www.etf-radar.com Issue No. 10 ISSN 2150-9166 European Edition June 2011 Feature Covered Call Plays Rankings ETF Landscape At A Glance The Global Magazine People Amundi ETF Valérie Baudson Spotlight ETFs Continues to Climb Institutional Demand for Index Investor Stoxx Europe 600 Tactical Portfolio Update ETF of the Month Sector Map THE HOTSPOTS AT A GLANCE etfRadar SM
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ETF Radar Magazine Issue June 2011 (European Edition)
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September, 20 - 22 2011, Le Méridien Parkhotel Frankfurt, Wiesenhüttenplatz 28-38, D-60329 Frankfurt am Main, Germany
www.terrapinn.com/2011/commodities-de
Frank Schallenberger Head of Commodity ResearchLandesbank Baden-Württemberg
Dajana Brodmann Deputy Head of Alternative InvestmentsBayerische Versorgungskammer
Francisco BlanchHead of Global Commodity Research Bank of America Merrill Lynch
Paul KaplanQuantitative Research DirectorMorningstar Europe
Eugen WeinbergChief Commodities
Commerzbank
Jim RogersAuthor and Investor(Guest of The Royal Bank of Scotland)
Peter Hadasch Head of PensionsNestlé Pensionskassen
Andreas KretschmerCEO Trustee‘s BoardÄrzteversorgung Westfalen-Lippe
Harald TextorBoard MemberWittelsbacher Ausgleichsfonds
Free Admission forInstitutional Investors!
Global insights and opportunities for institutional investors and their partners
Understand what commodities can bring to your portfolio
Discover the latest trends and identify the hottest commodity opportunities for 2012
Hear case studies from leading Pension Funds, Insurance companies and Foundations
TORONTOCanada Cup of Invest. Mgnt. 07–08 June 2011
InterContinental
►
►
MIDDLE EAST: OMAN ETF STOPPEDFalcom Financial Services has postponed the launch of Oman's first ETF. The Saudi investment bank is yet to receive an approval from the Capital Market Authority regarding the launch. The firm cited unfavorable market conditions and the tense political environment in the region as the cause for the delay. Falcom launched its first ETF in Saudi Arabia last year.
ASIA-PACIFIC: INVESTORS HUNGRY FOR SECTOR ETFSInvestors in Asia need more sector-focused ETFs to facilitate tactical asset allocation in regional investments, said market strategists from Dt. Bank, Standard Chartered and Morgan Stanley at the Dynamic Asset Allocation conference in Hong Kong. Hopefully some issuers jump on the bandwagon – and gather assets in local sector ETFs.
►
►
CANADA: CETFA SEEKS NEW MEMBERSCanadian ETF Association (CETFA) is seeking to expand its membership. The newly launched lobby group currently has Bank of Montreal ETFs, Claymore Investment and Horizons ETF as members. First Asset Capital and Invesco Trimark are also expected to join CETFA. The group has extended an open invitation to iShares. CETFA is also considering discussing ETF classification by different classification services.
EUROPE: WORLD‘S FIRST RHODIUM ETC LAUNCHEDDeutsche Bank AG launched the world‘s first physical rhodium ETC. The product is 100% backed by physical rhodium and is designed to track the dollar spot price, minus fees (0.95% p.a.). The physical rhodium that backs the ETC will be kept with Johnson Matthey in the UK.
►
►
US: FIRST ETF LINKED TO MONGOLIAN STOCKSVan Eck Global is seeking to roll out a new Mongolia fund. The Market Vectors Mongolia ETF will hold at least 80% of its assets in companies either based in or listed in Mongolia, or based elsewhere but derive at least half their revenues from business activities in Mongolia. The Central-Asian country owns large amounts of commodities like coal, gold and copper.
US: NEW DOLLAR CURRENCY ETNS LAUNCHEDDeutsche Bank and Invesco PowerShares announced the launch of two new ETNs, which are designed to provide triple long and triple short exposure to futures contracts on the US Dollar Index, an index designed to reflect the value of the US dollar compared with six of the world's most traded currencies. Trading symobls are UUPT and UDNT.
►
►
OVERALL MARKETAt the end of Q1 2011, there were 549 ETFs/ETPs providingexposure to various emerging and frontier markets indices, with 1,119 listings and assets of US$246.4 Bn3 from 110 providers on 40 exchanges in 34 countries. The number of products increased by 7.0% YTD, from 513 at year end 2010 to 549 at the end of Q1 2011. Assets in ETFs/ETPs providing exposure to emerging markets indices decreased by 0.5% YTD to US$246.4 Bn, compared to a 1.7% rise in the MSCI Emerging Markets Index in US dollar terms over the same period.
HIGH YIELD INFLOWS SURGE, BLEEDING IN COMMODITY ETP DIDN‘T STOPHigh yield bond ETP inflows surge while yields sink to record lows. According to recent estimates, High yield fixed income ETPs gathered $3.5bn in new cash in the first five months of this year, running well ahead of 2010 when they attracted $6.5bn over the whole year (see also ETF Radar Magazine, Issue May 2010).
The bleeding in commodity-related exchange-traded products didn’t entirely stop last week, but it sure slowed down. Investors took out a relatively modest $280 million from said ETPs, dropping total assets to $161 billion. But assets are actually about $1 billion higher than last week, due to modest gains in most commodity prices.
ETF RADAR IS A PRIVATE AND INDEPENDENT INFORMATION PROVIDER.
NO STATEMENT IN THIS ISSUE IS TO BE CONSTRUED AS A RECOMMENDATION TO BUY OR SELL SECURITIES OR TO PROVIDE INVESTMENT ADVICE. PLEASE SEE OUR DISCLAIMER PAGE FOR FURTHER INFORMATION.
For all subscription enquiries, thoughts or general questions please contact us directly by email:
The global ETF and ETP industry saw record net inflows totaling USD 25.3 Bn. in April. Little wonder, that worries and concerns have begun to multiply. As we reported in the last issue, three supranational bodies (FSB, IMF and BIS) warned over risk associated with ETFs. The main critic came on sec lending and swap-based products. Meanwhile the discussions instantiated by the “big three regulators” calmed down but a new aspect in trading ETFs appeared.
The latest discussions focus on shorting ETFs: Secondary trading activity of ETFs brings with it the possibility that market participants will short the ETFs themselves. There is no real limit to the short selling which is possible in an ETF in the same way that there is with stocks. In an ETF a short seller could mostly rely on the process of creating shares in the ETF to ensure he can deliver. This could lead to the possibility that a buyer of an ETF share is buying from a short seller and that no new share has yet been created. The short interest data captured in the US-listed securities reflects the exact number of shares that have yet to be repurchased to give back to lenders.
Currently, there are short-selling levels of up to 340% like in the SPDR S&P Retail ETF. Some of these funds show a significant short-ratio over a couple of months. Hence “short” means sometimes long. But this may lead to some problems and surprises – especially in choppy markets. As investors may face new fears in the near future (thanks to Greece, our feature story covers the pros and cons when using ETFs for covered call writing strategies. These strategies have advantages but also drawbacks – like shorting ETFs.
Enjoy reading and let us know your thoughts.
Silvan SchellingHead of Relationship Management
Adam Patti (pg. 12) IndexIQ (pg. 4)
Amundi ETF (pg. 13) Ivesco PowerShares (pg. 3, 4)
Bank of Montreal (pg. 3) Invesco Trimark (pg. 3)
CBOE (pg. 8) Morgan Stanley (pg. 3)
CETFA (pg. 3) SSgA (pg. 4)
Claymore (pg. 3) Standard Chartered (pg. 3)
Commerzbank (pg. 4) Valérie Baudson (pg. 13)
Deutsche Bank (pg. 3) Van Eck (pg. 3)
ETF Securities (pg. 3)
Falcom FS (pg. 3)
First Asset Capital (pg. 3)
Greenwich Ass. (pg. 10)
Horizons (pg. 3)
Institutional Demand for
ETFs Continues to Climb
Global Summary
Industry Highlights
4
Global Round-Up
stnevE detceleS
CHICAGOMorningstar Investment Conference8-10 June 2011McCormick Place
TORONTOCanada Cup of Invest. Mgnt. 07–08 June 2011
InterContinental
►
►
MIDDLE EAST: OMAN ETF STOPPEDFalcom Financial Services has postponed the launch of Oman's first ETF. The Saudi investment bank is yet to receive an approval from the Capital Market Authority regarding the launch. The firm cited unfavorable market conditions and the tense political environment in the region as the cause for the delay. Falcom launched its first ETF in Saudi Arabia last year.
ASIA-PACIFIC: INVESTORS HUNGRY FOR SECTOR ETFSInvestors in Asia need more sector-focused ETFs to facilitate tactical asset allocation in regional investments, said market strategists from Dt. Bank, Standard Chartered and Morgan Stanley at the Dynamic Asset Allocation conference in Hong Kong. Hopefully some issuers jump on the bandwagon – and gather assets in local sector ETFs.
►
►
CANADA: CETFA SEEKS NEW MEMBERSCanadian ETF Association (CETFA) is seeking to expand its membership. The newly launched lobby group currently has Bank of Montreal ETFs, Claymore Investment and Horizons ETF as members. First Asset Capital and Invesco Trimark are also expected to join CETFA. The group has extended an open invitation to iShares. CETFA is also considering discussing ETF classification by different classification services.
EUROPE: WORLD‘S FIRST RHODIUM ETC LAUNCHEDDeutsche Bank AG launched the world‘s first physical rhodium ETC. The product is 100% backed by physical rhodium and is designed to track the dollar spot price, minus fees (0.95% p.a.). The physical rhodium that backs the ETC will be kept with Johnson Matthey in the UK.
►
►
US: FIRST ETF LINKED TO MONGOLIAN STOCKSVan Eck Global is seeking to roll out a new Mongolia fund. The Market Vectors Mongolia ETF will hold at least 80% of its assets in companies either based in or listed in Mongolia, or based elsewhere but derive at least half their revenues from business activities in Mongolia. The Central-Asian country owns large amounts of commodities like coal, gold and copper.
US: NEW DOLLAR CURRENCY ETNS LAUNCHEDDeutsche Bank and Invesco PowerShares announced the launch of two new ETNs, which are designed to provide triple long and triple short exposure to futures contracts on the US Dollar Index, an index designed to reflect the value of the US dollar compared with six of the world's most traded currencies. Trading symobls are UUPT and UDNT.
