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RBC unit to cover nearly $3 million of investor ETF losses
May 2, 2012--Royal Bank of Canada's brokerage unit agreed to repay investors in Massachusetts up to $2.9 million to cover losses on leveraged and inverse leveraged exchange-traded funds, the latest phase of a nationwide regulatory crackdown on the sometimes volatile products.
The bank's RBC Capital Markets division was also fined $250,000 by Massachusetts' top securities regulator, William Galvin, for selling the "highly volatile, nontraditional" funds that did not fit with some clients' investment objectives, Galvin said in a statement on Wednesday.
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Source: Reuters
PIMCO Launches Active TIPS ETF
May 2, 2012--Fresh off the heels of the release of its Total Return ETF, PIMCO on Tuesday began trading its Global Advantage Inflation-Linked Bond Strategy Fund (ILB) on the NYSE.
According to the Newport Beach, Calif.-based bond behemoth, the latest ETF is designed for long-term returns above inflation by actively managing global inflation-linked bonds and currencies. The fund is managed by Mihir Worah, managing director and head of PIMCO’s real return portfolio management team.
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Source: AdvisorOne
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
May 2, 2012--Standard & Poor's will make the following changes in the S&P/TSX Canadian Indices:
On May 1, 2012, the shareholders of Reliable Energy Ltd. (TSXVN:REL) approved the Plan of Arrangement whereby the company will be acquired by Crescent Point Energy Corp. (TSX:CPG).
Shareholders of Reliable Energy will receive 0.00794 shares of Crescent Point for every Reliable share held. Reliable Energy will be removed from the S&P/TSX Venture Composite and Venture Select Indices after the close of trading on Friday, May 4, 2012. Reliable Energy has been halted on the TSX Venture Exchange effective at the open of Wednesday, May 2, 2012. For index calculation purposes for May 2, 3 and 4, the price of Reliable Energy will be 0.00794 times the close price of Crescent Point.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Reed plans to continue examination of ETFs
Rhode Island senator: 'This market deserves more attention'
May 2, 2012--Sen. Jack Reed, D-R.I., chairman of the Senate Banking Subcommittee on Securities, Insurance and Investment, indicated that he would follow up on a hearing he held last year on the investment vehicles with another one in coming weeks.
"The [Securities and Exchange Commission] is closely monitoring this issue, and so am I," Mr. Reed said in a statement emailed to InvestmentNews.
On Tuesday, the Financial Industry Regulatory Authority Inc. levied $9.1 million in penalties on four brokerage giants – Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Financial Services and Wells Fargo Advisors LLC – for selling complex ETFs to retail clients whose conservative portfolios shouldn't have contained the risky investments.
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Source: Investment News
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
May 2, 2012--Standard & Poor's will make the following changes in the S&P/TSX Canadian Indices:
On May 1, 2012, the shareholders of Reliable Energy Ltd. (TSXVN:REL) approved the Plan of Arrangement whereby the company will be acquired by Crescent Point Energy Corp. (TSX:CPG).
Shareholders of Reliable Energy will receive 0.00794 shares of Crescent Point for every Reliable share held. Reliable Energy will be removed from the S&P/TSX Venture Composite and Venture Select Indices after the close of trading on Friday, May 4, 2012. Reliable Energy has been halted on the TSX Venture Exchange effective at the open of Wednesday, May 2, 2012. For index calculation purposes for May 2, 3 and 4, the price of Reliable Energy will be 0.00794 times the close price of Crescent Point.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
ETFGI-Latin America ETF/ETP Industry As At End Of April 2012 - Preliminary Findings
May 2, 2012--Summary for ETFs listed in Latin America
At the end of April 2012, the Latin America ETF industry had 32 ETFs, with 487 listings, assets of US$11.4 Bn, from 15 providers on 4 exchanges.
Assets
ETF assets have increased by 3.4% from US$11.0 Bn in March 2012 to US$11.4 Bn in April 2012.
YTD through end of April 2012, ETF assets have increased by 9.9% from US$10.3 Bn to US$11.4 Bn.
Flows
In April 2012, ETFs saw net inflows of US$591.3 Mn. Equity ETFs gathered net inflows of US$566.4 Mn and fixed income ETFs gathered net inflows of US$4.7 Mn. YTD through end of April 2012, ETFs saw net outflows of US$172.1 Mn. Equity ETFs have experienced US$151.4 Mn net outflows and fixed income ETFs have experienced net outflows of US$20.0 Mn. YTD through end of April 2012, leveraged ETFs have gathered net inflows of US$12.3 Mn, while inverse ETFs have experienced net outflows of US$13.0 Mn.
iShares gathered the largest net inflows in April with US$678.6 Mn, followed by Protego with US$20.3 Mn. BBVA Asset Management experienced the largest net outflows in April with US$98.7 Mn.
BBVA Asset Management experienced the largest net outflows YTD with US$103.5 Mn, followed by Itau Unibanco with US$64.7 Mn and iShares with US$3.3 Mn net outflows.
request report
Source: ETFGI
ETFGI-United States ETF/ETP industry as at end of April 2012 - Preliminary findings
May 2, 2012--Summary for US listed ETFs
At the end of April 2012, the US ETF industry had 1,170 ETFs, assets of US$1,074.5 Bn, from 30 providers on 3 exchanges.
