Americas ETP News
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S&P Balks at SEC Proposal to Reveal Rating Errors
August 8, 2011--Standard & Poor's, whose unprecedented downgrade of U.S. debt triggered a worldwide stocks sell-off, is pushing back against a U.S. government proposal that would require credit raters to disclose "significant errors" in how they calculate their ratings.
S&P, which was accused by the Obama administration of making an error in its calculations leading to Friday's downgrade, raised concern about the proposed new corrections policy and other issues in an 84-page letter to the Securities and Exchange Commission, dated August 8.
Source: Reuters
Investors Using ETPs more for Risk Management
August 8, 2011--Stomach-turning global volatility has bolstered demand for certain alternative exchange-traded products used by institutions to quickly hedge their portfolios or make directional bets to profit from market instability.
“We've seen pretty significant year-to-date increases on inverse” exchange-traded products, said Russ Koesterich, managing director and global chief investment strategist in San Francisco for BlackRock Inc.'s iShares business. “In general, investors are using these products to position against what they think might be a dour movement of assets and they want to hedge part of that exposure.”
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Source: Pensions & Investments
Mexico: Selected Issues
August 8, 2011--I. POTENTIAL GROWTH AND THE OUTPUT GAP IN MEXICO
1
Decomposing the growth process in trend and cyclical factors represents an important
challenge, with implications for policy decisions. This paper applies several methodologies to the case of Mexico and tries to assess to what extent these methodologies adequately capture cyclical changes.
The results suggest that care is needed when using these indicators
in real time to assess the stage of the cycle, particularly in the presence of large shocks, and that a variety of macroeconomic indicators are needed to evaluate and validate the results.
A. The Output Gap
1. Estimates of the output gap are important for the conduction of macroeconomic
policies. The central bank‘s inflation targeting framework entails assessing if the projected output implied by the monetary policy stance is consistent with the inflation target.
view IMF paper-Mexico: Selected Issues
Source: IMF
FlexShares files with the SEC
August 8, 2011--FlexShares has filed a pre-effective amendment no. 1, registration statement with the SEC for the
FlexSharesSM Morningstar US Market Factor Tilt Index Fund
FlexSharesSM Morningstar Global Upstream Natural Resources Index Fund
FlexSharesSM iBoxx 3-Year Target Duration TIPS Index Fund
FlexSharesSM iBoxx 5-Year Target Duration TIPS Index Fund
FlexSharesSM iBoxx 7-Year Target Duration TIPS Index Fund
view filing
Source: SEC.gov
FlexShares files with the SEC
August 8, 2011--FlexShares has filed an amended and restated application for exemptive relief with the SEC for actively-managed ETFs.
view filing
Source: SEC.gov
CME Clearing is Not Planning to Adjust Haircuts Following S&P Rating Change to U.S.
August 8, 2011--CME Clearing President Kim Taylor made the following statement regarding the recent S&P change to the U.S.'s AAA credit rating:
"CME Clearing has evaluated the market situation surrounding the U.S. downgrade and has determined that there is no current need for changes to our collateral haircuts or policies for accepting U.S. Treasuries as margin collateral.
We will continue to monitor the liquidity environment and advise market participants if the environment changes."
CME Group has been helping customers manage their risk through a variety of market conditions for over 150 years. We are proud of our strong track record and are confident that our risk methodologies will protect the markets and market users we serve.
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Source: CME
Dow Jones Indexes, UBS Investment Bank Launch Dow Jones-UBS Roll Select Commodity Index
New Index Designed to Mitigate Effects of Contango on Index Performance
August 8, 2011-- Dow Jones Indexes, a leading global index provider, and UBS Investment Bank today announced the launch of the Dow Jones-UBS Roll Select Commodity Index, a gauge that aims to mitigate the negative effects of contango on index returns.
For each commodity, the new index -- a version of the Dow Jones-UBS Commodity Index series -- rolls from the expiring futures contract into the contract showing the least contango (or greatest backwardation), selecting from those specified contracts with nine months or fewer until expiration. By contrast, the Dow Jones-UBS Commodity Index rolls on a predetermined schedule into specified futures contracts, typically the ones with "nearby" expirations.
When the prices for exchange-traded futures contracts are higher in the distant delivery months than in the nearer delivery months, the market is said to be in "contango". For example, the sale of a January contract would take place at a price that is lower than the purchase price of a March contract. Holding other factors constant, contango generally has a negative impact on index returns, as the higher longer-term future prices move lower over time to the shorter-term prices. This potential convergence over time is often referred to as a negative "roll yield".
