Global ETF News Older than One Year
Institutions and financial advisers optimistic about alternative investments
November 17, 2009--Institutions and financial advisers continue to view alternative investments optimistically, despite their questionable performance, correlation and liquidity during last year’s global downturn, according to a survey by Morningstar and Barron’s.
The majority of participants to the survey said they plan to increase allocations to alternatives, but with greater scrutiny and due diligence given to those investments.
Source: ETF Express
iShares sees growing demand for sector ETFs
November 17, 2009-A report from Barclays Global Investors, the parent company of iShares, has highlighted expanding investor interest in sector exchange-traded funds.
According to the report, 2009 net new flows into sector ETFs in Europe already total more than USD2.5bn.
Year-to-date, basic resources has been the most popular sector with USD410m in net new assets, followed by banks with USD350m.
Source: ETF Express
Asia To Play a Leading Role in Reshaping the Post-Crisis Global Economy, IMF Managing Director Dominique Strauss-Kahn Says
November 13, 2009--In a speech today at a conference organized by the Monetary Authority of Singapore, International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn called on Asia to play a leading role in guiding the global economy to a new, more sustainable path for global growth. “This is not only appropriate given Asia’s economic weight,” he remarked, “but also necessary, since Asia is such an important part of the solution.”
The strength of Asia’s economies has helped them weather the global financial crisis, and the region is leading the world into economic recovery, he said. The IMF expects Asia’s GDP growth to be 5 ¾ percent next year—almost double the 3 percent rate forecast for the global economy. “Thanks to strong fundamentals and quick and forceful policy responses to the crisis, Asia has performed considerably better than other regions of the world—and has thus played an important role in supporting global recovery,” he said.
To succeed over the long term, Asia will need to adapt to the new challenges presented by the post-crisis economy. “In particular,” he said that “because there are limits to the pace of export growth, domestic and regional demand will need to play an increasingly important role in underpinning Asia's growth.” Pointing to Asia's increasing role in international fora—including the G-20 and the IMF—Mr. Strauss-Kahn said that “now is the time for Asia to use its stronger voice to contribute to global efforts to reshape the economic and financial landscape.”
Source: International Monetary Fund (IMF)
Semi-Annual Changes to the NASDAQ Biotechnology Index
November 13, 2009--The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) announced today the results of the semi-annual re-ranking
of the NASDAQ Biotechnology Index(R) (Nasdaq:NBI), which will become
effective with the market open on Monday, November 23, 2009.
The re-ranking will result in the following eight securities being added to the Index:
China Sky One Medical, Inc. (Nasdaq:CSKI), Hi-Tech Pharmacal Co., Inc. (Nasdaq:HITK), Poniard Pharmaceuticals, Inc. (Nasdaq:PARD), SIGA Technologies, Inc. (Nasdaq:SIGA), Spectrum Pharmaceuticals, Inc. (Nasdaq:SPPI), Targacept, Inc. (Nasdaq:TRGT), Vical Incorporated (Nasdaq:VICL), and Vanda Pharmaceuticals Inc. (Nasdaq:VNDA).
All securities are classified according to the Industry Classification Benchmark (ICB) as either biotechnology or pharmaceutical. The securities that meet the classification criteria then must meet other Index eligibility criteria including listing on the NASDAQ Global Market or the NASDAQ Global Select Market and meeting minimum requirements for market value, average daily share volume and seasoning as a public company. The Index is ranked on a semi-annual basis in May and November. For more information about the NASDAQ Biotechnology Index, including eligibility criteria, visit https://indexes.nasdaqomx.com/.
As a result of the re-ranking, Matrixx Initiavies, Inc (Nasdaq:MTXX) will be removed from the Index.
The NASDAQ Biotechnology Index is the basis for the iShares Nasdaq Biotechnology Index(SM) Fund (IBB), which seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the NASDAQ Biotechnology Index. In addition, options based on the NASDAQ Biotechnology Index and the iShares Nasdaq Biotechnology Index Fund trade on various exchanges.
