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CFTC.gov Commitments of Traders Reports Update
June 28, 2013--The updated current reports for the week of June 25, 2013 are now available.
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Source: CFTC.gov
New ETF From ALPS Looks to Capture High Yield in International Stocks
ALPS International Sector Dividend Dogs ETF Built To Provide Diversification and Dividend Potential
June 28, 2013--ALPS, a DST Company focused on asset servicing and asset gathering, today announced the launch of the ALPS International Sector Dividend Dogs ETF (NYSE: IDOG).
The new exchange-traded fund, an ALPS Advisors Solution, was designed to track the overall performance of the S-Network International Sector Dividend Dogs Index (IDOGX), a float-adjusted, capitalization-weighted benchmark index of large-cap stocks domiciled in developed markets outside the Americas.
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Source: The Wall Street Journal
Vanguard Emerging Markets Stock Index Fund and ETF Transition to FTSE Index
June 27, 2013--Vanguard announced that the $70 billion Vanguard Emerging Markets Stock Index Fund and its ETF Shares (ticker:VWO), the world's largest emerging markets ETF, will begin seeking to track the FTSE Emerging Index on June 28, 2013.
The Emerging Markets Stock Index Fund tracked the MSCI Emerging Markets Index prior to January. During its six-month transition, the fund tracked a custom benchmark, the FTSE Emerging Transition Index, so that the portfolio management team could implement the transition cost-effectively with minimal market impact and negligible tracking error, as well as to enable shareholders to see the fund's position. As of June 28, the fund will have fully moved from the transition index to the FTSE Emerging Index.
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Source: MarketWire
ETFs under scrutiny in market turbulence
June 27, 2013--Like a tremor that rattles the girders of a gleaming skyscraper, a market sell-off can be the moment that exposes flaws in the plumbing of Wall Street's favourite products.
For exchange traded funds, a $2tn industry that has boomed in recent years, last week’s tumble in asset prices has unearthed possible cracks in the pipework. Commentators are probing beneath the surface to look at how ETFs, which allow “mom and pop” investors instant access to a multitude of assets, hold up when faced with market turbulence.
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Source: FT.com
Solving The Bond ETF Discount Problem
June 27, 2013--Bond exchange-traded funds can be tricky to trade at times. Although these securities trade within a reasonable range of their net-asset value (NAV) most days, there are those periods when the ETF market just doesn't want to cooperate.
Last week was a good example. Here are two ways to solve this problem.
I have been writing about pricing issues with bond ETFs for quite some time, first in The ETF Book and later in articles such as Why We Don’t By Corporate Bond ETFs. Most of the time, there’s nothing wrong with bond ETFs or how they’re priced, as long as you’re not in a big hurry to trade during a big selloff in the market.
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Source: Forbes
Mind the (Expectations) Gap: Demographic Trends and GDP
June 27, 2013--A large body of research in psychology and economics shows that human beings tend to form their expectations by relying on past experiences-especially recent ones.
Malmendier and Nagel (2011), for instance, talk about investors who live through long periods of poor stock market performance and how this experience affects their risk-taking propensities… for life. The most famous example comes from the “Depression Babies,” an entire generation that was scarred for life by the financial and macroeconomic shocks of the Great Depression. Of course the opposite effect also exists: periods of economic ebullience give rise to more intrepid investors, entrepreneurs, and so on.
Those times might feel like a distant past now, but until recently 3–4% growth in real GDP was considered “normal.” So it should come as no surprise that the economic performance of the past few decades has strongly influenced expectations about economic growth. However, when optimistic expectations get detached from reality we risk creating a significant expectations gap—a disconnect between what we take for granted given our recent experiences and what we should anticipate given simple arithmetic.
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Source: Research Affiliates
CFTC's Division of Swap Dealer and Intermediary Oversight Issues Time-Limited No-Action Relief from Certain Swap Trading Relationship Documentation Standards with Foreign Exchange Counterparties
June 27, 2013--The Commodity Futures Trading Commission's Division of Swap Dealer and Intermediary Oversight ("DSIO") today announced the issuance of a no-action letter relating to requirements imposed on Swap Dealers ("SDs") and Major Swap Participants ("MSPs") pursuant to Commission regulation
§23.504 in connection with (i) foreign exchange transactions that are swaps , and (ii) physically-settled foreign exchange forwards and swap agreements that have been exempted from the definition of swap by the Secretary of the U.S. Department of the Treasury.
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Source: CFTC.gov
CFTC's Division of Market Oversight Issues Extension of Time-Limited, No-Action Relief for Swap Dealers and Major Swap Participants from the Reporting Requirements of Part 45 for CDS Clearing-Related Swaps
June 27, 2013--The Commodity Futures Trading Commission's ("Commission") Division of Market Oversight ("Division") today issued a no-action letter providing an extension of time-limited relief to Swap Dealers ("SDs") and Major Swap Participants ("MSPs") from the obligation to report swap data under part 45 of the Commission's regulations for cleared credit default
swaps ("CDS") that are entered into pursuant to a derivatives clearing organization’s ("DCO") rules related to its price submission process for determining end-of-day settlement prices for cleared CDS ("CDS Clearing-Related Swaps").
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Source: CFTC.gov
CFTC's Division of Market Oversight Issues Extension of Time-Limited No-Action Relief Concerning Bespoke or Complex Swaps
June 27, 2013--The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight (DMO) today announced the issuance of a time-limited no-action letter granting relief,
for bespoke or complex swaps, from certain reporting obligations under Parts 43 and 45 of the Commission’s regulations.
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Source: CFTC.gov
Vanguard CIO on benchmark change: Mission complete
June 27, 2013--With Vanguard Emerging Markets Stock Index Fund's transition to the FTSE Emerging Index in June, the shift of 22 Vanguard funds and their ETF Shares to new target benchmarks was brought to a successful close.
We spoke with Tim Buckley, Vanguard's chief investment officer, to get his take on Vanguard's move to benchmark indexes developed by FTSE and the University of Chicago's Center for Research in Security Prices (CRSP).
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Source: Vanguard