►
►
OVERALL MARKETAt the end of Q1 2011, there were 549 ETFs/ETPs providingexposure to various emerging and frontier markets indices, with 1,119 listings and assets of US$246.4 Bn3 from 110 providers on 40 exchanges in 34 countries. The number of products increased by 7.0% YTD, from 513 at year end 2010 to 549 at the end of Q1 2011. Assets in ETFs/ETPs providing exposure to emerging markets indices decreased by 0.5% YTD to US$246.4 Bn, compared to a 1.7% rise in the MSCI Emerging Markets Index in US dollar terms over the same period.
HIGH YIELD INFLOWS SURGE, BLEEDING IN COMMODITY ETP DIDN‘T STOPHigh yield bond ETP inflows surge while yields sink to record lows. According to recent estimates, High yield fixed income ETPs gathered $3.5bn in new cash in the first five months of this year, running well ahead of 2010 when they attracted $6.5bn over the whole year (see also ETF Radar Magazine, Issue May 2010).
The bleeding in commodity-related exchange-traded products didn’t entirely stop last week, but it sure slowed down. Investors took out a relatively modest $280 million from said ETPs, dropping total assets to $161 billion. But assets are actually about $1 billion higher than last week, due to modest gains in most commodity prices.
ETF RADAR IS A PRIVATE AND INDEPENDENT INFORMATION PROVIDER.
NO STATEMENT IN THIS ISSUE IS TO BE CONSTRUED AS A RECOMMENDATION TO BUY OR SELL SECURITIES OR TO PROVIDE INVESTMENT ADVICE. PLEASE SEE OUR DISCLAIMER PAGE FOR FURTHER INFORMATION.
For all subscription enquiries, thoughts or general questions please contact us directly by email:
The global ETF and ETP industry saw record net inflows totaling USD 25.3 Bn. in April. Little wonder, that worries and concerns have begun to multiply. As we reported in the last issue, three supranational bodies (FSB, IMF and BIS) warned over risk associated with ETFs. The main critic came on sec lending and swap-based products. Meanwhile the discussions instantiated by the “big three regulators” calmed down but a new aspect in trading ETFs appeared.
The latest discussions focus on shorting ETFs: Secondary trading activity of ETFs brings with it the possibility that market participants will short the ETFs themselves. There is no real limit to the short selling which is possible in an ETF in the same way that there is with stocks. In an ETF a short seller could mostly rely on the process of creating shares in the ETF to ensure he can deliver. This could lead to the possibility that a buyer of an ETF share is buying from a short seller and that no new share has yet been created. The short interest data captured in the US-listed securities reflects the exact number of shares that have yet to be repurchased to give back to lenders.
Currently, there are short-selling levels of up to 340% like in the SPDR S&P Retail ETF. Some of these funds show a significant short-ratio over a couple of months. Hence “short” means sometimes long. But this may lead to some problems and surprises – especially in choppy markets. As investors may face new fears in the near future (thanks to Greece, our feature story covers the pros and cons when using ETFs for covered call writing strategies. These strategies have advantages but also drawbacks – like shorting ETFs.
Enjoy reading and let us know your thoughts.
Silvan SchellingHead of Relationship Management
Adam Patti (pg. 12) IndexIQ (pg. 4)
Amundi ETF (pg. 13) Ivesco PowerShares (pg. 3, 4)
Bank of Montreal (pg. 3) Invesco Trimark (pg. 3)
CBOE (pg. 8) Morgan Stanley (pg. 3)
CETFA (pg. 3) SSgA (pg. 4)
Claymore (pg. 3) Standard Chartered (pg. 3)
Commerzbank (pg. 4) Valérie Baudson (pg. 13)
Deutsche Bank (pg. 3) Van Eck (pg. 3)
ETF Securities (pg. 3)
Falcom FS (pg. 3)
First Asset Capital (pg. 3)
Greenwich Ass. (pg. 10)
Horizons (pg. 3)
Institutional Demand for
ETFs Continues to Climb
Index Investor
In May the STOXX 600 Index fell -0.96%. Is 2011 once again a May. The Automobiles and Parts Index was the worst performing year that approves the phrase “Sell in May and go away”? with a loss of -3.83% in May 2011. If investors believe in a recovery, Having a look at the sector performances you can clearly see a the contrarian pick with the beginning sector rotation as market participants believe that would be the best the economy is moving from late expansion to early choice. Best performing sector with a performance of +6.47% in contraction. Usually basic materials and energy stocks May 2011 was the STOXX 600 Health Care Index. If you believe in perform best in late expansion and consumer staple stocks an ongoing trend, the db x-trackers best in early contraction. Exactly this situation appeared in would be your best pick. .
ComStage ETF STOXX Europe 600 Automobiles & Parts (LU0378435043)
STOXX Europe 600 Health
Care ETF (LU0292103222) n
European investors shift their sector preferencesby Sebastian Stahn
The Action Plan
Stoxx 600 Sector Map
6
CONTRARIAN PICK BEST-TREND PICK
HIGH LOW LOWXSDR. GY
ComStage ETF STOXX® Europe 600 Auto & PartsISIN/Ticker: LU0378435043TER / AUM: 0.25% / 22mn.1 Year Return: +46.39%Last Price/High/Low 52-Weeks: EUR 50.70 / 34.22 / 53.80Replication: Synthetic
db x-trackers STOXX Europe 600 Health Care ETFISIN/TIcker: LU0292103222TER / AUM: 0.30% / 231.8mn. 1 Year Return: +19.33%Last Price/High/Low 52-Weeks: EUR 61.39 / 50.97 / 61.39Replication: Synthetic
RISK-REWARD-ANALYSISbased on an investment horizon of one month
RISK-REWARD-ANALYSISbased on an investment horizon of one month
ETF Radar Magazine | Issue June 2011
CBSXAR.GYHIG
stnevE detceleS
Global Summary
5
Top10 Global Index Provider(Ranked by AuM)
Hot Product Debuts
► FIRST WAVE OF NEW SPDR ETFSState Street Global Advisorshas launched eight new ETFs at Deutsche Börse's Xetra platform. The portfolio includes seven equity-index ETFs and one bond-index ETF. The launch also includes five emerging markets equity ETFs, as well as the first local currency emerging market debt ETF to be listed in Europe. SSgA’s ETFs are intended as the first wave of a fresh assault on the European market.
FRANKFURTETF & Indexing Deutschland20-22 June 2011Radisson Blu Hotel
MADRIDETF & Indexing Espana15-16 Jun 2011Melia Ave. America Hotel
Sources: Event organizers, Reuters, BusinessWire, BlackRock, ETF Radar Global Research
Number Cruncher
Yield spread of crippled Greek vs. German 10-year bonds as of May, 27 2011.
► FIRST S-DAX ETF LAUNCHED Commerzbank, Germany's second largest bank, has launched an ETF linked to the country's S-DAX, making it the first product worldwide to replicate the small-cap index. The ComStage ETF SDAX TR replicates the performance of the SDAX, which comprises 50 German smallcaps stocks. ComStage, Commerzbank's ETF brand, has ca. USD 9.2 billion assets under management, making it Europe's seventh-largest ETF player.
Ticker/ISIN: LU0603942888TER: 0.70% p.a.CCY: EUR
↑
↑
→
→
► HK SMALL CAP ETF LAUNCHEDIndexIQ recently launched the first ETF dedicated to providing access to Hong Kong’s dynamic small-cap sector. HKK‘s expense ratio is fair priced compared to already available HK blue-chip ETFs. The fund has a strong exposure to Consumer Discretionary stocks and Financial companies. Investors should be aware of that this ETF trades small cap equities. Hence in volatile times increased spreads are possible.
Ticker/ISIN: HKKTER: 0.69% p.a.CCY: USD
Best 1 Month performance in May 2011, achieved by ProShares Ultra Silver ETF.
SINGAPOREWorld Islamic Conference8-9 June 2011Pan Pacific Hotel
ETF Radar Magazine | Issue June 2011
► NEW CONVERTIBLE ETFInvesco PowerShares is launching the PowerShares Convertible Securities ETF. The fund, which is likely to issue monthly distributions, will be linked to the BofA ML All U.S. Convertibles Index and will invest at least 80% of its assets in the component securities that comprise the convertibles index, which is designed to track the performance of USD-denominated investment grade and non-investment grade convertible.
Ticker/ISIN: CVRTTER: 0.35% p.a.CCY: USD
MSCI 25.5%
S&P 23%
Barclays Capital 8.1%
STOXX 7.2%
Russell 6%
FTSE 4.3%
Dow Jones 3.8%
Markit 3.3%
NASDAQ OMX 2.6%
NYSE Euronext 1.2%
Other 15.0%
HONG KONGETF Index Investment Summit 201131 Aug. - 1 Sept. 2011JW Marriot Hotel
In May the STOXX 600 Index fell -0.96%. Is 2011 once again a May. The Automobiles and Parts Index was the worst performing year that approves the phrase “Sell in May and go away”? with a loss of -3.83% in May 2011. If investors believe in a recovery, Having a look at the sector performances you can clearly see a the contrarian pick with the beginning sector rotation as market participants believe that would be the best the economy is moving from late expansion to early choice. Best performing sector with a performance of +6.47% in contraction. Usually basic materials and energy stocks May 2011 was the STOXX 600 Health Care Index. If you believe in perform best in late expansion and consumer staple stocks an ongoing trend, the db x-trackers best in early contraction. Exactly this situation appeared in would be your best pick. .
ComStage ETF STOXX Europe 600 Automobiles & Parts (LU0378435043)
STOXX Europe 600 Health
Care ETF (LU0292103222) n
European investors shift their sector preferencesby Sebastian Stahn
The Action Plan
Stoxx 600 Sector Map
6
CONTRARIAN PICK BEST-TREND PICK
HIGH LOW LOWXSDR. GY
ComStage ETF STOXX® Europe 600 Auto & PartsISIN/Ticker: LU0378435043TER / AUM: 0.25% / 22mn.1 Year Return: +46.39%Last Price/High/Low 52-Weeks: EUR 50.70 / 34.22 / 53.80Replication: Synthetic
db x-trackers STOXX Europe 600 Health Care ETFISIN/TIcker: LU0292103222TER / AUM: 0.30% / 231.8mn. 1 Year Return: +19.33%Last Price/High/Low 52-Weeks: EUR 61.39 / 50.97 / 61.39Replication: Synthetic
RISK-REWARD-ANALYSISbased on an investment horizon of one month
RISK-REWARD-ANALYSISbased on an investment horizon of one month
ETF Radar Magazine | Issue June 2011
CBSXAR.GYHIG
stnevE detceleS
Global Summary
5
Top10 Global Index Provider(Ranked by AuM)
Hot Product Debuts
► FIRST WAVE OF NEW SPDR ETFSState Street Global Advisorshas launched eight new ETFs at Deutsche Börse's Xetra platform. The portfolio includes seven equity-index ETFs and one bond-index ETF. The launch also includes five emerging markets equity ETFs, as well as the first local currency emerging market debt ETF to be listed in Europe. SSgA’s ETFs are intended as the first wave of a fresh assault on the European market.
