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McGraw-Hill and CME Group to Partner in Index Services Business
Will Contribute Complementary S&P Indices and Dow Jones Indexes Businesses into Joint Venture
S&P/Dow Jones Indices will be a Leading Global Index Company Providing New Products to Clients and Generating Growth for Shareholders of Both Companies
November 4, 2011--McGraw-Hill, one of the world's foremost financial information companies and owner of S&P Indices, and CME Group (NASDAQ: CME), the world's leading and most diverse derivatives marketplace and 90-percent owner of the CME Group/Dow Jones joint venture, announced today an agreement to establish a new joint venture in the rapidly growing index business.
Under the terms of the agreement, which has been approved by the Boards of both companies, McGraw-Hill will contribute its S&P Indices business and the CME Group/Dow Jones joint venture will contribute the Dow Jones Indexes business to create S&P/Dow Jones Indices, a global leader in index services with annual revenue of more than $400 million. Approximately $6 trillion in assets are benchmarked against these leading indices.
McGraw-Hill will own 73 percent of S&P/Dow Jones Indices, CME Group will own 24.4 percent through its affiliates, and Dow Jones will own 2.6 percent. S&P/Dow Jones Indices is expected to be operational in the first half of 2012, subject to regulatory approval and customary closing conditions. The new company will become part of the new McGraw-Hill Markets company following the separation of McGraw-Hill into two public companies, as announced on September 12, 2011.
As part of the new joint venture, S&P/Dow Jones Indices will enter into a new license agreement whereby CME Group will pay S&P Indices a share of the profits of CME Group's equity product complex, which is their trading and clearing business for futures, swaps and options on futures. In addition, the new license agreement expands the products covered under the license to include swaps and extends CME Group's existing exclusive rights (currently in place through December 31, 2017) to the E-mini and other S&P indexed futures.
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Source: McGraw-Hill
McGraw-Hill and CME Group to Partner in Index Services Business
Will Contribute Complementary S&P Indices and Dow Jones Indexes Businesses into Joint Venture S&P/Dow Jones Indices will be a Leading Global Index Company Providing New Products to Clients and Generating Growth for Shareholders of Both Companies
November 4, 2011–McGraw-Hill (NYSE: MHP), one of the world’s foremost financial information companies and owner of S&P Indices, and CME Group (NASDAQ: CME), the world’s leading and most diverse derivatives marketplace and 90-percent owner of the CME Group/Dow Jones joint venture that owns Dow Jones Indexes, announced today an agreement to establish a new joint venture in the rapidly growing index business.
Under the terms of the agreement, which has been approved by the Boards of both companies, McGraw-Hill will contribute its S&P Indices business and the CME Group /Dow Jones joint venture will contribute the Dow Jones Indexes business to create S&P/Dow Jones Indices, a global leader in index services with annual revenue of more than $400 million. Approximately $6 trillion in assets are benchmarked against these leading indices.
McGraw-Hill will own 73 percent of S&P/Dow Jones Indices, CME Group will own 24.4 percent through its affiliates, and Dow Jones will own 2.6 percent. S&P/Dow Jones Indices is expected to be operational in the first half of 2012, subject to regulatory approval and customary closing conditions. The new company will become part of the new McGraw-Hill Markets company following the separation of McGraw-Hill into two public companies, as announced on September 12, 2011.
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Source: Dow Jones Indexes
S&P GSCI to Raise Brent, Lower WTI Weightings in Index for 2012
November 4, 2011--The Standard & Poor’s GSCI Commodity Index will raise the weighting of Brent crude in 2012 as it reduces that of West Texas Intermediate.
The index weight of Brent crude traded on the ICE Futures Europe exchange will increase to 17.35 percent from 15.93 percent as the share of WTI traded on the New York Mercantile Exchange decreases to 30.25 percent from 32.59 percent, according to a company statement dated yesterday.
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Source: Bloomberg Businessweek
U.S. Department of the Treasury Economic Statistics - Monitoring the Economy Update
November 3, 2011--The Office of Economic Policy monitors key economic indicators to produce the following summary tables of monthly and quarterly U.S. economic statistics.
view the U.S. ECONOMIC STATISTICS - MONTHLY DATA
view the US Economic Data - Quarterly
Source: US Department of the Treasury
Congressmen agitate for US transaction tax
November 3, 2011--Two US Congressional Democrats have announced they will again present legislation to introduce a US transaction tax modelled on the European transaction tax that is already set to take effect from 2014.
Senator Tom Harkin and Congressman Peter DeFazio said they plan to introduce legislation that will impose a 3 basis point tax on financial transactions, one third the European rate, reported Bloomberg.
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Source: Financial Standard
Morgan Stanley Exchange-Traded Funds Quarterly Cash Flows Report-ETFs Exhibited Net Inflows of $19.3 Billion in 3Q11
November 3, 2011--There have been 205 new ETFs listed in the US
so far in 2011, of which 35 were issued in the third quarter. So far this year, nine ETFs have been liquidated, resulting in net new issuance of
196 ETFs. As of October 28, 2011, there were 34 issuers with 1,163 ETFs listed in the US.
Net inflows into US-listed ETFs were $19.3 billion during the third quarter of 2011. This number is below the average quarterly net cash
inflows of $35.3 billion over the past three years and marks the lowest quarterly net inflows since the first
quarter of 2010 (net cash inflows of $7.7 billion).
