Global ETF News Older than One Year
Economic danger lurks in China's shadow banks
The rescue puts off the immediate threat but raises the stakes, writes Simon Rabinovitch
January 31, 2014--Of all the economic dangers to flare up over the past week, the most unsettling was at first glance also the most esoteric: the near default of a high-yield loan product held by a few hundred small-time Chinese investors.
Set against the turmoil in other emerging markets -steep currency falls in Turkey and South Africa that prompted their central banks to raise interest rates, stubbornly high inflation in India and a collapsing currency in Argentina...
Source: FT.com
SPDR gold ETF sees more purchases but still too early to see trend
For the second time in the last fortnight, the SPDR gold ETF saw an increase in gold purchases. We need evidence of move from sales to purchases for a while, before it can be confirmed as a trend change.
January 30, 2014--In the markets, the New York gold price rose yesterday to $1, 269.80 from $1, 254.10 at the close on Wednesday. Asia took it back down to $1, 259.00 ahead of the opening in London. London took it down to $1, 258.20 ahead of the Fix.
The dollar traded stronger at $1.3600 down 0.64 of a cent. It Fixed at $1, 254.00 down $0.75 on Wednesday. In the euro, it Fixed at &euro922.194 up &euro4.308 reflecting a stronger dollar which stood at $1.3598. Ahead of the opening in New York gold stood at $1, 254.40 and in the euro at &euro921.84.
Source: MineWeb
S&P Emerging Markets Domestic Demand Index Launched by S&P Dow Jones Indices
January 30, 2014--S&P Dow Jones Indices today announced the launch of the S&P Emerging Markets Domestic Demand Index which is designed to measure the performance of companies that capture a major engine of growth within the emerging markets- domestic demand.
To qualify for membership in the S&P Emerging Markets Domestic Demand Index, a stock must be a publicly traded company domiciled and incorporated in the following emerging market countries: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Thailand, or Turkey, and be listed on the primary stock exchange of its respective country.
Source: S&P Dow Jones Indices
NASDAQ OMX Launches Integrated Pre- and Post-Trade Risk System
January 29, 2014-Nasdaq now has integrated its pre- and post-trade risk management into a single platform.
The platform, dubbed TradeGuard, has bundled the multiple risk management services into a single system making it easier for the buyside to use.
TradeGuard is a full-service risk management suite that allows customers to pick and choose from a broad product suite for a range of trade support, from building a custom risk solution to simply filling in gaps in a current solution. In addition to the current enterprise and Nasdaq OMX exchange risk tools available, the new suite also features monitoring for new markets and asset classes, improved gateways, and supplemental risk monitoring systems.
Source: Securities Technology Monitor
IOSCO Publishes Recommendations Regarding the Protection of Client Assets
January 29, 2014--The International Organization of Securities Commissions (IOSCO) today published the final report on Recommendations Regarding the Protection of Client Assets, which seeks to help regulators improve the supervision of intermediaries holding client assets.
Events such as the Lehman Brothers and MF Global insolvencies have placed client asset protection regimes in the spotlight. This is the result of investors trying to better understand the potential implications of placing their assets with particular intermediaries and in certain jurisdictions. Regulators also have been seeking to address risks to client assets and how to transfer or return client assets in default, resolution or insolvency scenarios.
Source: IOSCO
BMO Financial Group to Acquire F&C Asset Management plc
Excellent strategic, financial and cultural fit
January 28, 2014--F&C is a diversified U.K.-based investment manager with a strong brand and almost 150-year history
Consistent with BMO's stated intention of growing its wealth management business and demonstrates BMO's commitment to the asset management business
BMO Global Asset Management's scale, product set and distribution capabilities will be enhanced; pro forma combined AUM of F&C and BMO Global Asset Management is approximately US$2691 billion (£162 billion)
Complementary distribution and limited product overlap expected to drive future revenue growth
The acquisition, valued at C$1.3 billion (£708 million), is modestly accretive2 to earnings per share in the first year, and has an internal rate of return of approximately 15%
Source: BMO Financial Group
Deep Capacity Can Be a Benefit to Index-Based Investing: The Case of European Small Caps
January 28, 2014--Until fairly recently, investors relied principally on actively managed mutual funds to gain exposure to the markets-especially for small-cap options around the world, where many believe that opportunities are ripe for active managers to add value.
Small-cap stocks, generally speaking, do not garner the same level of analyst coverage, and many believe informational inefficiencies provide richer opportunity sets for stock pickers to potentially outperform index benchmarks. After a strong performance during 2013, many have set their sights on European small caps1 in particular, and significant levels of assets have flowed into Europe (as Zach discussed in this prior blog post). Index-Based Strategies Offer a New Option Although Europe is an important focus for developed international investors, there are limited choices available to those interested in targeting exposure to European small-cap companies. Looking at the U.S.-listed mutual funds and exchange-traded funds (ETFs) in Morningstar’s Europe Stock category, as of December 31, 2013, there was only one ETF and three mutual funds specifically focused on small caps.2
See more at: http://www.wisdomtree.com/blog/index.php/deep-capacity-can-be-a-benefit-to-index-based-investing-the-case-of-european-small-caps/#sthash.uVak8WgV.dpuf
Source: WisdomTree
ETFS Precious Metals Weekly-Gold Price Rallies as Investors Flee Emerging Markets
January 27, 2014--The gold price rallied for the fifth straight week as investors search for hedges against further emerging market volatility. Gold was the best performing precious metal last week as markets shifted to risk-off mode, sparked by a weaker-than-expected January China PMI, concerns about a potential default in China on a private wealth investment
product and Argentina's currency devaluation.
The gold price rose 1.4% last week for a year-to-date gain of 5.3%, surpassed only by the 6.3% increase in the platinum price. Platinum miners in South Africa go on strike, driving price higher. Platinum miners belonging to the South African Association of Mineworkers and Construction Union (AMCU) went on strike on Thursday, seeking a doubling of entry-level wages. Both platinum and palladium prices have performed well early in 2014 on concerns about the potential for further supply disruptions in South Africa – the source of over 70% of the worlds' platinum mine output. The continuous threat of strike action in South Africa highlights the uncertainty over consistent supply. Accordingly, we remain bullish on platinum and palladium prices in 2014, given their gearing into the global industrial recovery and large and growing supply/demand deficits
Source: ETF Securities
FTSE aims to continue its evolution with environmental sector
January 27, 2014--The FTSE Group is looking at ways to recognise new environmental industries in its system of classifying sectors.
Typically, it takes 10 or more companies in a new area of activity for the FTSE to begin the gradual process of changing a sectoral classification, and there have not been significant changes for a couple of years.
Source: FT.com
Global ETF AUM to surpass hedge fund industry in 18 months
While growth rates will be highest in Asia and lowest in the more mature US market, the growth drivers will be the same across all markets- foreign currency share classes, fund of fund ETFs, new emerging market funds and commodity ETFs.
ETF industry forecast to grow at 15-30% annually over the next five years
Most respondents see US$50m or US$100m as minimum fund size for success
Top three to maintain or grow their market share
view the Global ETF Survey-A new era of growth
and innovation
Source: Ernst & Young
January 27, 2014--The exchange traded funds (ETF) industry could surpass the hedge fund industry in assets under management (AUM) in the next 12-18 months according to EY's Global ETF Survey.
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