and, seemingly, simple goal in mind: they expect them to track their stated benchmark, as closely as possible. This very specific investor expectation often raises the product evaluation bar and can even create undue expectations. Therefore, analyzing and understanding the dynamics that drive this very fine tracking balance is close to many investors’ heart.
Tracking error (TE) is perhaps the most popular measure of how well an ETF is performing against its benchmark. And while less TE is generally better than more TE, it is important to consider that mistracking can come not only in the form of underperformance but also in the form of outperformance. [Relative to an ETF’s benchmark]. Thus, while it is important to measure TE, it is also critical to understand its sources.
The most evident and quantifiable source of mistracking comes from management fees but that information is typically readily available and therefore easier to evaluate. Hence, it is more important to look beneath the surface, decompose an ETFs return stream and detect other possible sources of mistracking as well as resultant risks and benefits. Such information can enable investors to make much more effective beta investment decisions as well as give them a more insightful perspective in how to evaluate an ETF product.
* Benchmark underperformance is more immediately accepted as an index product flaw, however, our study has revealed that outperformance can also disguise information which is equally important to consider. A set of ancillary investment activities, which always fall within an ETF’s investment mandate, as well as market driven events, can both benefit or potentially expose an ETF to risks. * Trackers are meant to track. Do they track? What drives ETF TE? How common of a problem is mistracking? These are only a few questions which are tackled in this report. To answer them, we have put European domiciled equity ETF TE under the microscope by looking at 59 ETFs, representing approximately 40% of the European equity ETF market as of August 20th 2010. We have chosen to look at equity ETFs as their benchmarks are typically subject to higher volatility [than fixed income ETFs] and hence studying them can reveal more information about TE and its sources. To optimize our selection sample we have picked both physically as well as synthetic replicated ETFs, funds by 12 different providers as well as ETFs tracking both developing and emerging market benchmarks. A full list of assumptions pertaining to our study can be found in the ‘Study Assumptions’ section of this report. A full list of ETFs included in the study can be found in Appendix A.
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