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Testimony of Market Microstructure: Examination of Exchange-Traded Funds (ETFs) held on October 19, 2011.
October 21, 2011-Following is the witnesses testimony given at the Market Microstructure: Examination of Exchange-Traded Funds (ETFs).
Testimony of Ms. Eileen Rominger
Director
Division of Investment Management, U.S. Securities and Exchange Commission
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Mr. Eric Noll
Executive Vice President
Transaction Services, NASDAQ OMX
Mr. Noel Archard
Managing Director, BlackRock I-Shares
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Mr. Harold Bradley
Chief Investment Officer, Ewing Marion Kauffman Foundation
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view webcast
Source: U.S. Senate Committee on Banking, Housing, and Urban Affairs
Russell files with the SEC
October 20, 2011--Russell has filed a post-effective amendment, registration statement with the SEC for the Russell U.S. Large Cap ETF
Russell U.S. Large Cap Growth ETF
Russell U.S. Large Cap Value ETF
Russell U.S. All Cap ETF
Russell U.S. Mid Cap ETF
Russell U.S. Small Cap ETF
view filing
Source: SEC.gov
Schwab Launches New U.S. Dividend Equity Exchange-Traded Fund
October 20, 2011-- Charles Schwab, a retail marketplace leader for exchange-traded funds (ETFs), announced today that the Schwab U.S. Dividend Equity ETF(TM) (SCHD) has begun trading.
The new Schwab U.S. Dividend Equity ETF offers investors the potential for current income as well as capital appreciation through exposure to companies with a record of paying consistent dividends and strong relative fundamental strength.
Unlike other dividend equity funds, which typically have either an income or a capital appreciation objective, the Schwab U.S. Dividend Equity ETF takes a blended approach that seeks to track financially strong companies, relative to their peers, that have a history of paying dividends. The Schwab U.S. Dividend Equity ETF seeks investment results that track the total return of the Dow Jones U.S. Dividend 100 Index(SM) as closely as possible before fees and expenses. The fund's 0.17 percent operating expense ratio is the lowest among ETFs and mutual funds in the Lipper Equity Income category(1). Like Schwab's other 14 proprietary ETFs, it can be bought and sold commission-free** online in Schwab accounts.
"We've worked hard to construct a fund that offers investors the potential for both current income and capital appreciation in one low-cost ETF, and we're pleased with the outcome," said John Sturiale, vice president of product management at Schwab. "With an expense ratio of just 17 basis points, this newest ETF can diversify a portfolio's income stream at an incredibly impressive value."
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Source: Charles Schwab Investment Management
iShares Launches Emerging Markets Local Currency Bond Fund
October 20, 2011---BlackRock, Inc. today announced that its iShares(R) Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, has launched the iShares Emerging Markets Local Currency Bond Fund (nyse arca:LEMB) on the NYSE Arca. The new fund provides investors with diversified access to the broad investable universe of local emerging market debt, offering 100% local exposure to bonds denominated in issuers' local currencies.
"Historically, emerging market debt has been a difficult asset class for investors to access directly because of limitations in bond availability, high minimum trade sizes, and foreign investor restrictions," said Matt Tucker, Head of iShares Fixed Income Strategy at BlackRock. "LEMB enables investors to access a broad universe of local sovereign bonds in a flexible format."
Over the last several years, emerging markets have matured and have come to rely increasingly on local currency bonds to finance their deficits. Local currency debt represents approximately 78% of the $1.9 trillion dollars available in emerging market debt today.(1) The new iShares fund offers broad access to the emerging market debt universe with exchange traded liquidity.
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Source: BlackRock
iShares Launches Four Minimum Volatility ETFs to Help Investors Manage Risk
October 20, 2011--BlackRock, Inc. (NYSE: BLK) today announced that its iShares® Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, has launched on the NYSE Arca four new minimum volatility funds designed to help investors manage risk in their portfolios. The new funds can help provide a portfolio with downside protection while seeking to maintain some exposure to the upside price movement.
The funds are:
iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE Arca: EEMV)
iShares MSCI EAFE Minimum Volatility Index Fund (NYSE Arca: EFAV)
iShares MSCI USA Minimum Volatility Index Fund (NYSE Arca: USMV)
iShares All Country World Minimum Volatility Index Fund (NYSE Arca: ACWV)
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Source: BlackRock
Will the SEC Kill These ETFs?