Assets
ETF assets have decreased by 0.2% from US$1,077.1 Bn in March 2012 to US$1,074.5 Bn in April 2012.
YTD through end of April 2012, ETF assets have increased by 14.4% from US$939.3 Bn to US$1,074.5 Bn.
Flows
In April 2012, ETFs saw net inflows of US$4.2 Bn. Fixed income ETFs gathered net inflows of US$4.6 Bn, of which US$1.8 Bn went into corporate bond ETFs. Commodity ETFs gathered net inflows of US$0.5 Bn, of which US$0.7 Bn went into ETFs providing exposure to precious metals, while ETFs providing exposure to agriculture, energy, industrial metals and broad commodity indices experienced net outflows totalling a combined US$0.1 Bn. Equity ETFs experienced net outflows of US$0.8 Bn, of which ETFs providing exposure to US equity indices saw net outflows of US$0.4 Bn, while ETFs providing exposure to global equity indices gathered net inflows of US$0.3 Bn.
YTD through end of April 2012, ETFs have gathered net inflows of US$53.0 Bn. Equity ETFs have gathered US$33.1 Bn, of which net inflows of US$19.7 Bn went into ETFs providing exposure to US equity indices. Fixed income ETFs have gathered net inflows of US$20.2 Bn, of which US$7.6 Bn net inflows went into high yield ETFs, while government bond ETFs have experienced net outflows of US$0.8 Bn. Commodity ETFs have gathered net inflows US$0.2 Bn, of which US$0.6 Bn net inflows went into ETFs providing exposure to precious metals, while ETFs providing exposure to agricultural commodities experienced net outflows of US$0.3 Bn.
YTD through end of April 2012, leveraged ETFs have experienced net outflows of US$3.2 Bn, inverse ETFs have experienced US$0.3 Bn net outflows, while leveraged inverse ETFs have gathered US$2.5 Bn net inflows.
Vanguard gathered the largest net inflows in April with US$4.4 Bn, followed by iShares with US$1.2 Bn and Van Eck Associates Corp with US$1.0 Bn net inflows.
Vanguard gathered the largest net inflows YTD with US$21.7 Bn, followed by iShares with US$13.0 Bn and SPDR ETFs with US$6.2 Bn net inflows.
PowerShares experienced the largest net outflows in April with US$2.5 Bn.
Direxion Shares experienced the largest net outflows YTD with US$0.6 Bn, followed by ProShares with US$0.5 Bn and Bank of New York with US$0.3 Bn net outflows.
request report
Source: ETFGI
CFTC Votes to Clarify Indemnification and Confidentiality Provisions in the Dodd-Frank Act
Commission Issues Proposed Interpretative Statement; Seeks Public Comment
May1, 2012--The Commodity Futures Trading Commission (CFTC) today voted to issue a Proposed Interpretative Statement regarding the confidentiality and indemnification provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
The proposal generally exempts foreign regulators from the indemnification and confidentiality provision in the Dodd-Frank Act, and ensures that foreign regulators have access to data in Swap Data Repositories (SDR). This exemption only applies to data that is required to be reported and if the SDR is recognized by the country’s law and regulation. The proposal passed the Commission by a vote of 5-0. The proposal’s comment period will be open for 30 days from the date of publication in the Federal Register.
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Source: CFTC.gov
Vanguard: Blacks and Hispanics More Likely to Borrow from 401(k), But at Roughly Same Dollar Amount as Whites and Asians; Vanguard Recommends Limiting Plan Loans for All Participants
Vanguard: blacks and Hispanics take more loans and hardship withdrawals from their 401(k) accounts than whites and Asians. But they borrow only slightly more, so all four groups put similar assets at risk.
May 01, 2012--New Vanguard research, a second report in a series on diversity and retirement savings, indicates that blacks and Hispanics are more likely to take loans and hardship withdrawals from their 401(k) plan accounts than whites and Asians.
At the same time, blacks and Hispanics borrow only slightly more of their retirement account balance, so members of all four groups put roughly the same amount of their assets at risk by borrowing from their retirement plan.
The study, Diversity and Defined Contribution Plans: Loans and Hardship Withdrawals, also notes that a 401(k) loan feature encourages some people to participate and save in their 401(k) plan. Thus, employees who participate in a plan and take a loan or hardship withdrawal are likely to be better prepared for retirement than their fellow workers who don’t participate and have no retirement plan savings.
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Source: Vanguard
BNY Mellon wins dismissal in Virginia FX fraud case
May 1, 2012--A Virginia state judge on Tuesday dismissed a lawsuit that accused BNY Mellon Corp of overcharging on foreign exchange trades for pension funds in that state.
Terrence Ney, a state judge in Fairfax County, said the pension funds, including the Virginia Retirement System, did not show evidence that they submitted claims for payment in connection with their allegations of overcharging on forex trades. A claim for payment is an essential part of proving a fraudulent action under the Virginia Fraud Against Taxpayers Act, the judge said in his ruling.
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Source: Reuters