Source: NASDAQ OMX
IASB completes first phase of financial instruments accounting reform
November 12, 2009--The International Accounting Standards Board (IASB) issued today a new International Financial Reporting Standard (IFRS) on the classification and measurement of financial assets. Publication of the IFRS represents the completion of the first part of a three-part project to replace IAS 39 Financial Instruments: Recognition and Measurement with a new standard - IFRS 9 Financial Instruments. Proposals addressing the second part, the impairment methodology for financial assets were published for public comment at the beginning of November, while proposals on the third part, on hedge accounting, continue to be developed.
The new standard enhances the ability of investors and other users of financial information to understand the accounting of financial assets and reduces complexity – an objective endorsed by the Group of 20 leaders (G20) and other stakeholders internationally. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the many different impairment methods in IAS 39. Thus IFRS 9 improves comparability and makes financial statements easier to understand for investors and other users.
The IASB has received broad support for its approach. This became evident during the unprecedented global scale of consultation and outreach activity it undertook in order to refine proposals contained within the exposure draft published in July 2009. Round table discussions were held in Asia, Europe and the United States. Interactive webcasts, each attracting thousands of registered participants, have been held, often on a weekly basis. In addition, more than a hundred meetings have been held with interested parties around the world during the past four months.
Project Summary and Feedback Statement- IFRS 9 Financial Instruments
Source: International Accounting Standards Board (IASB)
The time has come to make the hard choices needed to combat climate change and enhance global energy security, says the latest IEA World Energy Outlook
November 11, 2009--"World leaders gathering in Copenhagen next month for the UN Climate summit have a historic opportunity to avert the worst effects of climate change. The World Energy Outlook 2009 seeks to add momentum to their negotiations at this crucial stage by detailing the practical steps needed for a sustainable energy future as part of a global climate deal,” said Nobuo Tanaka, Executive Director of the International Energy Agency today in London at the launch of the new WEO – the annual flagship publication of the IEA.
“WEO-2009 provides both a caution and grounds for optimism. Caution, because a continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security. Optimism, because there are cost-effective solutions to avoid severe climate change while also enhancing energy security – and these are within reach as the new Outlook shows,” added Mr. Tanaka.
Although, as one of the consequences of the financial crisis, global energy use is set to fall this year, WEO-2009 projects that it will soon resume its upward trend if government policies don’t change. In this Reference Scenario, demand increases by 40% between now and 2030, reaching 16.8 billion tonnes of oil equivalent. Projected global demand is lower than in last year’s report, reflecting the impact of the economic crisis and of new government policies introduced over the past year. Fossil fuels continue to dominate the energy mix, accounting for more than three-quarters of incremental demand. Non-OECD countries account for over 90% of this increase, and China and India alone for over half. In addition to increasing susceptibility to energy price spikes, the Reference Scenario projects a persistently high level of spending on oil and gas imports which would represent a substantial financial burden on import-dependent consumers. China overtakes the US around 2025 to become the world’s biggest spender on oil and gas imports. The energy poverty challenge also remains unresolved with 1.3 billion people still without electricity in 2030 from 1.5 billion today; though universal access could be achieved with investment of only $35 billion per year in 2008-2030.
WEO-2009 demonstrates that containing climate change is possible but will require a profound transformation of the energy sector. A 450 Scenario sets out an aggressive timetable of actions needed to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million of carbon-dioxide equivalent and keep the global temperature rise to around 2°C above pre-industrial levels. To achieve this scenario, fossil-fuel demand would need to peak by 2020 and energy-related carbon dioxide emissions to fall to 26.4 gigatonnes in 2030 from 28.8 Gt in 2007.
view executive summary of the World Energy Outlook report
Source: International Energy Agency (IEA)
Fed and Wall St in talks over CoCos
Novembr 11, 2009--The US Federal Reserve is in talks with Wall Street executives and others over whether US financial groups should raise capital through a new type of bond that converts into equity when a bank is in trouble.
The talks over the hybrid security, which was pioneered by Lloyds Banking Group of the UK last week, are in their early stages but underline regulators’ desire to find novel ways to bolster banks’ balance sheets in times of crisis. The new securities – known as contingent convertibles, or CoCos – operate as bonds in normal times, paying coupons to investors.
