Global ETF News Older than One Year
Smaller hedge funds to enjoy inflows
January 6, 2011-Financial News reports, small and medium-sized managers are set to be the main beneficiaries this year from investors putting money into hedge funds as a result of reduced competition for assets from larger firms, according to new research.
For the past two years, the largest hedge funds have raised most of the money that have gone into the sector. In the third quarter, more than $14bn of the $19bn total net inflow was allocated to firms with more than $5bn in assets under management, which manage more than 60% of total industry capital, according to data provider Hedge Fund Research.
Source: Financial News
Hedge Funds Increase Bullish Crude Bets to Four-Year High
January 6, 2011--Hedge funds raised bullish bets on crude oil to the highest level in more than four years on speculation that futures will climb as the U.S. recovers from the deepest recession since the 1930s.
The funds and other large speculators increased net-long positions, or wagers on rising prices, by 4.6 percent in the seven days ended Dec. 28, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the biggest total in records going back to June 2006.
Source: Bloomberg
BNY Mellon Asset Servicing Tops $200 Billion in ETF Assets under Administration
Assets Grow 46 Percent in 2010
January 6, 2011--BNY Mellon Asset Servicing, the global leader in securities servicing, has exceeded $200 billion in exchange-traded fund (ETF) assets under administration, an increase of 46 percent since the beginning of 2010. BNY Mellon is the largest global administrator for ETFs in terms of funds serviced and sponsors supported, providing services to 400 products in the U.S. and nearly 500 total separate portfolios worldwide.
"Rapid innovation, growing investor interest in ETFs, the continuing upturn in the world's capital markets, and the demonstrated commitment that BNY Mellon has made to the ETF servicing business have all combined to drive this remarkable growth," said Joseph Keenan, managing director for BNY Mellon Asset Servicing and head of its global ETF services business.
Keenan noted ETFs that track emerging markets indices and those offering exposure to commodities and fixed income instruments were among the fastest growing segments of the global ETF services business. He added, "We expect this trend to continue. We will work closely with our clients and new sponsors to educate them about the features of ETFs.
"We will continue to invest in our industry-leading technology as we extend our capabilities to serve the widest array of ETFs and other exchange-listed products," said Keenan. "ETFs have demonstrated their growth potential on a global scale, and we believe BNY Mellon is uniquely positioned to support this rapidly expanding market."
Source: BNY Mellon
ICFR Regulatory Round Up: Economic Growth Crucial for Progress on Financial Regulation in 2011
January 6, 2011--The current battle between the financial markets and European Union (EU) politicians over the value of the debt of some of its members and the future of the Euro itself has moved Europe back to crisis mode at the end of a year that should have been about regulatory implementation. Re-regulation this year has been influenced by regulatory capture, shifting political priorities, worries about growth and growing tensions among the G20 members. The real work of implementation will begin in 2011,
including the inauguration in January 2011 of the new European supervisory authorities. Implementation will continue to be subject to debate about the economic impact of the new rules and the costs of the uncertainty surrounding their implementation and enforcement. This will also encompass ongoing worries about the fragility of the recovery, and the need to have a fully functioning financial system to be able to handle the refinancing of significant amounts of maturing government and bank debt in the next 12 to 18 months.
As we close 2010, we see a raft of consultations and regulations, including: rule-writing assigned to the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) by the US Dodd-Frank Act; details on global regulatory standards on capital adequacy and liquidity from the Basel Committee on Banking Supervision (BCBS); a review of the Markets in Financial Instruments Directive (MiFID) in Europe, as well as papers on issues of remuneration, crisis resolution, and the passage of the Alternative Investment Fund Management (AIFM) Directive.
The above mentioned will be overlaid with the new objectives of France’s twelve-month tenure of the G20 – an extended tenure to permit the G20 to re-establish some momentum. It is absolutely critical that attention to new goals does not diminish the energy behind solutions to open regulatory issues such as cross border crisis resolution, and the development of tools and measures for macroprudential supervision. It is also vital – if the G20 is to maintain its credibility with the members included by enlargement of the G7 – that due attention is given to the issues of the new member states.