FRANKFURTETF & Indexing Deutschland20-22 June 2011Radisson Blu Hotel
MADRIDETF & Indexing Espana15-16 Jun 2011Melia Ave. America Hotel
Sources: Event organizers, Reuters, BusinessWire, BlackRock, ETF Radar Global Research
Number Cruncher
Yield spread of crippled Greek vs. German 10-year bonds as of May, 27 2011.
► FIRST S-DAX ETF LAUNCHED Commerzbank, Germany's second largest bank, has launched an ETF linked to the country's S-DAX, making it the first product worldwide to replicate the small-cap index. The ComStage ETF SDAX TR replicates the performance of the SDAX, which comprises 50 German smallcaps stocks. ComStage, Commerzbank's ETF brand, has ca. USD 9.2 billion assets under management, making it Europe's seventh-largest ETF player.
Ticker/ISIN: LU0603942888TER: 0.70% p.a.CCY: EUR
↑
↑
→
→
► HK SMALL CAP ETF LAUNCHEDIndexIQ recently launched the first ETF dedicated to providing access to Hong Kong’s dynamic small-cap sector. HKK‘s expense ratio is fair priced compared to already available HK blue-chip ETFs. The fund has a strong exposure to Consumer Discretionary stocks and Financial companies. Investors should be aware of that this ETF trades small cap equities. Hence in volatile times increased spreads are possible.
Ticker/ISIN: HKKTER: 0.69% p.a.CCY: USD
Best 1 Month performance in May 2011, achieved by ProShares Ultra Silver ETF.
SINGAPOREWorld Islamic Conference8-9 June 2011Pan Pacific Hotel
ETF Radar Magazine | Issue June 2011
► NEW CONVERTIBLE ETFInvesco PowerShares is launching the PowerShares Convertible Securities ETF. The fund, which is likely to issue monthly distributions, will be linked to the BofA ML All U.S. Convertibles Index and will invest at least 80% of its assets in the component securities that comprise the convertibles index, which is designed to track the performance of USD-denominated investment grade and non-investment grade convertible.
Ticker/ISIN: CVRTTER: 0.35% p.a.CCY: USD
MSCI 25.5%
S&P 23%
Barclays Capital 8.1%
STOXX 7.2%
Russell 6%
FTSE 4.3%
Dow Jones 3.8%
Markit 3.3%
NASDAQ OMX 2.6%
NYSE Euronext 1.2%
Other 15.0%
HONG KONGETF Index Investment Summit 201131 Aug. - 1 Sept. 2011JW Marriot Hotel
QUICK FACTS seven months, some economists argued. The market has Increasing fears among investors may lead to experienced a drawback in May due to these concerns. First
shaky markets in the near future. quarter U.S. GDP growth was weak at 1.8% and global Implementing covered call strategies would allow unemployment and housing concerns persist.
investors to hedge their portfolio partly against a drop-down of the markets. New fears in the markets
One of the bigger issues is the European debt crisis. Chances As we come to the mid way point of the year, we can see are increasing that Greece will have to renegotiate debt. the market has essentially moved sideways with high Credit spreads of Greek government bonds soared. volatility. As of May 26th, the S&P 500 is up over 5% for European Central Bank Board member Lorenzo Bini the year. The CBOE VIX volatility index trades currently Smaghi said recently that talk about Greece reneging on at 15 points which is pretty close to all time low of 2007. debt commitments “has been very damaging” and The major question is “how will the market perform suggested “that investing in the euro area is unsafe.” Even for through the next quarter?” No one can say there isn't a a country that flouted eurozone fiscal rules for a decade, “a lot on the minds of the average investor. The pressing debt restructuring, or exiting the euro, would be like the questions are: Will gas prices stay at their current level death penalty – which we have abolished in the European or possibly increase? Will the U.S. and world economies Union,” he said. continue to grow? How will the unemployment situation shake out through the remainder of the year? The ECB has already bought about 45 billion euros in Greek Employers in the States probably hired fewer workers in government bonds in the past year but Bini Smaghi said the May 2011 and factory orders grew at the slowest pace in impact of a default would fall largely on eurozone national >
►
►
by David Cohne
One way to add some protection to your portfolio is by employing a covered call strategy. ETFs offer an easy way to add buy-write insurance to a portfolio – espcially in a gradually rising or choppy market. But there are also some drawbacks.
Covered Call Plays
HIGH
ETF Radar Magazine | Issue June 2011
QUICK FACTS and (14,60%). Most pharma stocks in the Health Care Stocks still with high MSCI HC Index have performed very
upside potential. . European stocks fell well since April and the investment Despite the crisis in Southern this week and the Euro tumbled with outlook remains bullish for the next
Europe, the consumer sector remains Greek sovereign debt fears coming back months. From a technical point of view, attractive . to the fore and recent economic data the above mentioned trio may climb
signaling that the recovery of developed above their current resistance levels. The ETF Radar Tactical portfolio is a economies may not be as robust as model portfolio that invests in five thought. Meanwhile, Moody's cut its ETFs based on an individual tactical rating on Greece by three notches to ETF rankings system maintained by Caa1. Hence we expect that the markets Cohne Investment Group. The become shaky and volatitlity levels may portfolio trades at the end of each increase.month. The holdings for June include
Based on the rankings , is the ETF of
, the month. The fund is dominated by three well-known pharma stocks:
, Novartis (16,11%), its local rival Roche (14,65%) and GlaxoSmithKline
►
►
(FR0010833558) SPDR MSCI E u r o p e S m a l l C a p E T F (FR0010149880)
SPDR MSCI Europe Health Care SPDR MSCI (FR0000001737) Amundi ETF Europe Health Care ETFMSCI Switzerland (FR0010655753)SPDR MSCI Europe Consumer Staples ETF (FR0000001745) Lyxor ETF MSCI Europe Real Estate
n
Index Investor
Tactical Portfolio Update
by David Cohne
Bullish outlook for Health Careand Consumer Staples
ETF Radar Tactical Portfolio
Source: Cohne Investment Group, exclusively for ETF Radar / June 1, 2011 Ranking
7
ETF of the Month
SPDR MSCI Europe Health Care ETF
52-Week Range $62.55-$51.61 Market Cap $43.6 millionDividends -TER 0.30% p.a.Last Volume n/a ETF Issuer SPDRs EuropeReplication Full Replication
(FR0000001737)
ETF Radar Magazine | Issue June 2011
TICKER ETF NAME TER AUM WEIGHT
FR0000001737 SPDR MSCI Europe Health Care ETF 0.30% $43.6 million 20%
FR0010655753 Amundi ETF MSCI Switzerland 0.25% $51.7 million 20%
FR0000001745 SPDR MSCI Europe Consumer Staples ETF 0.25% $20.3 million 20%
FR0010833558 Lyxor ETF MSCI Europe Real Estate 0.40% $31.0 million 20%
FR0010149880 SPDR MSCI Europe Small Cap ETF 0.40% $5.3 million 20%
8
Feature
QUICK FACTS seven months, some economists argued. The market has Increasing fears among investors may lead to experienced a drawback in May due to these concerns. First
shaky markets in the near future. quarter U.S. GDP growth was weak at 1.8% and global Implementing covered call strategies would allow unemployment and housing concerns persist.
investors to hedge their portfolio partly against a
drop-down of the markets. New fears in the markets
One of the bigger issues is the European debt crisis. Chances As we come to the mid way point of the year, we can see are increasing that Greece will have to renegotiate debt. the market has essentially moved sideways with high Credit spreads of Greek government bonds soared. volatility. As of May 26th, the S&P 500 is up over 5% for European Central Bank Board member Lorenzo Bini the year. The CBOE VIX volatility index trades currently Smaghi said recently that talk about Greece reneging on at 15 points which is pretty close to all time low of 2007. debt commitments “has been very damaging” and The major question is “how will the market perform suggested “that investing in the euro area is unsafe.” Even for through the next quarter?” No one can say there isn't a a country that flouted eurozone fiscal rules for a decade, “a lot on the minds of the average investor. The pressing debt restructuring, or exiting the euro, would be like the questions are: Will gas prices stay at their current level death penalty – which we have abolished in the European or possibly increase? Will the U.S. and world economies Union,” he said. continue to grow? How will the unemployment
situation shake out through the remainder of the year? The ECB has already bought about 45 billion euros in Greek
Employers in the States probably hired fewer workers in government bonds in the past year but Bini Smaghi said the
May 2011 and factory orders grew at the slowest pace in impact of a default would fall largely on eurozone national >
►
►
by David Cohne
One way to add some protection to your portfolio is by employing a covered call strategy. ETFs offer an easy way to add buy-write insurance to a portfolio – espcially in a gradually rising or choppy market. But there are also some drawbacks.