Source: FT.com
Investment banks gain by going with the flow
November 11, 2009--Another bank earnings season, another round of outrage about bonuses as institutions such as Goldman Sachs, JPMorgan Chase and Credit Suisse report bumper profits.
In spite of the usual seasonal slowdown as bankers decamp to summer hotspots such as the Hamptons and Sardinia, the top 13 global investment banks raked in $73bn in net revenues in the third quarter, according to research from analysts at Morgan Stanley.
Source: FT.com
ETF Landscape: Industry Review, end of Q3 2009
November 11, 2009--At the end of Q3 2009, global ETF assets hit an all time high of US$933Bn, 4.8% above the previous all time high of US$891Bn set in August 2009.
There were 1,819 ETFs with 3,247 listings from 96 providers on 40 exchanges around the world.
To request a copy of the report click here
Source:ETF Research and Implementation Strategy, BGI
Barclays Global Investors ETF Landscape Industry Preview - End Of October 2009
November 11, 2009--Highlights
Global ETF and ETP Industry 2009:
• Global Exchange Traded Products "ETP" AUM breaks through US$1 trillion - all time high.
• Global ETF assets have hit an all time high of US$942 bn at the end of October 2009 – 0.9% above the previous all time high of US$933 bn set in Q3 2009.
• At the end of October 2009 the Global ETF industry had 1,859 ETFs with 3,327 listings, assets of $941.85 billion, from 97 providers on 40 exchanges around the world.
• YTD assets have risen by 32.5% which is more than the 20.2% rise in the MSCI World index in USD terms.
• YTD the number of ETFs increased by 16.8% with 336 new ETFs launched, while 73 ETFs were closed.
• In Q2 the number of ETFs listed in Europe surpassed the US with 801 ETFs listed in Europe, compared to 732 in the US .
• There are currently plans to launch 805 new ETFs.
• YTD the number of exchanges with official listings decreased by three to 40.
• YTD the average daily trading volume in USD decreased by 7.7% to US$74.4 Billion.
• MSCI ranks 1st in terms of ETF AUM tied to their benchmarks with assets of US$222.66 Bn and 267 ETFs, while Standard & Poors (S&P) ranks 2nd with US$218.83 Bn and 229 ETFs, followed by Barclays Capital in 3rd with US$81.33 Bn and 62 ETFs.
• Globally, iShares is the largest ETF provider in terms of both number of products, 405 ETFs, and assets of US$455.72 Bn, reflecting 48.4% market share; State Street Global Advisors is second with 106 products and US$137.08 Bn, 14.6% market share; followed by Vanguard with 40 products and assets of US$80.76 Bn and 8.6% market share at the end of October 2009.
• Globally, net sales of mutual funds (excluding ETFs) were US$155.2 Bn, while net sales of ETFs were US$76.8 Bn during the first eight months of 2009 according to Strategic Insight.
• Additionally, there were 569 other ETPs (Exchange Traded Products)1 with assets of US$139.70 Bn from 40 providers on 19 exchanges.
• Combined, there were 2,428 products with 4,166 listings, assets of US$1,081.54 Bn from 124 providers on 43 exchanges around the world.
• FINRA, the Financial Industry Regulatory Authority which regulates all securities firms doing business in the US , issued a regulatory notice in June 2009 to provide guidance on leveraged and inverse ETFs. The notice states that "...inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets...".
• The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) issued an Investor Alert on Tuesday 18 August 2009 entitled 'Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors'. The following is taken from the Alert: The SEC staff and FINRA are issuing this Alert because we believe individual investors may be confused about the performance objectives of leveraged and inverse exchange-traded funds (ETFs). Leveraged and inverse ETFs typically are designed to achieve their stated performance objectives on a daily basis. Some investors might invest in these ETFs with the expectation that the ETFs may meet their stated daily performance objectives over the long term as well. Investors should be aware that performance of these ETFs over a period longer than one day can differ significantly from their stated daily performance objectives.
