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ETFs Surge with Schwab Investors
Exchange-traded funds are continuing to gain traction among Charles Schwab’s clients.
February 14, 2011--ETF assets held by the firm’s clients climbed 34% in 2010, compared with 28% growth in the ETF industry overall, according to Schwab. The brokerage’s clients hold more than $111 billion in ETF assets.
ETFs are “still breaking through among retail investors,” according to Beth Flynn, vice president of ETF platform management for Schwab. Retail investors accounted for 37% of ETF assets at Schwab as of December, and their ETF assets grew 61% in 2010.
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Source: Financial Planning
Pimco files with the SEC
February 14, 2011-Pimco has filed a post-effective amendment, registration statement with the SEC for
SHORT DURATION
PIMCO Enhanced Short
Maturity Strategy Fund -MINT NYSE Arca
PIMCO Government Limited Maturity Strategy Fund-GOVY
PIMCO Prime Limited Maturity Strategy Fund -PPRM
TAX-EXEMPT MUNICIPAL
PIMCO Short-Term Municipal Bond Strategy Fund-
SMMU NYSE Arca
TAXABLE MUNICIPAL
PIMCO Build America Bond Strategy Fund-BABZ NYSE Arca
TAX-EXEMPT MUNICIPAL
PIMCO Short-Term Municipal
Bond Strategy Fund-SMMU NYSE Arca
PIMCO Intermediate Municipal Bond Strategy Fund-MUNI NYSE Arca
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Source: SEC.gov
S&P Launches New Series of Indices Combining Core S&P Asset Classes
February 11, 2011--Standard & Poor's, the world's leading index provider, announced today that it has launched a new series of indices intended for investors with differing risk-reward profiles. The S&P Balanced Equity and Bond Indices combine investable S&P measures of the core asset classes of equity and fixed income, with US Treasury pricing provided exclusively by BGCantor Market Data, L.P., resulting in regularly rebalanced multi-asset indices.
The S&P Balanced Equity and Bond Indices are constructed with varying risk-reward profiles allowing investors a choice in the amount of risk embedded in the combined portfolio. Each index in the Series is allocated a pre-defined weight of equity exposure, as represented by the S&P 500 Total Return Index, and bond exposure, as represented by the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index.
The indices currently included in the series are as follows:
S&P Balanced Equity and Bond – Conservative Index. Long position in the S&P 500 Total Return Index (25% weight), and long position in the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index (75% weight).
S&P Balanced Equity and Bond – Moderate Index. Long position in the S&P 500 Total Return Index (50% weight), and long position in the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index (50% weight).
S&P Balanced Equity and Bond – Growth Index. Long position in the S&P 500 Total Return Index (75% weight), and long position in the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index (25% weight).
"The diversification benefit of holding a portfolio of assets with low correlation is well documented," says Michael Kondas, Associate Director of Fixed Income Indices at S&P Indices. "The launch of these new indices allows investors to potentially take advantage of the historically slight correlation in the returns of U.S. equities and U.S. Treasuries."
All of the indices included in the S&P Balanced Equity and Bond Index Series are rebalanced quarterly. On the last trading day of February, May, August, and November, the weights of bond and equity exposure are returned to the pre-defined levels for each index in the series.
For more information, please visit: www.standardandpoors.com/indices.
Source: S&P Indices
Morgan Stanley Report-ETF Tracking Error
February 11, 2011--Tracking error declined across all market segments
and virtually all providers for US-listed ETFs in 2010 and averaged 74 bps. We define tracking error
as the difference in total return between an ETF’s net asset value (NAV) and its underlying index.
In our view, the most common sources of tracking error include fees and expenses, portfolio optimization, and
index changes. Additionally, compliance with IRS/SEC diversification requirements can lead to extreme
tracking error for select ETFs as they may be forced into material weighting and holding deviations from their
stated benchmarks.
We found a narrower range and magnitude of tracking error in 2010 versus 2009. In 2010, the range of tracking error fell 1,125 bps to 584 bps and 67.7% of ETFs exhibited lower tracking error year-on-year with an average decline of 88 bps. In addition, the percentage of ETFs with tracking error greater than 100 bps decreased from 37.1% in 2009 to 22.0% in 2010. Conversely, the percentage of ETFs with tracking error less than or equal to 25 bps increased from 22.6% to 26.4%.
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Source: ETF Research-Morgan Stanley
CFTC.gov Commitments of Traders Reports Update
February 11, 2011-The current reports for the week of February 8, 2011 are now available.
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Source: CFTC.gov
Northern Trust hs filed with the SEC
February 11, 2011--Northern Trust has filed an applicatiom for exemptive relief with the SEC.
view filing
Source: SEC.gov
Increased Treasury yields and fears over inflation lift dollar
February 11, 2011--The dollar advanced this week as raised US Treasury yields, worries over emerging-market inflation and continued turmoil in Egypt boosted the US currency.
Analysts said the rise in US Treasury yields – the yield on 10-year Treasuries hit its highest level since April – reflected rising optimism over the US economy
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Source: FT.com
2011 Outlook: U.S. Leveraged Finance Sector Profiles
February 10, 2011--Rating Outlook
Improving Credit Fundamentals:
Fitch Ratings anticipates credit profile improvements broadly across corporate sectors and rating categories. Fitch expects that modest top line growth and continued cost containment should support moderate margin expansion
in 2011.
Expanding EBITDA and steady debt levels should continue to drive leverage
down even as more FCF is likely to be dedicated toward shareholder friendly actions. Liquidity is expected to remain healthy as most companies addressed their near term
maturities in recent years.
Low High-Yield Bond Default Rate: As a result, Fitch expects more upgrades than downgrades in 2011. The HY default rate is expected to remain well below historical averages, in the 1.5%?2.0% range for the year. Fitch recognizes the concentration of several very large ‘CCC’ rated issuers has the potential to influence the default rate in 2011.
Favorable Market Supply/Demand Dynamics: The benign credit environment and low interest rates continue to support significant issuance activity. While more bond and loan issuance will likely be used for dividend deals and acquisitions, much of the issuance will predominantly be recycled into refinancing activity as issuers attempt to redistribute their maturities beyond the concentrated refinancing cliff.
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Source: Fitch Ratings
ProShares Launches First Inverse TIPS ETF
Expands popular lineup of geared Treasury ETFs
February 10, 2011-- ProShares, a premier provider of alternative exchange traded funds (ETFs), today announced the launch of the first ETF that provides inverse exposure to U.S. Treasury Inflation-Protected Securities (TIPS).
The ProShares UltraShort TIPS (NYSEArca:TPS - News) seeks to provide -2x of the daily return of the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L), before fees, expenses and interest income. The ETF lists on NYSE Arca today.
“Fueled by expectations of rising long-term interest rates, our inverse Treasury ProShares have garnered more than $7 billion since launching less than three years ago,” said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares’ investment advisor. “Our new fund, the first inverse TIPS ETF, is a new tool for investors considering hedging against or seeking to benefit from declines in TIPS prices.”
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Source: ProShares
US regulators set to miss Dodd-Frank deadline
February 10, 2011--US regulators will miss a July deadline set by Dodd-Frank legislation for some of the rules on newly policed swaps markets, the head of the main derivatives regulator has said.
Gary Gensler, chairman of the Commodity Futures Trading Commission, said the regulator was still working towards the deadline.
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Source: FT.com