Covered Call Plays
HIGH
ETF Radar Magazine | Issue June 2011
QUICK FACTS and (14,60%). Most pharma stocks in the Health Care Stocks still with high MSCI HC Index have performed very
upside potential. . European stocks fell well since April and the investment Despite the crisis in Southern this week and the Euro tumbled with outlook remains bullish for the next
Europe, the consumer sector remains Greek sovereign debt fears coming back months. From a technical point of view, attractive . to the fore and recent economic data the above mentioned trio may climb
signaling that the recovery of developed above their current resistance levels. TThe ETF Radar Tactical portfolio is a economies may not be as robust as model portfolio that invests in five thought. Meanwhile, Moody's cut its ETFs based on an individual tactical rating on Greece by three notches to ETF rankings system maintained by Caa1. Hence we expect that the markets Cohne Investment Group. The become shaky and volatitlity levels may portfolio trades at the end of each increase.month. The holdings for June include
Based on the rankings , is the ETF of
, the month. The fund is dominated by three well-known pharma stocks:
, Novartis (16,11%), its local rival Roche (14,65%) and GlaxoSmithKline
►
►
(FR0010833558) SPDR MSCI E u r o p e S m a l l C a p E T F (FR0010149880)
SPDR MSCI Europe Health Care SPDR MSCI (FR0000001737) Amundi ETF Europe Health Care ETFMSCI Switzerland (FR0010655753)SPDR MSCI Europe Consumer Staples ETF (FR0000001745) Lyxor ETF MSCI Europe Real Estate
n
Index Investor
Tactical Portfolio Update
by David Cohne
Bullish outlook for Health Careand Consumer Staples
ETF Radar Tactical Portfolio
Source: Cohne Investment Group, exclusively for ETF Radar / June 1, 2011 Ranking
7
ETF of the Month
SPDR MSCI Europe Health Care ETF
52-Week Range $62.55-$51.61 Market Cap $43.6 millionDividends -TER 0.30% p.a.Last Volume n/a ETF Issuer SPDRs EuropeReplication Full Replication
(FR0000001737)
ETF Radar Magazine | Issue June 2011
TICKER ETF NAME TER AUM WEIGHT
FR0000001737 SPDR MSCI Europe Health Care ETF 0.30% $43.6 million 20%
FR0010655753 Amundi ETF MSCI Switzerland 0.25% $51.7 million 20%
FR0000001745 SPDR MSCI Europe Consumer Staples ETF 0.25% $20.3 million 20%
FR0010833558 Lyxor ETF MSCI Europe Real Estate 0.40% $31.0 million 20%
FR0010149880 SPDR MSCI Europe Small Cap ETF 0.40% $5.3 million 20%
Spotlight
A recent investment study, Institutionals bullish on ETFs trader at an asset management firm performed by Stamford-based Nearly 50% of asset management firms with more than USD 250 billion AuM Greenwich Associates, reveals that interviewed expect to increase explained “If we have a fund with institutionals are increasingly bullish portfolio allocations to ETFs between inflows, we may buy an ETF before we on using Exchange-Traded Funds in now and the year 2013. Of those, decide to invest in an underlying area. their portfolios. Nearly one-half of slightly more than half expect to It's a far better option than parking the asset management firms and one- increase ETF allocations by 5% or the money in cash.” Approximately third of the institutional funds taking more. More important: Not a single 45% of participating institutional part in the study of current asset manager plans to cut ETF funds and 40% of asset managers use institutional ETF users, plan to allocations in the coming two years! ETFs as part of their regular increase the share of portfolio assets About 60% of asset managers said, they rebalancing procedures. Roughly 45% they invest in ETFs over the next two use ETFs to add alpha through tactical of participating institutional funds years. applications and about a quarter use and 40% of asset managers use ETFs
them to achieve strategic allocation to make tactical adjustments to their The research paper‘s outcome is ranges. portfolios. based on interviews conducted between February and April 2011 Multiple Usage Perfect heding instrumentwith 45 institutionals, including More specifically, institutions use ETFs In addition to the largely tactical uses, corporate pensions, public pensions, for several critical functions. 75% of the study respondents also note using endowments and foundations, as asset managers and half of the ETFs for more strategic purposes, well as 25 large asset management institutional funds use ETFs for cash such as hedging. In particular, 30% of firms in the United States. equitization or interim beta. A head participating asset managers and
10
by Tom Benson
ETFs are playing an increasingly important role in the portfolios of U.S. institutional investors. More and more institutional investors are adopting ETFs as a flexible, multi-purpose tool. The perception of ETFs as a retail product seems clearly out of date.
HIGH
ETF Radar Magazine | Issue June 2011
9
Feature
ETF Radar Magazine | Issue June 2011
Institutional Demand for ETFs Continues to Climb
%
HIGH
central banks, rather than the ECB, and ultimately on taxpayers. “We care about taxpayers’ money and this is What is a buy-write index?why we warn against restructuring. We seem to be the Implementing this strategy can be difficult in a retail only ones,” he said. On Wednesday, Moodys account since the need for a margin account setup. This is downgraded Greece's local and foreign currency bond solved by investing directly in a covered call ETF. Currently ratings deeper into junk status, citing heightened risk you can track the S&P 500 Index with two exchange traded that the country will fail to stabilise its debt position products linked to the CBOE S&P 500 BuyWrite Index, without a debt restructuring. commonly known as the BXM Index. This is a benchmark
index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. The BXM is a passive total return index based on buying an S&P 500 stock index portfolio, and "writing" (or selling) the near-term S&P 500 Index "covered" call option, generally on the third Friday of each month. The SPX call written will have about one month remaining to expiration, with an exercise price just above the prevailing index level (i.e., slightly out of the
Portfolio insurance – for sideway markets money). The SPX call is held until expiration and cash Many of these factors could lead to a drop in the markets settled, at which time a new one-month, near-the-money or markets could trade sideways. One way to add some call is written. First ETF we analyzed is the protection to your portfolio is by employing a covered and second is the call strategy. This works well in sideways markets. A . The ETN has a 30-covered call or buy-write is a strategy when you go long year maturity and is a senior, unsecured, unsubordinated on a security or index and sell call options on that same debt security issued by Barclays Bank. PowerShares had security or index. This provides some insurance for your also launched an ETF that tracked the NASDAQ 100, but portfolio by reducing volatility and increasing income. has since liquidated it.One word of caution: Your returns will be less on the upside and that this won't provide you a full hedge. It's a ETFs to Watchstrategy that can be used in conjunction with other The hedges such stop losses, inverse ETFs and cash. tracks the CBOE S&P 500 BuyWrite Index. It was launched
on 12/20/2007. PBP has an expense ratio of 0.75% p.a. and $118 Million under management. Top holdings include Exxon Mobil Corp. (XOM), Apple Inc. (AAPL), Chevron Corp. (CVX), General Electric Co. (GE) and International Business Machines Corp (IBM). Technology and financials are the largest sectors of the portfolio which is up 2.9% for the year through May 26th. Investors morely exposed to the European markets should think aobut
. This fund tracks the performance of the DAXplus Covered Call strategy index. The ETF is listed on Frankfurt stock exchange and has an expense ratio of 0.45% p.a. – much lower than its peer linked to the BXM. The basic idea behind this index is mostly the same.
The preceding funds offer an easy way to add buy-write insurance to your portfolio. Nevertheless you should remind that hedging has drawbacks. As mentioned above, both ETFs work best in a gradually rising or choppy market. Indeed, both products will probably underperform when the volatility is low and investor sentiment is high.
BETTER BUT NOT BESTPerformance Comparison Of Selected Buy-Write ETFs vs. S&P500
0%
-10%
-20%
-30%
-40%
-50%
-60%
2007 2011
HYG
2009 2010
BWV
PBP
S&P500
2008
“”
This strategy provides insurance for your portfolio by reducing volatility and increasing income.
Spotlight
A recent investment study, Institutionals bullish on ETFs trader at an asset management firm performed by Stamford-based Nearly 50% of asset management firms with more than USD 250 billion AuM Greenwich Associates, reveals that interviewed expect to increase explained “If we have a fund with institutionals are increasingly bullish portfolio allocations to ETFs between inflows, we may buy an ETF before we on using Exchange-Traded Funds in now and the year 2013. Of those, decide to invest in an underlying area. their portfolios. Nearly one-half of slightly more than half expect to It's a far better option than parking the asset management firms and one- increase ETF allocations by 5% or the money in cash.” Approximately third of the institutional funds taking more. More important: Not a single 45% of participating institutional part in the study of current asset manager plans to cut ETF funds and 40% of asset managers use institutional ETF users, plan to allocations in the coming two years! ETFs as part of their regular increase the share of portfolio assets About 60% of asset managers said, they rebalancing procedures. Roughly 45% they invest in ETFs over the next two use ETFs to add alpha through tactical of participating institutional funds years. applications and about a quarter use and 40% of asset managers use ETFs
them to achieve strategic allocation to make tactical adjustments to their The research paper‘s outcome is ranges. portfolios. based on interviews conducted between February and April 2011 Multiple Usage Perfect heding instrumentwith 45 institutionals, including More specifically, institutions use ETFs In addition to the largely tactical uses, corporate pensions, public pensions, for several critical functions. 75% of the study respondents also note using endowments and foundations, as asset managers and half of the ETFs for more strategic purposes, well as 25 large asset management institutional funds use ETFs for cash such as hedging. In particular, 30% of firms in the United States. equitization or interim beta. A head participating asset managers and
10
by Tom Benson
ETFs are playing an increasingly important role in the portfolios of U.S. institutional investors. More and more institutional investors are adopting ETFs as a flexible, multi-purpose tool. The perception of ETFs as a retail product seems clearly out of date.
HIGH
ETF Radar Magazine | Issue June 2011
9
Feature
ETF Radar Magazine | Issue June 2011
Institutional Demand for ETFs Continues to Climb
%
HIGH
central banks, rather than the ECB, and ultimately on taxpayers. “We care about taxpayers’ money and this is What is a buy-write index?why we warn against restructuring. We seem to be the Implementing this strategy can be difficult in a retail only ones,” he said. On Wednesday, Moodys account since the need for a margin account setup. This is downgraded Greece's local and foreign currency bond solved by investing directly in a covered call ETF. Currently ratings deeper into junk status, citing heightened risk you can track the S&P 500 Index with two exchange traded that the country will fail to stabilise its debt position products linked to the CBOE S&P 500 BuyWrite Index, without a debt restructuring. commonly known as the BXM Index. This is a benchmark
index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. The BXM is a passive total return index based on buying an S&P 500 stock index portfolio, and "writing" (or selling) the near-term S&P 500 Index "covered" call option, generally on the third Friday of each month. The SPX call written will have about one month remaining to expiration, with an exercise price just above the prevailing index level (i.e., slightly out of the
Portfolio insurance – for sideway markets money). The SPX call is held until expiration and cash Many of these factors could lead to a drop in the markets settled, at which time a new one-month, near-the-money or markets could trade sideways. One way to add some call is written. First ETF we analyzed is the protection to your portfolio is by employing a covered and second is the call strategy. This works well in sideways markets. A . The ETN has a 30-covered call or buy-write is a strategy when you go long year maturity and is a senior, unsecured, unsubordinated on a security or index and sell call options on that same debt security issued by Barclays Bank. PowerShares had security or index. This provides some insurance for your also launched an ETF that tracked the NASDAQ 100, but portfolio by reducing volatility and increasing income. has since liquidated it.One word of caution: Your returns will be less on the upside and that this won't provide you a full hedge. It's a ETFs to Watchstrategy that can be used in conjunction with other The hedges such stop losses, inverse ETFs and cash. tracks the CBOE S&P 500 BuyWrite Index. It was launched
on 12/20/2007. PBP has an expense ratio of 0.75% p.a. and $118 Million under management. Top holdings include Exxon Mobil Corp. (XOM), Apple Inc. (AAPL), Chevron Corp. (CVX), General Electric Co. (GE) and International Business Machines Corp (IBM). Technology and financials are the largest sectors of the portfolio which is up 2.9% for the year through May 26th. Investors morely exposed to the European markets should think aobut
. This fund tracks the performance of the DAXplus Covered Call strategy index. The ETF is listed on Frankfurt stock exchange and has an expense ratio of 0.45% p.a. – much lower than its peer linked to the BXM. The basic idea behind this index is mostly the same.