• U.S. Commodity Futures Trading Commission (CFTC) held hearings on Energy Position Limits and Hedge Exemptions on July 28, July 29 and August 5, on whether federal position limits should be set on the energy markets. The hearings provided critical input from a wide range of industry participants and academics to the Commission's efforts to examine different approaches to regulate energy markets. The Commodity Exchange Act states that the Commission shall impose limits on trading and positions as necessary to eliminate, diminish or prevent the undue burdens on interstate commerce that may result from excessive speculation. The CFTC's hearings examined the role of position limits in energy markets in fulfilling the CFTC's mission to ensure the fair, open and efficient functioning of futures markets. Goldman Sachs, JPMorgan Chase and other leading banks are exempt from most commodity-trading limits in order to manage risks as they serve as market makers. The Commodity Futures Trading Commission is looking into whether those exemptions should stand, as it considers blanket limits on a variety of commodity markets. A number of ETPs/ ETFs providing exposure to commodities have recently issued notices that they have suspended their creation process.
US ETF and ETP Industry 2009:
• US ETF assets have hit an all time high of US$640 Bn at the end of October 2009 which tops the previous all time high of US$631 Bn set in Q3 2009.
• At the end of October 2009 the US ETF industry had 732 ETFs, assets of $639.58 billion, from 25 providers on 3 exchanges.
• 29 January 2009 marked the 16th anniversary of ETFs in the US .
• YTD assets have risen by 28.7%, which is more than the 15.3% rise in the MSCI US index in USD terms.
• YTD the number of ETFs increased by 4.9% with 75 new ETFs launched, while 42 ETFs were delisted.
• YTD the average daily trading volume in US dollar has decreased by 10.3% to US$69.1 Bn.
• iShares is the largest ETF provider in terms of both number of products, 183 ETFs, and assets of US$341.21 Bn, reflecting 53.3% market share; State Street Global Advisors is second with 87 products and US$126.12 Bn, a 19.7% market share; followed by Vanguard with 39 products, assets of US$80.72 Bn and 12.6% market share at the end of October 2009.
• In the US , net sales of mutual funds (excluding ETFs) were minus US$47.1 Bn, while net sales of ETFs domiciled in the US were positive US$55.1Bn in the first eight months of 2009 according to Strategic Insight.
• Additionally, there were 137 other ETPs (Exchange Traded Products) with assets of US$78.86 Bn from 18 providers on 1 exchange.
• Combined, there were 869 products with assets of US$718.44 Bn from 39 providers on 3 exchanges in the US.
European ETF and ETP Industry 2009:
• European ETF assets have hit an all time high of US$206 bn at the end of October 2009 which is 0.6% above the previous all time high of US$204 bn set in Q3 2009 and 28.6% above the high of US$160 bn recorded in July 2008.
• At the end of October 2009 the European ETF industry had 801 ETFs with 2,001 listings, assets of $205.54 Bn, from 32 providers on 18 exchanges.
• 11 April 2009 marked the ninth anniversary of ETFs in Europe.
• YTD assets have risen by 44.2%, which is greater than the 25.5% rise in the MSCI Europe index in USD terms.
• YTD the number of ETFs increased by 26.7% with 193 new ETFs launched.
• YTD the number of exchanges with official listings decreased by three to 18.
• YTD the average daily trading volume in US dollar has increased by 34.0% to US$3.0 Bn. Most ETF trades are not required to be reported in Europe as ETFs are not covered by the European Union directive on markets in financial instruments (MiFID).
• iShares is the largest ETF provider in terms of both number of products, 168 ETFs, and assets of US$80.20 Bn, reflecting 39.0% market share; Lyxor Asset Management is second with 118 products and US$41.94 Bn, 20.4% market share; followed by db x-trackers with 113 ETFs and assets of US$34.53 Bn and 16.8% market share at the end of October 2009.
• In Europe net sales of mutual funds (excluding ETFs) were US$174.7 Bn while net sales of ETFs domiciled in Europe were US$23.6 Bn during the first eight months of 2009 according to Lipper FMI.
• Additionally, there were 150 other ETPs (Exchange Traded Products) with assets of US$17.96 Bn from 5 providers on 6 exchanges.
• Combined, there were 951 products with assets of US$223.51 Bn from 33 providers on 18 exchanges in Europe.
To request a copy of the report click here
Source:ETF Research and Implementation Strategy, BGI