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Source: Dow Jones Indexes
S&P, TMX Group Launch S&P/TSX Venture Select Index for the Canadian Market
S&P Licenses Blackrock to List ETF Based Upon the Index
August 8, 2011--Providing Canadian investors with a new and innovative approach to tracking the performance of smaller-cap Canadian Stocks trading on TSX Venture Exchange, S&P Indices and TMX Group Inc., owner of Toronto Stock Exchange and TSX Venture Exchange, launched today the S&P/TSX Venture Select Index.
The S&P/TSX Venture Select Index measures the performance of constituents in the S&P/TSX Venture Composite Index that meet specific market capitalization and liquidity criteria.
The S&P/TSX Venture Composite is a broad market indicator of Canadian micro-cap securities.
S&P Indices also announced today that it has licensed Blackrock, Inc., one of the world's largest providers of exchange traded funds (ETF) to launch an ETF based upon the S&P/TSX Venture Select Index.
"With the launch of this Index, investors will have the opportunity to track the performance of the growth in Canadian micro-cap securities," says Abigail Etches, Director at S&P Indices.
For more information about the S&P/TSX Venture Select Index, please visit: www.standardandpoors.com/indices.
Source: Standard & Poors
Morgan Stanley -ETF Weekly Update
August 8, 2011--Weekly Flows: $5.6 Billion Net Outflows
ETF Assets at $1.0 Trillion, Up 2% YTD
Launches: 3 New ETFs
iShares Changes Expense Ratios on 11 ETFs
US-Listed ETFs: Estimated Flows by Market Segment
Amid a broad sell-off in global equities, ETFs posted net outflows of $5.6 bln last week
aggregate net outflows of $8.2 billion)
Conversely, commodity ETFs, particularly those holding gold and silver, generated net inflows last week
ETF assets fell by 7% last week, primarily related to market declines, and stand at $1.0 trillion, up 2% YTD
13-week flows remain mostly positive among asset classes; combined $19.3 bln net inflows
Fixed Income & Commodity ETFs up $8.8 and $4.1 bln, respectively; US Large-Cap ETFs down $2.0 bln
We estimate ETFs have generated net inflows 18 out of 31 weeks YTD; YTD net inflows of $63.4 bln
US-Listed ETFs: Estimated Largest Flows by Individual ETF
Despite a 10% market price decline last week, the iShares Russell 2000 Index Fund (IWM) generated net inflows of $1.6 bln last week, the most of any ETF
Renewed fears related to slowing global growth, European debt concerns and the specter of a US credit rating
downgrade extended GLDs streak of net new money to four weeks (aggregate net inflows of $4.2 bln)
SPDR S&P 500 ETF (SPY) exhibited the largest net outflows of any ETF over the past 1- and 4-week periods
request report
Source: Morgan Stanley
ISE and Horizon Kinetics Launch ISE Wealth Index
August 8, 2011--The International Securities Exchange (ISE) announced today that it has partnered with Horizon Kinetics LLC (Horizon Kinetics), an independently-owned and operated investment boutique, to launch the Horizon Kinetics ISE Wealth Index (Ticker: RCH).
The Horizon Kinetics ISE Wealth Index includes companies whose senior management has demonstrated a track record of skill and specific industry knowledge that has translated into high levels of long-term shareholder value creation. In many cases, these individuals have also used their respective companies as the primary means for accumulating substantial personal wealth, such as with index components Berkshire Hathaway (Ticker: BRK-B) and Microsoft (Ticker: MSFT). Due to this vested interest factor, these management teams often prioritize the creation of long-term shareholder value and, as a result, outperform the markets. This unique predictive index variable - rather than traditional index classifications - has been demonstrated to provide meaningful excess returns over time versus the S&P 500.
“The innovative Horizon Kinetics ISE Wealth Index is the first benchmark designed to identify insider wealth and distinctive management style as defining predictive index variables across highly varied industries,” said Kris Monaco, ISE’s Head of New Product Development. “We are excited to be partnering with Horizon Kinetics to launch this index, which gives investors broad exposure to high-performance companies possessing these unique characteristics.”
“We believe that the Horizon Kinetics ISE Wealth Index provides exposure to companies whose managements are better aligned with shareholders. Investing alongside such companies has proven to be an excellent way to generate long-term returns,” said Doug Kramer, Chief Executive Officer of Horizon Kinetics LLC.
For more information on ISE indexes, visit www.ise.com/index.
Source:International Securities Exchange (ISE)