The preceding funds offer an easy way to add buy-write insurance to your portfolio. Nevertheless you should remind that hedging has drawbacks. As mentioned above, both ETFs work best in a gradually rising or choppy market. Indeed, both products will probably underperform when the volatility is low and investor sentiment is high.
BETTER BUT NOT BESTPerformance Comparison Of Selected Buy-Write ETFs vs. S&P500
0%
-10%
-20%
-30%
-40%
-50%
-60%
2007 2011
HYG
2009 2010
BWV
PBP
S&P500
2008
“”
This strategy provides insurance for your portfolio by reducing volatility and increasing income.
12
People
Expert Talk with
VITA
►►►
► ►
Born: 1971 Lives in: Paris Area
My first ETF, I bought in June 2008My favourite investments: Amundi ETFs
Career:Valérie has been Managing Director of Amundi ETF since December 2007. Amundi is one of the largest asset managers in the world with almost €700bn of AUM. It is 75/25% owned by Credit Agricole and Societe Generale. Prior to joining Amundi, Valerie spent eight years at Crédit Agricole Cheuvreux, the European stockbroking subsidiary of Crédit Agricole Group. From 2004 to 2007, she was Marketing Director and a Member of the European Management Committee and from 2001 to 2004 she held the position of Company Secretary and was a Member of the Management Committee. Valérie joined Crédit Agricole Cheuvreux in 1999 as Project Manager for the Senior Management team. Valérie started her career at Banque Indosuez where she managed international audit missions from 1995 to 1999. She is a graduate from HEC (Haute Ecole de Commerce, Paris) where she majored in Finance.
Valerie Baudson
The average total expense R e c e n t l y A m u n d i w a s ratio for your products associated with a "price war amounts to 27 basis points over European ETFs". Is against an average of 36 bps Amundi the coming Tesco of for rival European providers. the ETF business?Also Amundi has a smaller- Our primary concern is to offer than-average tracking error E u r o p e a n i n s t i t u t i o n a l against most competitors. investors a cost efficient with What is the secret behind high quality standard to answer these figures? their needs. The quality of our Right at the beginning, when we products is reflected through launched Amundi ETF in the choice of the index used as September 2008, we decided to well as the quality of replication, implement a competitive ie tracking error. We also pricing strategy. Cost is a key commit to filling in the gaps in criteria when selecting an ETF; the market by launching our TER is on average 25% lower innovative products. We take a than that of our competitors. very pragmatic approach to And, in addition to TERs, we innovation - innovation does carefully monitor bid/offer not mean complexity.spreads with our market makers to make them as tight as possible. We set up very close relationships with market markers such as Morgan Stanley, Merrill Lynch and Goldman Sachs, selected for their ETF trading experience and quality of service.
Which replication method you implemented for your ETFs?We decided to favour synthetic Who is Amundi's primary replication at it produces the swap counterpart for the lowest tracking error as well as synthetic (swap) replicated the lowest costs to investors. products?
The Grand Dame of Europe‘s ETF business talks about monitoring of bid/offer spreads , pragmatic approaches and provides a preview about Amundi‘s next product wave.
by Silvan Schelling
Managing Director,AmundiETF
“
”
We pragmatic approach to innovation - innovation does not mean complexity.
take a very
ETF Radar Magazine | Issue June 2011
´
11
Spotlight
about 1 in 10 institutional funds use w i th approx imate ly 85% o f For institutional funds, expense ETFs as part of hedging programs. A participating asset managers and 78% ratios almost match liquidity in terms quoted study participant from a $450 of participating institutional funds of importance when selecting an ETF million cultural endowment explains purchasing iShares ETFs. Among asset provider or a specific ETF product. the role ETFs play in his fund's managers, 55% of participants use Almost 60% of institutional funds hedging strategies. The fund views SPDRs (State Street Global Advisors), include expense ratios in their list of its $20 million investment in a gold 45% use Vanguard, and 35% use the three most important factors ETF as long-term investment and a BLDRs/Powershares. Among insti- considered when assessing ETF core part of its overall hedging tutional funds, 44% use SPDRs, 29% providers. Ranked a close third in program. use ETFs of Vanguard, and 7% use importance in picking an ETF
BLDRs/Powershares. provider is tracking error, which is cited as an important selection
Three factors in focus criterion.Asset managers focus on three additional factors when assessing potential ETF providers: tracking error (cited by 63% of asset managers), expense ratios (cited by 58%), and the benchmarks used by the provider in individual funds (cited by 47%). Rounding out the top five factors considered by asset managers when selecting an ETF provider is the overall strength of the fund company and management behind the funds.
Short holding periodsIn keeping with the tactical applications favored by asset managers, 40% of participating professionals said they typically hold ETF investments for 1–6 months and 40% say their typical holding periods are shorter than one month. In contrast, about a quarter of participating institutional funds Finally, the perception of ETFs as a report average holding periods of 1–6 retail dominated product is (more or months, a quarter typically hold ETF less) clearly out of date. ETFs have investments for 7–12 months, and slowly but steadily gained acceptance slightly more than one-third report as an important multi-purpose tool in average holding periods of a year or institutional portfolios – but not only more. in the US. The survey shows that
institutionals with experience using Top ETF Providers to U.S. ETFs in their portfolios will increase Institutional Investors their level of investment and activity Given the importance of scale and in ETFs in the next few years. Hence trading volume in the ETF business, the ETF industry should be well a few very large providers dominate prepared for more, good questions the institutional market. The boss and requests from increasingly among them is iShares/BlackRock, sophisticated product users. n
ETF Radar Magazine | Issue June 2011
BEYOND OLD SCHOOL ASSET MANAGEMENTETF Applications in Institutional Portfolios
THE KEY FACTORS FOR INSTITUTONLASMost Important Selection Criteria
Transitions
Asset Managers
Asset Managers
Institutional Funds
Institutional Funds
Cash equitization
Rebalancing
Tactical adjustments
Core/Satellite
Portfolio completion
Hedging
ETF overlay/Liquidity
Other
0% 20% 40% 60% 80%
0% 25% 50% 75% 100%
Source: Greenwich Associates as of May, 2011
Source: Greenwich Associates as of May, 2011
MOSTLY A SHORT TIME INVESTMENTTypical ETF Holding Period
Asset Managers
Up to 1 month
Institutional Funds
Source: Greenwich Associates as of May, 2011
12%
41%
41%
26%
38%
18%
24%
1 – 6 months 7 – 12 months 1 year and longer
Liquidity/trading volume
Expense ratio of fund
Tracking Error
Fund company and management behind funds
Track record of fund
Benchmark used
Servicing by sponsoring company
Breadth of ETF offerings
12
People
Expert Talk with
VITA
►►►
► ►
Born: 1971 Lives in: Paris Area
My first ETF, I bought in June 2008My favourite investments: Amundi ETFs
Career:Valérie has been Managing Director of Amundi ETF since December 2007. Amundi is one of the largest asset managers in the world with almost €700bn of AUM. It is 75/25% owned by Credit Agricole and Societe Generale. Prior to joining Amundi, Valerie spent eight years at Crédit Agricole Cheuvreux, the European stockbroking subsidiary of Crédit Agricole Group. From 2004 to 2007, she was Marketing Director and a Member of the European Management Committee and from 2001 to 2004 she held the position of Company Secretary and was a Member of the Management Committee. Valérie joined Crédit Agricole Cheuvreux in 1999 as Project Manager for the Senior Management team. Valérie started her career at Banque Indosuez where she managed international audit missions from 1995 to 1999. She is a graduate from HEC (Haute Ecole de Commerce, Paris) where she majored in Finance.
Valerie Baudson
The average total expense R e c e n t l y A m u n d i w a s ratio for your products associated with a "price war amounts to 27 basis points over European ETFs". Is against an average of 36 bps Amundi the coming Tesco of for rival European providers. the ETF business?Also Amundi has a smaller- Our primary concern is to offer than-average tracking error E u r o p e a n i n s t i t u t i o n a l against most competitors. investors a cost efficient with What is the secret behind high quality standard to answer these figures? their needs. The quality of our Right at the beginning, when we products is reflected through launched Amundi ETF in the choice of the index used as September 2008, we decided to well as the quality of replication, implement a competitive ie tracking error. We also pricing strategy. Cost is a key commit to filling in the gaps in criteria when selecting an ETF; the market by launching our TER is on average 25% lower innovative products. We take a than that of our competitors. very pragmatic approach to And, in addition to TERs, we innovation - innovation does carefully monitor bid/offer not mean complexity.spreads with our market makers to make them as tight as possible. We set up very close relationships with market markers such as Morgan Stanley, Merrill Lynch and Goldman Sachs, selected for their ETF trading experience and quality of service.
Which replication method you implemented for your ETFs?We decided to favour synthetic Who is Amundi's primary replication at it produces the swap counterpart for the lowest tracking error as well as synthetic (swap) replicated the lowest costs to investors. products?
