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Minutes of the Federal Open Market Committee June 19-20, 2012
July 11, 2012--The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on June 19-20, 2012. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the June 19-20, 2012 meeting is also included as an addendum to these minutes.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. Summaries of economic projections are released on an approximately quarterly schedule. The descriptions of economic and financial conditions contained in these minutes and in the Summary of Economic Projections are based solely on the information that was available to the Committee at the time of the meeting.
view the Minutes of the Federal Open Market Committee-June 19–20, 2012
Source: FRB
BMO Financial Group's ETF Business Marks Third Anniversary by Surpassing $6 Billion in Assets Under Management
-Assets under management have increased more than 60 per cent in the first half of 2012-First introduced in June 2009, BMO's ETF line-up has grown to 44 funds, including several industry firsts-Recent growth being driven by fixed income, core holdings, and income-oriented products
Jul 11, 2012--BMO Financial Group announced today that its Exchange Traded Funds (ETF)(i) business marked its third anniversary by surpassing $6 billion in assets under management (AUM).
In the first six months of 2012 alone, the total assets of BMO ETFs grew by 62 per cent.
"This represents a significant milestone for us," said Kevin Gopaul, Chief Investment Officer and Senior Vice President, BMO Asset Management Inc. (BMO AM). "Our growth can be attributed to our ability to anticipate investors' needs combined with the strength and experience of our team, as well as a commitment to ongoing innovation. We are extremely proud of this achievement and thank our clients and partners for helping us grow our assets under management to more than $6 billion dollars in three years. We're looking forward to building on this success."
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Source: MarketWatch
Trepp Partners with iShares to Integrate CMBS ETF
July 11, 2012--Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, has partnered with BlackRock, Inc.'s iShares(R) Exchange Traded Funds (ETFs) business to integrate the iShares Barclays CMBS Bond Fund into its CMBS Analytics product offering.
The iShares fund, which launched in February 2012, is the first ETF to provide exposure to investment grade commercial mortgage-backed securities. It was designed to help investors express tactical views on the commercial real estate market and to track the performance of CMBS.
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Source: Trepp, LLC
Fixed-Income ETFs to Own $2T in 10 Years
July 10, 2012--Exchange-traded funds that buy fixed-income securities may boost their assets more than six- fold to $2 trillion in the next 10 years as they transform the way bonds are traded, according to BlackRock Inc. (BLK)
The industry that was ignited by the 2008 financial crisis has mushroomed to include $302 billion of assets in 550 funds since the July 2002 inception of the first such ETF, the iShares iBoxx Investment Grade Corporate Bond Fund, BlackRock Inc.’s Matthew Tucker and Jennifer Grancio said in a report today.
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Source: Bloomberg
Morgan Stanley-ETF Fund Flows-Preliminary 2Q 2012 ETF Net Cash Flows
July 10, 2012--We estimate that net cash inflows into US-listed ETFs were $19.9 billion during the second quarter of 2012. This report contains our estimates and analysis of 2Q 2012 ETF flows for the US
market. Once official data are released, we will publish our more
comprehensive flow analysis.
The $19.9 billion during 2Q 12 is below the $32.1 billion average
quarterly net cash inflows over the past three years. However,
we note that 1Q 2012 net cash inflows of $53.0 billion was the
highest quarterly inflow since the fourth quarter of 2009 ($54.6
billion). US-listed ETF assets are now almost $1.2 trillion, which is
up 12% year to date.
The largest net cash inflows went into ETFs tracking fixed income indices. This asset class had net cash inflows of $16.4 billion in 2Q 2012, bringing total assets in Fixed Income ETFs to $222.0 billion (19% of US-listed ETF assets). The next highest net cash inflows went into Active ETFs, which had net cash inflows of $1.7 billion this past quarter. Notably, this was primarily driven by one ETF that had net cash inflows of $1.4 billion.
Vanguard’s net cash inflows of $12.1 billion in 2Q 2012 were the largest of any provider. BlackRock had the next highest net cash inflows at $3.7 billion. As of 7/6/12, BlackRock, State Street and Vanguard accounted for almost 79% of ETF assets.
There were 34 ETFs launched and 1 liquidated in the US during 2Q 2012. There have now been 110 ETFs issued in 1H 2012 as well as 17 closures. As of 7/6/12, there were 37 issuers with 1,259 ETFs. Roughly $7 billion in the total market cap of ETFs is from ETFs issued over the past year. The most successful of these (by total assets) provide exposure to broad investment grade fixed income, a portfolio of global stocks tracking an index that is constructed to exhibit lower volatility, and to US dividend-paying stocks.