Source: ICFR
OECD annual inflation rate eases slightly to 1.8% in November 2010
January 6, 2011--Consumer prices in the OECD area1 rose by 1.8% in the year to November 2010, down from 1.9% in October. This easing in the rate of inflation mainly reflected slower growth in energy prices, which increased by 5.4% in November, compared with 6.6% in October. Food prices rose by 2.7% in November, up from 2.6% in October.
Excluding food and energy, consumer prices rose by 1.2 % in November compared with 1.1% in October.
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Source: OECD
S&P plans threaten banks with downgrades
January 6, 2011--Half the world’s largest banks could see their credit ratings downgraded under proposals from Standard & Poor’s to significantly revise the way it rates the sector.
The credit rating agency on Thursday published proposals aimed at making its ratings more transparent and shifting its analysis of a bank’s earnings to focus on their ability to protect bank capital and cover losses.
Source: FT.com
Storage seen as challenge for non-gold commods ETFs
January 5, 2011--Exchange-traded funds (ETFs) backed by physical commodities other than gold are an "utterly crazy idea", Goldman Sachs (NYSE: GS - news) analyst Jeffrey Currie said on Wednesday.
"The key to why it works in gold but won't work in beef or soybeans is that gold is very easy to store," he said at the Oxford Farming Conference.
ETFs backed by physical gold have attracted investment of up to $8.1 billion. UK-based ETF Securities last month listed products backed by copper, nickel and tin on the London Stock Exchange and plans to launch aluminium, zinc and lead this quarter.
Source: Reuters
FAO economist: Grain prices could go much higher
January 5, 2011--Prices of corn, wheat and other grains can go much higher and current weather patterns are of concern, the United Nations’ food agency economist said after its food price index hit a record high in December.
"We are concerned, the real reason for concern is the unpredictability,” the Food and Agriculture Organisation’s economist Abdolreza Abbassian told Reuters in an interview on Wednesday. “There is still room for prices to go up much higher, if for example the dry conditions in Argentina tend to become a drought, and if we start having problems with winterkill in the northern hemisphere for the wheat crops,” he said. Winterkill occurs when cold attacks plants seeded, generally in the autumn, for harvesting the following year. Abbassian added that despite high prices, many factors that triggered food riots in 2007/08, such as weak production in poor countries and a sudden surge in crude oil prices, were not currently present, reducing the risk of more turmoil.
Source: Todays Zaman
A Barrel of Oil or a Bottle of Wine: How Do Global Growth Dynamics Affect Commodity Prices? IMF Working paper
January 4, 2011--Summary: This paper investigates the causes of extreme fluctuations in commodity prices from 1990 to 2010. Analyzing two very distinct commodities-crude oil and fine wine, we find that macroeconomic factors are the main determinants of commodity prices. Although supply constraints have the expected effect, aggregate demand growth is the key factor.
The empirical results show that while advanced economies account for more than half of global consumption, emerging economies make up the bulk of the incremental change in demand, thereby having a greater weight in commodity price formation. The results also show that the shift in the composition of aggregate commodity demand is a recent phenomenon.
Source: IMF
BATS Global Markets Sets Numerous Europe Records In December
New BYX Exchange Continues Growth In U.S. - Sets Records In Five European Indice - Reports 9.5% US Equities Market Share
January 4, 2011--January 4, 2011 – BATS Global Markets (BATS) today reported volume numbers for the month of December, including the following:
BATS Europe reported new consolidated monthly market share records in the Swiss SMI (9.1%), Copenhagen’s OMXC20 (7.1%), Brussels’ BEL20 (5.5%), Paris’ CAC Next20 (5.3%) and Frankfurt’s MDAX (5.5%), as well as consolidated monthly market share of 10.9% in the FTSE 100 and 6.2% in Europe overall.
The MTF set monthly records in multiple indices in every month of 2010 and ends the year with 6.0% or more market share in 10 major European indices in December.
The BATS US Equities Exchanges, BATS BZX Exchange and BATS BYX Exchange, combined for average daily matched volume of 643.1 million shares, representing 9.5% of all US cash equity share volume for the month. In November, the BATS Exchanges represented 10.2% of all US equity share volume.
BATS BZX Exchange, formerly known as BATS Exchange, recorded average daily US matched volume of 552.4 million shares, representing 8.2% of all US cash equity share volume for the month. In November, the BATS BZX Exchange represented 9.3% of all US cash equity share volume.
Source: BATS