The Grand Dame of Europe‘s ETF business talks about monitoring of bid/offer spreads , pragmatic approaches and provides a preview about Amundi‘s next product wave.
by Silvan Schelling
Managing Director,AmundiETF
“
”
We pragmatic approach to innovation - innovation does not mean complexity.
take a very
ETF Radar Magazine | Issue June 2011
´
11
Spotlight
about 1 in 10 institutional funds use w i th approx imate ly 85% o f For institutional funds, expense ETFs as part of hedging programs. A participating asset managers and 78% ratios almost match liquidity in terms quoted study participant from a $450 of participating institutional funds of importance when selecting an ETF million cultural endowment explains purchasing iShares ETFs. Among asset provider or a specific ETF product. the role ETFs play in his fund's managers, 55% of participants use Almost 60% of institutional funds hedging strategies. The fund views SPDRs (State Street Global Advisors), include expense ratios in their list of its $20 million investment in a gold 45% use Vanguard, and 35% use the three most important factors ETF as long-term investment and a BLDRs/Powershares. Among insti- considered when assessing ETF core part of its overall hedging tutional funds, 44% use SPDRs, 29% providers. Ranked a close third in program. use ETFs of Vanguard, and 7% use importance in picking an ETF
BLDRs/Powershares. provider is tracking error, which is cited as an important selection
Three factors in focus criterion.Asset managers focus on three additional factors when assessing potential ETF providers: tracking error (cited by 63% of asset managers), expense ratios (cited by 58%), and the benchmarks used by the provider in individual funds (cited by 47%). Rounding out the top five factors considered by asset managers when selecting an ETF provider is the overall strength of the fund company and management behind the funds.
Short holding periodsIn keeping with the tactical applications favored by asset managers, 40% of participating professionals said they typically hold ETF investments for 1–6 months and 40% say their typical holding periods are shorter than one month. In contrast, about a quarter of participating institutional funds Finally, the perception of ETFs as a report average holding periods of 1–6 retail dominated product is (more or months, a quarter typically hold ETF less) clearly out of date. ETFs have investments for 7–12 months, and slowly but steadily gained acceptance slightly more than one-third report as an important multi-purpose tool in average holding periods of a year or institutional portfolios – but not only more. in the US. The survey shows that
institutionals with experience using Top ETF Providers to U.S. ETFs in their portfolios will increase Institutional Investors their level of investment and activity Given the importance of scale and in ETFs in the next few years. Hence trading volume in the ETF business, the ETF industry should be well a few very large providers dominate prepared for more, good questions the institutional market. The boss and requests from increasingly among them is iShares/BlackRock, sophisticated product users. n
ETF Radar Magazine | Issue June 2011
BEYOND OLD SCHOOL ASSET MANAGEMENTETF Applications in Institutional Portfolios
THE KEY FACTORS FOR INSTITUTONLASMost Important Selection Criteria
Transitions
Asset Managers
Asset Managers
Institutional Funds
Institutional Funds
Cash equitization
Rebalancing
Tactical adjustments
Core/Satellite
Portfolio completion
Hedging
ETF overlay/Liquidity
Other
0% 20% 40% 60% 80%
0% 25% 50% 75% 100%
Source: Greenwich Associates as of May, 2011
Source: Greenwich Associates as of May, 2011
MOSTLY A SHORT TIME INVESTMENTTypical ETF Holding Period
Asset Managers
Up to 1 month
Institutional Funds
Source: Greenwich Associates as of May, 2011
12%
41%
41%
26%
38%
18%
24%
1 – 6 months 7 – 12 months 1 year and longer
Liquidity/trading volume
Expense ratio of fund
Tracking Error
Fund company and management behind funds
Track record of fund
Benchmark used
Servicing by sponsoring company
Breadth of ETF offerings
Harriman House is one of the UK's leading independent publishersof finance, trading and investment books.
There’s Never Been A Better Time To Learn More About The ETF Industry.
Hh Harriman HouseOn Sale Now:
www.harriman-house.com/etfradarGet 30% off the regular price!
Rankings
Top 25 ETF providers around the world ranked by Assets under ManagementAs at end April 2011
WORLDWIDE
In association with
Source: BlackRock Global ETF Research and Implementation Strategy Team
All our Equity, Commodity and ETFs. We will continue to cross-list Money Market ETFs use Crédit and register our products on the Agricole CIB as a counterparty main European Stock Exchanges whereas Société Générale CIB acts as which are France, Germany, Italy, counterparty on our Fixed income Switzerland, the Netherlands and ETFs. the UK. In May, we made our debut
in the United Kingdom with the Who are your main investment listing of 16 ETFs on the London clients (institutionals, IFAs, Stock Exchange. We expect to Private Investors)? launch approximately 50 ETFs in Our European client base is the UK over the next 3 months.composed mainly of institutional investors (asset managers, including balanced and multi-management teams, pension funds, insurance companies etc). This is in line with the rest of the European ETF market, which i s ma in ly dr iven by institutional investors.
In which of your ETFs, you have seen the most inflows within the last weeks – and which ETF saw the most redemptions? Which ETFs an investor should The Eurostoxx 50 has been the most consider currently and why?popular and this is consistent with This all depends on the investor's the market trend. We have also had strategy and objectives. Amundi's particular success with the MSCI strategists believe that the context Nordic, S&P500 and on the fixed is still favourable to equities, income side, Euro corporate and especially in the US and the euro Short US treasury ETFs. The main zone. They also feel that the global outflows were on some Emerging picture is still credit friendly. market exposures.
Are there any plans to list further ETFs the next time? Into which asset classes you want to expand? We currently have a range of over 100 products which cover the main asset classes. We plan to launch around 15 products during the course of 2011. Our latest launch was early May on Euronext Paris and was composed of 2 Euro Corporate financial and ex financial ETFs as well as Emerging Latin America and Emerging Asia
Thank you! n
“
“
”
”
Our European client base is composed mainly of largeInstitutional Investors.
We expect to launchapproximately 50 ETFs in the UK over the next 3 months.
People
Interview withAdam S. Patti, IndexIQin the Magazine’sNorth American Edition.www.etf-radar.com
ETF Radar Magazine | Issue June 2011
Harriman House is one of the UK's leading independent publishersof finance, trading and investment books.
There’s Never Been A Better Time To Learn More About The ETF Industry.
Hh Harriman HouseOn Sale Now:
www.harriman-house.com/etfradarGet 30% off the regular price!
Rankings
Top 25 ETF providers around the world ranked by Assets under ManagementAs at end April 2011
WORLDWIDE
In association with
Source: BlackRock Global ETF Research and Implementation Strategy Team
All our Equity, Commodity and ETFs. We will continue to cross-list Money Market ETFs use Crédit and register our products on the Agricole CIB as a counterparty main European Stock Exchanges whereas Société Générale CIB acts as which are France, Germany, Italy, counterparty on our Fixed income Switzerland, the Netherlands and ETFs. the UK. In May, we made our debut
in the United Kingdom with the Who are your main investment listing of 16 ETFs on the London clients (institutionals, IFAs, Stock Exchange. We expect to Private Investors)? launch approximately 50 ETFs in Our European client base is the UK over the next 3 months.composed mainly of institutional investors (asset managers, including balanced and multi-management teams, pension funds, insurance companies etc). This is in line with the rest of the European ETF market, which i s ma in ly dr iven by institutional investors.
In which of your ETFs, you have seen the most inflows within the last weeks – and which ETF saw the most redemptions? Which ETFs an investor should The Eurostoxx 50 has been the most consider currently and why?popular and this is consistent with This all depends on the investor's the market trend. We have also had strategy and objectives. Amundi's particular success with the MSCI strategists believe that the context Nordic, S&P500 and on the fixed is still favourable to equities, income side, Euro corporate and especially in the US and the euro Short US treasury ETFs. The main zone. They also feel that the global outflows were on some Emerging picture is still credit friendly. market exposures.
Are there any plans to list further ETFs the next time? Into which asset classes you want to expand? We currently have a range of over 100 products which cover the main asset classes. We plan to launch around 15 products during the course of 2011. Our latest launch was early May on Euronext Paris and was composed of 2 Euro Corporate financial and ex financial ETFs as well as Emerging Latin America and Emerging Asia
Thank you! n
“
“
”
”
Our European client base is composed mainly of largeInstitutional Investors.
We expect to launchapproximately 50 ETFs in the UK over the next 3 months.
People
Interview withAdam S. Patti, IndexIQin the Magazine’sNorth American Edition.www.etf-radar.com
Top 10 ETFs by Change in Average Daily VolumeAs at end April 2011
WORLDWIDE
Top 10 ETFs by Change in Assets under ManagementAs at end April 2011
WORLDWIDE
Source: BlackRock Global ETF Research and Implementation Strategy Team
► DAX LOVERSA rTop10 AuM list is the DAX index. Obviously an increasing number ofbuyers is convinced by the strongness of the German economy and its bluechips. The „German Angst“ seemsto be a phrase of the past.