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Source: Morgan Stanley
FINRA Issues New Investor Alert: Exchange-Traded Notes-Avoid Unpleasant Surprises
July 10, 2012--The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Exchange-Traded Notes-Avoid Unpleasant Surprises to inform investors of the features and risks of exchange-traded notes (ETNs).
ETNs are a type of debt security that trade on exchanges and promise a return linked to a market index or other benchmark. However, unlike ETFs, ETNs do not buy or hold assets to replicate or approximate the performance of the underlying index. Some of the indexes and investment strategies used by ETNs can be quite sophisticated and may not have much performance history. The return on an ETN generally depends on price changes if the ETN is sold prior to maturity (as with stocks or ETFs)—or on the payment, if any, of a distribution if the ETN is held to maturity (as with some other structured products).
view the Investor Alert called Exchange-Traded Notes-Avoid Unpleasant Surprises
Source: FINRA
Global X SuperDividend ETF (SDIV) Yields 7.97% Over 12-months
July 10, 2012--Global X Funds, the New York based provider of exchange traded funds, today announced the 12-month yield for the Global X SuperDividend (SM)ETF (SDIV).
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Source: Global X
Statement of Support-Chairman Gary Gensler-Further Definition of the term "Swap"
July 10, 2012--I support the final rulemaking to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requirement to further define "swap" and other products that come under swaps market reform.
The Commodity Futures Trading Commission (CFTC) worked closely with the Securities and Exchange Commission (SEC), in consultation with the Federal Reserve, on the final rules and interpretations to further define “swaps,” “security-based swaps,” “mixed swaps” and “security-based swap agreements.”
The statutory definition as laid out by Congress of swap is very detailed. These final rules and interpretations are consistent with that detailed definition and Congressional intent. For example, interest rate swaps, currency swaps, commodity swaps, including energy, metals and agricultural swaps, and broad-based index swaps, such as index credit default swaps, are all swaps. Consistent with Congress’s definition of swaps, the rule also defines options as swaps.
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Source: CFTC.gov
Law Firm of Wohl & Fruchter LLP Announces Investigation Into VelocityShares Daily 2X Long VIX Short-Term ETN's
July 10, 2012--The law firm of Wohl & Fruchter LLP announces that it has commenced an investigation into nondisclosure of certain risks in connection with the sale by Credit Suisse of VelocityShares Daily 2X Long VIS Short-Term ETN's ("ETN’s") (NYSE Arca: TVIX).
The ETN’s trade on the American Stock Exchange under the symbol “TVIX,” and were intended to replicate, net of expenses, the returns of twice (2x) the daily performance of the S&P 500 VIX Short-Term Futures index.
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Source: .Wohl & Fruchter LLP
Twenty-Eighth Commission Meeting to Consider: (1) Two Final Rules Providing an Exemption from the Clearing Requirement for End-Users and Further Defining Certain Product Definitions under Title VII of the Dodd-Frank Act;
and (2) One Proposed Rule Providing Relief for Certain Cooperatives from the Clearing Requirement
Opening Statement of Commissioner Scott D. O'Malia
July 10, 2012--I would like to begin by thanking the two teams that are about to present to the Commission two final rules and one proposed rule pursuant to the Commission's exemptive authority.
Both teams have worked closely with me and my staff over these last several months, and I am pleased to vote affirmatively for both the final rules and the proposal.
As a whole, the three items up for vote today are the result of good decision-making that appropriately protects end-users consistent with the letter and spirit of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and provides needed guidance and clarity with respect to the definition of “swap.” Additionally, these rules are the first to benefit from our recently signed memorandum of understanding with the Office of Information and Regulatory Affairs within the Office of Management and Budget (“OMB”) providing for technical assistance with regard to the Commission’s cost-benefit analyses. I want to emphasize that these two final rules and proposal have benefited both from OMB’s technical assistance and from the Commission’s commitment to putting forth rules that utilize appropriate baselines, include replicable quantitative analysis (when possible), and reflect the consideration of a range of policy alternatives. I look forward to the continuing coordination between OMB and the Commission to further improving our cost benefit analysis.
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Source: CFTC.gov