The largest net cash inflows this past quarter went into fixed income and leveraged/inverse ETFs. These asset classes had net cash inflows of $11.8 billion and $5.0 billion, respectively, in the third quarter of 2011. ETFs providing exposure to US sectors and industries as well as emerging market equities had the largest net cash outflows at $4.8 and $3.2 billion, respectively, in the third quarter. Through the first three quarters of 2011, fixed income ETFs had the highest net cash inflows at $28.0 billion followed by international developed market equity ETFs at $15.4 billion.
US ETF industry assets of $1.1 trillion are ~9% higher than their level at the end of 2010. Despite the growth of the ETF market, it remains concentrated with three providers and 20 ETFs accounting for almost 78% and 48% of industry assets, respectively.
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Source: Morgan Stanley
Russell Investments and Axioma Expand Factor Index Series
Russell's family of indexes, designed to track and manage risk exposure, now includes developed international markets.
November 3, 2011--Russell Investments, a leader and innovator in indexes, and Axioma, Inc., a leading provider of advanced tools for portfolio optimization and risk analysis, have extended their collaboration to include developed market ex-U.S. factor based indexes.
Through five new Russell-Axioma factor indexes, international investors will now be able to better track and manage exposure to a range of investment risk factors within their portfolios of stocks outside the United States. The new indexes employ the same Russell rules-based index methodology as the U.S. factor based indexes, and are built from the underlying constituents of the Russell Developed ex-U.S. Large Cap Index.
The additional indexes that have been added to the series are:
Russell-Axioma Developed ex-U.S. Large Cap Low Volatility Index
Russell-Axioma Developed ex-U.S. Low Beta Index
Russell-Axioma Developed ex-U.S. High Momentum Index
Russell-Axioma Developed ex-U.S. High Volatility Index
Russell-Axioma Developed ex-U.S. High Beta Index
"Our clients are continually asking us for additional and more sophisticated tools to help manage risk exposure in this challenging investment environment, particularly with respect to international markets," said Rolf Agather, global director of research and innovation for Russell Indexes. "Our continued partnership with Axioma, a leader in the field of risk factor analysis, tools and research, helps ensure that our expanding family of indexes anticipates and responds to changing investors needs as the markets change and evolve."
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Source: Russell Investments
Russell launches three international equity "factor" ETFs
Comprehensive series of factor ETFs now features 13 U.S. and international options
November 3, 2011--Russell Investments launched its first international equity factor exchange-traded funds (ETFs) today, designed to provide investors with focused exposure to fundamental risk factors within their portfolio's international equity allocation.
The three new factor ETFs, which listed today on NYSE Arca, focus on some of the same factors as the existing set of 10 domestic factor ETFs: low beta, low volatility and high momentum.
"Russell now offers a comprehensive global family of factor-based ETFs, providing investors with a readily accessible way to gain exposure to low volatility, low beta and high momentum factors within a portfolio that covers U.S. large cap, U.S. small cap and ex-U.S. large cap markets," said James Polisson, managing director of Russell's global ETF business. "The addition of these international equity factor ETFs is particularly timely as investors may be starting to look toward year-end portfolio rebalancing."
The following chart describes the three new Russell Developed ex-U.S. factor ETFs, which offer exposure to low beta, low volatility and high momentum stocks in 24 developed countries including Canada. Based on Russell research, these three risk factors have shown strong influences on portfolio returns:
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Source: Russell ETFs
Oral Testimony before the U.S. Senate Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations, Washington, DC
November 3, 2011--Good morning Chairman Levin, Ranking Member Coburn and members of the Subcommittee. I thank you for inviting me to today’s hearing on the changing nature of the derivatives market and on position limits.
The derivatives markets have changed significantly since the CFTC opened its doors in 1975.
First, the swaps market emerged in the 1980’s and now is seven times the size of the futures market.
Second, instead of being traded in trading pits, more than 80 percent of futures are traded electronically.
Third, while the futures market has always been where hedgers and speculators meet, a significant majority of the market is made up of swap dealers, hedge funds and other financial traders.
Fourth, the vast majority of trading volume is day trading or trading in calendar spreads.
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Source: CFTC.gov
Standard & Poor's Announces Changes In The S&P/TSX Venture Indices
November 3, 2011--Standard & Poor's will make the following changes in the S&P/TSX Venture Indices:
The Toronto Stock Exchange announced today in the Daily Bulletin that the shares of Aston Hill Financial Inc. (TSXVN:AHF) will graduate to trade on TSX at the open of trading on Monday, November 7, 2011.
The ticker symbol will remain "AHF" and the CUSIP number will remain 04623R 10 9. The company will be removed from the S&P/TSX Venture Composite Index after the close of trading on Friday, November 4, 2011.
Aston Hill is also a constituent of the S&P/TSX Venture Select Index. The company will be removed from this index effective after the close of Thursday, November 10, 2011, at which time it will be listed on TSX.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