emarkable newcomer within the
ETF Radar Magazine | Issue June 2011
Rankings
10
Top 10/Top 5 ETFs by Assets under ManagementAs at end April 2011
UNITED STATES
EUROPE
MIDDLE-EAST/AFRICA
ASIA-PACIFIC
JAPAN
15Source: BlackRock Global ETF Research and Implementation Strategy Team
ETF Radar Magazine | Issue June 2011
ETF Bloomberg ticker
AUM
(US$ Mn)
ADV
('000 shares)
ADV
(US$ Mn)
SPDR S&P 500 SPY US $95,287.1 131,642 $17,532.1
Vanguard MSCI Emerging Markets ETF VWO US $49,449.5 15,088 $752.5
iShares MSCI Emerging Markets Index Fund EEM US $41,760.0 51,364 $2,536.2
iShares MSCI EAFE Index Fund EFA US $41,350.5 12,886 $791.2
iShares S&P 500 Index Fund IVV US $29,024.4 2,830 $384.5
PowerShares QQQ Trust QQQ US $27,244.7 47,605 $2,748.6
iShares Barclays TIPS Bond Fund TIP US $20,475.7 673 $73.9
Vanguard Total Stock Market ETF VTI US $20,237.9 1,292 $89.1
iShares Russell 2000 Index Fund IWM US $19,144.0 46,905 $3,946.7
iShares Russell 1000 Growth Index Fund IWF US $13,859.9 1,748 $106.2
ETF Bloomberg ticker
AUM
(US$ Mn)
ADV
('000 shares)
ADV
(US$ Mn)
iShares S&P 500 IUSA LN $9,933.5 7,338 $96.8
ZKB Gold ETF (CHF) ZGLD SW $8,547.4 11 $25.9
iShares DAX (DE) DAXEX GY $8,316.5 2,886 $287.1
Lyxor ETF Euro STOXX 50 MSE FP $7,321.5 2,164 $95.4
Polaris Taiwan Top 50 Tracker 0050 TT $1,958.6 19,597 $42.6
ETF Bloomberg ticker
AUM
(US$ Mn)
ADV
('000 shares)
ADV
(US$ Mn)
SATRIX40 STX40 SJ $1,014.8 1,338 $6.0
STANLIB SWIX 40 Fund STANSX SJ $369.0 84 $0.1
Satrix Dividend Plus STXDIV SJ $160.0 959 $0.2
SATRIX Financials STXFIN SJ $126.8 68 $0.1
Bips Government Inflation Linked Bond Fund BIPINF SJ $126.5 29 $0.1
ETF Bloomberg ticker
ADV
(US$ Mn)
ADV
('000 shares)
AUM
(US$ Mn)
SPDR S&P 500 SPY US $17,532.1 131,642 $95,287.1
iShares Russell 2000 Index Fund IWM US $3,946.7 46,905 $19,144.0
PowerShares QQQ Trust QQQ US $2,748.6 47,605 $27,244.7
iShares MSCI Emerging Markets Index Fund EEM US $2,536.2 51,364 $41,760.0
Energy Select Sector SPDR Fund XLE US $1,198.0 15,351 $10,448.1
iShares MSCI Brazil Index Fund EWZ US $893.0 11,481 $13,348.4
iShares MSCI EAFE Index Fund EFA US $791.2 12,886 $41,350.5
Vanguard MSCI Emerging Markets ETF VWO US $752.5 15,088 $49,449.5
SPDR Dow Jones Industrial Average ETF DIA US $736.6 5,928 $10,370.3
Financial Select Sector SPDR Fund XLF US $686.1 42,119 $7,965.5
ETF Bloomberg ticker
AUM
(US$ Mn)
Apr-11
AUM
(US$ Mn)
Dec-10
Change
(US$ Mn)
iShares MSCI Emerging Markets Index Fund EEM US $41,760.0 47,551 -$5,791.5
SPDR S&P 500 SPY US $95,287.1 89,915 $5,371.8
PowerShares QQQ Trust QQQ US $27,244.7 22,070 $5,174.8
Vanguard MSCI Emerging Markets ETF VWO US $49,449.5 44,570 $4,879.7
iShares MSCI EAFE Index Fund EFA US $41,350.5 36,923 $4,427.4
iShares S&P 500 Index Fund IVV US $29,024.4 25,799 $3,225.2
db x-trackers DAX ETF XDAX GY $6,638.8 3,693 $2,945.8
iShares MSCI Japan Index Fund EWJ US $7,625.8 4,883 $2,742.5
iShares S&P MidCap 400 Index Fund IJH US $12,019.8 9,332 $2,687.8
iShares DAX (DE) DAXEX GY $8,316.5 5,918 $2,398.8
► SPY -30% ADVEven if it‘s still the number one inour ADV count, the lost nearly30% of its Average Daily Volume counted in USD. Some outflowsand declining prices in the underlying stocks hit ‘s AuM.
SPY
EEM
16
Rankings
Top 10 ETFs by Change in Average Daily VolumeAs at end April 2011
WORLDWIDE
Top 10 ETFs by Change in Assets under ManagementAs at end April 2011
WORLDWIDE
Source: BlackRock Global ETF Research and Implementation Strategy Team
► DAX LOVERSA rTop10 AuM list is the DAX index. Obviously an increasing number ofbuyers is convinced by the strongness of the German economy and its bluechips. The „German Angst“ seemsto be a phrase of the past.
emarkable newcomer within the
ETF Radar Magazine | Issue June 2011
Rankings
10
Top 10/Top 5 ETFs by Assets under ManagementAs at end April 2011
UNITED STATES
EUROPE
MIDDLE-EAST/AFRICA
ASIA-PACIFIC
JAPAN
15Source: BlackRock Global ETF Research and Implementation Strategy Team
ETF Radar Magazine | Issue June 2011
ETF Bloomberg ticker
AUM
(US$ Mn)
ADV
('000 shares)
ADV
(US$ Mn)
SPDR S&P 500 SPY US $95,287.1 131,642 $17,532.1
Vanguard MSCI Emerging Markets ETF VWO US $49,449.5 15,088 $752.5
iShares MSCI Emerging Markets Index Fund EEM US $41,760.0 51,364 $2,536.2
iShares MSCI EAFE Index Fund EFA US $41,350.5 12,886 $791.2
iShares S&P 500 Index Fund IVV US $29,024.4 2,830 $384.5
PowerShares QQQ Trust QQQ US $27,244.7 47,605 $2,748.6
iShares Barclays TIPS Bond Fund TIP US $20,475.7 673 $73.9
Vanguard Total Stock Market ETF VTI US $20,237.9 1,292 $89.1
iShares Russell 2000 Index Fund IWM US $19,144.0 46,905 $3,946.7
iShares Russell 1000 Growth Index Fund IWF US $13,859.9 1,748 $106.2
ETF Bloomberg ticker
AUM
(US$ Mn)
ADV
('000 shares)
ADV
(US$ Mn)
iShares S&P 500 IUSA LN $9,933.5 7,338 $96.8
ZKB Gold ETF (CHF) ZGLD SW $8,547.4 11 $25.9
iShares DAX (DE) DAXEX GY $8,316.5 2,886 $287.1
Lyxor ETF Euro STOXX 50 MSE FP $7,321.5 2,164 $95.4
Polaris Taiwan Top 50 Tracker 0050 TT $1,958.6 19,597 $42.6
ETF Bloomberg ticker
AUM
(US$ Mn)
ADV
('000 shares)
ADV
(US$ Mn)
SATRIX40 STX40 SJ $1,014.8 1,338 $6.0
STANLIB SWIX 40 Fund STANSX SJ $369.0 84 $0.1
Satrix Dividend Plus STXDIV SJ $160.0 959 $0.2
SATRIX Financials STXFIN SJ $126.8 68 $0.1
Bips Government Inflation Linked Bond Fund BIPINF SJ $126.5 29 $0.1
ETF Bloomberg ticker
ADV
(US$ Mn)
ADV
('000 shares)
AUM
(US$ Mn)
SPDR S&P 500 SPY US $17,532.1 131,642 $95,287.1
iShares Russell 2000 Index Fund IWM US $3,946.7 46,905 $19,144.0
PowerShares QQQ Trust QQQ US $2,748.6 47,605 $27,244.7
iShares MSCI Emerging Markets Index Fund EEM US $2,536.2 51,364 $41,760.0
Energy Select Sector SPDR Fund XLE US $1,198.0 15,351 $10,448.1
iShares MSCI Brazil Index Fund EWZ US $893.0 11,481 $13,348.4
iShares MSCI EAFE Index Fund EFA US $791.2 12,886 $41,350.5
Vanguard MSCI Emerging Markets ETF VWO US $752.5 15,088 $49,449.5
SPDR Dow Jones Industrial Average ETF DIA US $736.6 5,928 $10,370.3
Financial Select Sector SPDR Fund XLF US $686.1 42,119 $7,965.5
ETF Bloomberg ticker
AUM
(US$ Mn)
Apr-11
AUM
(US$ Mn)
Dec-10
Change
(US$ Mn)
iShares MSCI Emerging Markets Index Fund EEM US $41,760.0 47,551 -$5,791.5
SPDR S&P 500 SPY US $95,287.1 89,915 $5,371.8
PowerShares QQQ Trust QQQ US $27,244.7 22,070 $5,174.8
Vanguard MSCI Emerging Markets ETF VWO US $49,449.5 44,570 $4,879.7
iShares MSCI EAFE Index Fund EFA US $41,350.5 36,923 $4,427.4
iShares S&P 500 Index Fund IVV US $29,024.4 25,799 $3,225.2
db x-trackers DAX ETF XDAX GY $6,638.8 3,693 $2,945.8
iShares MSCI Japan Index Fund EWJ US $7,625.8 4,883 $2,742.5
iShares S&P MidCap 400 Index Fund IJH US $12,019.8 9,332 $2,687.8
iShares DAX (DE) DAXEX GY $8,316.5 5,918 $2,398.8
► SPY -30% ADVEven if it‘s still the number one inour ADV count, the lost nearly30% of its Average Daily Volume counted in USD. Some outflowsand declining prices in the underlying stocks hit ‘s AuM.
SPY
EEM
Rankings
18
Top 30 Worst Performing ETPsAs at end of May 2011
WORLDWIDE
Source: GlobalFundData/Morningstar as of May 30, 2011
► VOLA BETS UNDER FIREVolatility levels in North America and Europe decreased despite bad signals from Greece and Irelandin the last days which may leadto a new episode in the Europeandebt drama. Perhaps, now is thebest time to think about a vola shiftand positioning on the long side.
ETF Radar Magazine | Issue June 2011
Top 30 Best Performing ETPsAs at end of May 2011
WORLDWIDE
Rankings
17
Source: GlobalFundData/Morningstar as of May 31, 2011
► SILVER: BACK IN THE RACE?After a hard hit silver is back in the race and one of the best performingunderlyings of the last month.Still opinions are largely dividedif prices will climb back above USD 45 and beyond.
ETF Radar Magazine | Issue June 2011
ETF/ETP Listing Region 1 Mth 12 Mth Inception Net assets (USD)
ProShares Ultra Silver North America 62.43% 468.60% 205.73% 1,090,646,365
ETFS Leveraged Silver ETC Europe 62.39% 487.40% 42.40% 41,856,559
Horizons BetaPro COMEX Silver Bull North America 62.34% 476.65% 237.23% 113,962,424
ETFS Leveraged Silver (DE) ETC Europe 55.33% 426.44% 69.02% 31,479,481
ETFS Physical Silver Shares Europe 29.68% 160.65% 103.74% n/a
ETFS Leveraged PrecMtls DJ-UBSCI ETC Europe 28.77% 136.86% 30.64% 3,897,651
iShares Silver Trust North America 28.57% 160.38% 31.11% n/a
ETFS Physical Silver ETC Europe 28.55% 160.27% 35.65% 1,221,002,822
JB Physical Silver Fund A (USD) Europe 28.51% 158.90% 112.25% 626,476,652
JB Physical Silver Fund A (GBP) Europe 28.29% 155.81% 109.67% 375,597,812
PowerShares DB Silver North America 28.28% 157.87% 35.37% n/a
JB Physical Silver Fund A (EUR) Europe 28.25% 155.59% 109.03% 422,270,322
Horizons BetaPro COMEX Silver ETF North America 28.09% 154.10% 89.87% 26,164,112
ETFS Silver ETC Europe 28.08% 156.02% 34.49% 130,399,173
ZKB Silver ETF (USD) Europe 27.16% 155.60% 93.00% 832,245,652
ETFS Leveraged Cocoa ETC Europe 26.48% -9.93% -9.60% 7,451,663
ETFS Leveraged Corn ETC Europe 26.06% 182.53% -23.15% 7,008,196
Source: GlobalFundData/Morningstar as of May 30, 2011
► VOLA BETS UNDER FIREVolatility levels in North America and Europe decreased despite bad signals from Greece and Irelandin the last days which may leadto a new episode in the Europeandebt drama. Perhaps, now is thebest time to think about a vola shiftand positioning on the long side.