October 20, 2011--Even amid market turmoil and economic uncertainty, exchange-traded funds have never been more popular. But Congress and the SEC see the industry differently, and they're looking to take bold steps to clamp down on ETFs before they create another financial crisis.
The evolution of ETFs
When they first came out, exchange-traded funds were simple and easy to understand. Closely resembling index mutual funds, ETFs tracked well-established indexes by owning all the underlying component stocks. As a result, when you looked at daily holdings of ETFs, you'd see all the stocks you'd expect from whichever index the ETF followed.But along the line, ETFs have broken ground in new sectors of the financial markets, opening the door for investors to put their money into previously unavailable investments. But with that new opportunity also came complexity. Here are just a few examples of ETFs that blazed new trails for investors -- along with some of the problems and concerns that came with them:When United States Natural Gas (NYSE: UNG - News) became available,
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Source: Motley Fool
US banks issue bonds worth more than $2bn
October 20, 2011--Goldman Sachs and JPMorgan Chase issued more than $2bn in new long-term debt on Wednesday as the banks looked to take advantage of calmer markets and lock in funding from new sources.
Investors shied away from bank debt during the late summer as markets were roiled by the eurozone crisis and credit default swaps on some US banks reached their widest spreads since Lehman Brothers collapsed in 2008.
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Source: FT.com
Exchange Traded Concepts Files for Approval to Issue Fixed Income and Actively Managed ETFs
ETF-in-a-Box Platform Seeks to Expand Offerings for Current and Prospective Partners
October 20, 2011--Expanding its ETF-in-a-Box platform for investment managers and advisors, Exchange Traded Concepts (ETC) has filed requests for exemptive relief with the Securities & Exchange Commission to issue fixed income and actively managed exchange-traded funds.
In addition to active and fixed income funds, ETC has requested relief to issue domestic and international funds that employ fund-of-funds, 130/30, and balanced strategies.
The filings reflect ETC’s effort to meet marketplace demand for sophisticated investments in an ETF structure by enabling current and prospective partners to launch ETFs across the full spectrum of investment strategies. Under the ETC platform, partners will be able to launch such ETFs in an accelerated, cost-efficient manner under their own label.
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Source: Exchange Traded Concepts
Dow Jones Indexes To License Dow Jones U.S. Dividend 100 Index To Charles Schwab For U.S. Dividend Equity ETF
Dow Jones U.S. Dividend 100 Index to Measure Stock Performance
of High-Dividend-Yielding U.S. Companies
Index Differs from Other Dividend Gauges
By Accounting for Additional Fundamentals-Based Factors
October 20, 2011--Dow Jones Indexes today announced that Charles Schwab has licensed the new Dow Jones U.S. Dividend 100 IndexSM to underlie the Schwab U.S. Dividend Equity ETF™, the latest addition to Schwab’s growing proprietary exchange-traded funds (ETFs) platform. This ETF was launched today by Schwab and will trade on the NYSE Arca.
The Dow Jones U.S. Dividend 100 Index was also launched today and is designed to measure the stock performance of high-dividend-yielding U.S. companies with a record of consistently paying dividends, selected for fundamental strength relative to their peers based on financial ratios.
“Schwab’s selection of the Dow Jones U.S. Dividend 100 Index as the underlying gauge for its new ETF is the latest in a series of licensing arrangements between our firms,” said Michael A. Petronella, President of Dow Jones Indexes. “By regularly working with market leaders such as Schwab, Dow Jones Indexes continues to burnish its brand as a company with a long track record of creating reliable, rules-based market-measurement tools.”
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Source: Dow Jones Indexes
SEC to Weigh Hedge Fund Rule on Systemic Risk Data Analysis
October 20, 2011-- Hedge funds and private-equity funds will be asked to deliver “extraordinary amounts” of new data to the U.S. Securities and Exchange Commission under a rule set for a vote next week, said SEC Chairman Mary Schapiro.
Under the version of the rule proposed by the SEC on Jan. 26, firms managing more than $1 billion would have to file quarterly information on fund assets, leverage, investment positions, valuation and trading practices on a new Form PF. That added oversight would also come with routine inspections.
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Source: Bloomberg BusinessWeek