ETF Radar Magazine | Issue June 2011
Top 30 Best Performing ETPsAs at end of May 2011
WORLDWIDE
Rankings
17
Source: GlobalFundData/Morningstar as of May 31, 2011
► SILVER: BACK IN THE RACE?After a hard hit silver is back in the race and one of the best performingunderlyings of the last month.Still opinions are largely dividedif prices will climb back above USD 45 and beyond.
ETF Radar Magazine | Issue June 2011
ETF/ETP Listing Region 1 Mth 12 Mth Inception Net assets (USD)
ProShares Ultra Silver North America 62.43% 468.60% 205.73% 1,090,646,365
ETFS Leveraged Silver ETC Europe 62.39% 487.40% 42.40% 41,856,559
Horizons BetaPro COMEX Silver Bull North America 62.34% 476.65% 237.23% 113,962,424
ETFS Leveraged Silver (DE) ETC Europe 55.33% 426.44% 69.02% 31,479,481
ETFS Physical Silver Shares Europe 29.68% 160.65% 103.74% n/a
ETFS Leveraged PrecMtls DJ-UBSCI ETC Europe 28.77% 136.86% 30.64% 3,897,651
iShares Silver Trust North America 28.57% 160.38% 31.11% n/a
ETFS Physical Silver ETC Europe 28.55% 160.27% 35.65% 1,221,002,822
JB Physical Silver Fund A (USD) Europe 28.51% 158.90% 112.25% 626,476,652
JB Physical Silver Fund A (GBP) Europe 28.29% 155.81% 109.67% 375,597,812
PowerShares DB Silver North America 28.28% 157.87% 35.37% n/a
JB Physical Silver Fund A (EUR) Europe 28.25% 155.59% 109.03% 422,270,322
Horizons BetaPro COMEX Silver ETF North America 28.09% 154.10% 89.87% 26,164,112
ETFS Silver ETC Europe 28.08% 156.02% 34.49% 130,399,173
ZKB Silver ETF (USD) Europe 27.16% 155.60% 93.00% 832,245,652
ETFS Leveraged Cocoa ETC Europe 26.48% -9.93% -9.60% 7,451,663
ETFS Leveraged Corn ETC Europe 26.06% 182.53% -23.15% 7,008,196
General InformationThe views and expectations presented in the analyses, data and product presentations in this publication should not be viewed as investment recommendations of and by the ETF Radar Magazine or any of affiliates or associates. Investors should seek independent professional advice. Contributors of this publication and/or its affiliates may invest in or act as a market maker for the securities or indices or other products referred to in this publication for own account or the account of a third party. Editorial contributors may also have a business relationship with issuers of such securities or providers of such indices or products and may represent members of such issuers' or providers' decision-making bodies.
While the information in this publication has been obtained from sources believed to be reliable, neither the ETF Radar Magazine nor any contributor makes any representation as to accuracy or completeness. The ETF Radar Magazine does not act as an registered investment advisor or fiduciary for anyone unless otherwise agreed. Any evaluations in this publication reflect only the author's opinion at the time of the analysis. The opinions, forecasts, assumptions, estimates, derived valuations and target price(s) contained in this material are as of the date indicated and are subject to change at any time without prior notice. This publication is general and for information only and does not constitute any form of recommendation, an offer to sell or a solicitation to buy any security or other financial instrument.
Prospective investors should understand the risks associated with the products mentioned in this publication and should reach an investment decision on the basis of the information in the relevant offering circulars. Neither the staff of the ETF Radar Magazine nor any other person shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary loss or damages, including without limitation lost profits arising in any way from the information contained in the material. All designated trademarks and brands are the property of their respective owners.
Additional InformationAll figures are subject to market fluctuation and change. Investments that are concentrated in a specific sector or industry may be subject to a higher degree of market risk than investments that are more diversified. An index is not managed and is unavailable for direct investment. Total returns assume reinvestment of all distributions, including dividends and capital gains. Reinvestment does not assure a profit or protect against a loss in declining markets. Total returns do not include commissions, fees, other transaction variables or the effects of taxation. Past performance does not guarantee or predict future results. The investment discussed may not be suitable for all investors. Investors must make their own decisions based on their specific investment objectives and financial circumstances. This communication is not an offer to sell or solicitation of offers to buy any securities mentioned herein. This report is not a complete analysis of every material fact in respect to any fund or fund type. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Statistical information has been obtained from sources believed to be reliable but its accuracy is not guaranteed. The ETF Radar Magazine does not render legal, accounting or tax advice. Please consult your tax or legal advisors before taking any action that may have tax consequences.
The performance provided is past performance, which does not guarantee future results and current performance may be lower or higher than the performance data quoted. The investment return and principal value will fluctuate when sold and may be worth more or less than the original cost.
EXCHANGE TRADED FUNDS ARE SOLD BY PROSPECTUS. PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISK, CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION, CAN BE OBTAINED FROM THE ETF SPONSOR OR YOUR FINANCIAL ADVISOR. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
Disclaimer
Important notice to our readers
19
ETF Radar Magazine | Issue June 2011
The teachings of GREG SECKER live in the UK. At your exciting and highly lucrative complimentary seminar, one of Greg’s Elite Forex Tradersshows you in step by step detail how to use the Forex Market as your personal cash machine.
At this FREE
Seminar you will discover:• How Forex, traded correctly - is the fastest way to become � nancially
independent and quit your day job in 6 months or less
• You’ll discover the simple systems veteran forex trader Greg Secker uses daily to rake in thousands of pounds - that anyone can use!
• How to automate everything in 20 minutes per day, so you setup walk away and collect your pro� ts at the end of the day - using proven strategies that work!
To attend a FREE Forex Seminar in the UK book now at
www.easyfxprofits.co.uk or call 0203 384 6859
Disclaimer: Our Seminars are purely educational in nature. We do not advise upon or tip any trades shown in any seminar. All trades demonstrated whilst on Knowledge to Action’s courses are for educational and illustration purposes only. These products are not suitable for all investors. Please make sure you understand the risks involved.
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General InformationThe views and expectations presented in the analyses, data and product presentations in this publication should not be viewed as investment recommendations of and by the ETF Radar Magazine or any of affiliates or associates. Investors should seek independent professional advice. Contributors of this publication and/or its affiliates may invest in or act as a market maker for the securities or indices or other products referred to in this publication for own account or the account of a third party. Editorial contributors may also have a business relationship with issuers of such securities or providers of such indices or products and may represent members of such issuers' or providers' decision-making bodies.
While the information in this publication has been obtained from sources believed to be reliable, neither the ETF Radar Magazine nor any contributor makes any representation as to accuracy or completeness. The ETF Radar Magazine does not act as an registered investment advisor or fiduciary for anyone unless otherwise agreed. Any evaluations in this publication reflect only the author's opinion at the time of the analysis. The opinions, forecasts, assumptions, estimates, derived valuations and target price(s) contained in this material are as of the date indicated and are subject to change at any time without prior notice. This publication is general and for information only and does not constitute any form of recommendation, an offer to sell or a solicitation to buy any security or other financial instrument.
Prospective investors should understand the risks associated with the products mentioned in this publication and should reach an investment decision on the basis of the information in the relevant offering circulars. Neither the staff of the ETF Radar Magazine nor any other person shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary loss or damages, including without limitation lost profits arising in any way from the information contained in the material. All designated trademarks and brands are the property of their respective owners.
Additional InformationAll figures are subject to market fluctuation and change. Investments that are concentrated in a specific sector or industry may be subject to a higher degree of market risk than investments that are more diversified. An index is not managed and is unavailable for direct investment. Total returns assume reinvestment of all distributions, including dividends and capital gains. Reinvestment does not assure a profit or protect against a loss in declining markets. Total returns do not include commissions, fees, other transaction variables or the effects of taxation. Past performance does not guarantee or predict future results. The investment discussed may not be suitable for all investors. Investors must make their own decisions based on their specific investment objectives and financial circumstances. This communication is not an offer to sell or solicitation of offers to buy any securities mentioned herein. This report is not a complete analysis of every material fact in respect to any fund or fund type. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Statistical information has been obtained from sources believed to be reliable but its accuracy is not guaranteed. The ETF Radar Magazine does not render legal, accounting or tax advice. Please consult your tax or legal advisors before taking any action that may have tax consequences.
The performance provided is past performance, which does not guarantee future results and current performance may be lower or higher than the performance data quoted. The investment return and principal value will fluctuate when sold and may be worth more or less than the original cost.
EXCHANGE TRADED FUNDS ARE SOLD BY PROSPECTUS. PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISK, CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION, CAN BE OBTAINED FROM THE ETF SPONSOR OR YOUR FINANCIAL ADVISOR. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
Disclaimer
Important notice to our readers
19
ETF Radar Magazine | Issue June 2011
The teachings of GREG SECKER live in the UK. At your exciting and highly lucrative complimentary seminar, one of Greg’s Elite Forex Tradersshows you in step by step detail how to use the Forex Market as your personal cash machine.
At this FREE
Seminar you will discover:• How Forex, traded correctly - is the fastest way to become � nancially
independent and quit your day job in 6 months or less
• You’ll discover the simple systems veteran forex trader Greg Secker uses daily to rake in thousands of pounds - that anyone can use!
• How to automate everything in 20 minutes per day, so you setup walk away and collect your pro� ts at the end of the day - using proven strategies that work!
To attend a FREE Forex Seminar in the UK book now at
www.easyfxprofits.co.uk or call 0203 384 6859
Disclaimer: Our Seminars are purely educational in nature. We do not advise upon or tip any trades shown in any seminar. All trades demonstrated whilst on Knowledge to Action’s courses are for educational and illustration purposes only. These products are not suitable for all investors. Please make sure you understand the risks involved.