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Index funds have record year as passive wins over active
$115B in flows nearly double previous high; active takes in just $38B
January 31, 2014--U.S. investors embraced passive investing in 2013 by pouring a record $115 billion into index mutual funds, almost double the previous high.
Investor deposits into benchmark-tracking funds outstripped the $38.3 billion gathered in 2013 by actively managed mutual funds, according to data compiled by the Investment Company Institute. The previous high for index funds was $61.1 billion in 2007, the data show.
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Source: Investment News
New entrants eye uneasy alliances
January 31, 2014--Fidelity Investments runs businesses in fields as diverse as retail banking and hydroponic tomatoes, but when it came to launching exchange traded funds, it saw fit to ally with one of its fiercest competitors.
Other late entrants into the US ETF market are likely to forge similarly uneasy alliances, given that the three biggest providers - BlackRock's iShares, State Street Global Advisors and Vanguard Investments-control more than 80 per cent of assets and boast first-mover advantage in tracking the major indices, allowing them to pare fees mercilessly.
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Source: FT.com
S&P Dow Jones Indices' Market Attributes: Index Dashboard Canada
January 31, 2014--Highlights this month include:
In contrast to the rest of the world, Canadian equities started 2014 with a modest rise. The S&P/TSX Composite and S&P/TSX 60 were up less than 1% while international equities were in the red. There was an uptick in volatility as the S&P/TSX 60 VIX increased 10%.
In the U.S., the Dow Jones Industrial Average and S&P 500 declined 5% and 3%, respectively. Outside the U.S., developed markets declined 4% while emerging markets, plagued by currency depreciation, dropped 6%. Notably, Latin America fell 10%..
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Source: S&P Dow Jones Indices
New ETF breed faces hurdle of strategy disclosure
January 31, 2014--The next frontier for exchange traded funds is in sight. That is the view of some leading industry figures after recent developments in the multiyear push to get a novel form of active ETFs approved by regulators.
But for these so-called "non-transparent active ETFs" to go live on US markets this year, much will depend on whether asset managers can overcome concerns about how the funds will work without the daily holding disclosures that have been a regulatory cornerstone for US ETFs.
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Source: SEC.gov
S&P Dow Jones Indices' Market Attributes: Index Dashboard US
January 31, 2013--Highlights this month include:
Equities across the globe began 2014 in the red. In the U.S., the Dow Jones Industrial Average and S&P 500 declined 5% and 3%, respectively. Appropriately, there was an uptick in volatility as the S&P 500 VIX Short-Term Futures index gained 17%.
Of the ten S&P 500 sectors, only utilities and health care (not surprisingly) managed to eke out a gain. Consumer discretionary, which was the best performing sector in 2013, fell by 6% this month.
Outside the U.S., developed markets declined 4% while emerging markets, lagued by currency depreciation, dropped 6%. Notably, Latin America fell 10%.
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Source: S&P Dow Jones Indices
CBOE Futures Exchange Announces Launch Date For CBOE Short-Term VIX Futures With Weekly Expirations
Particularly responsive to short-term moves in S&P 500 Index
Combine benefits of VIX futures and SPX Weeklys
January 30, 2014--CBOE Futures Exchange, LLC (CFE(R)) announced today that it plans to launch trading of futures with weekly expirations on the new CBOE Short-Term Volatility IndexSM (ticker symbol: VXSTSM) on Thursday, February 13, pending regulatory review.
Chicago Board Options Exchange® (CBOE(R)) developed the CBOE Short-Term Volatility Index ("VXST Index" or "Short-Term VIX Index") in response to proven demand for WeeklysSM options generally, and volatility contracts that measure a shorter time period in particular. Like CBOE's flagship CBOE Volatility Index(R) (VIX(R) Index), the Short-Term VIX Index reflects investors' consensus view of expected stock market volatility using CBOE's proprietary VIX methodology. Both indexes use S&P 500(R) Index (SPXSM) options in their calculations. The VIX Index uses SPX monthly options to measure expectations of 30-day volatility, while the VXST Index uses SPX options that expire every week (including SPX Weeklys) to gauge expectations of nine-day volatility. The VXST Index's shorter time horizon makes it particularly responsive to short-term volatility triggered by market events such as corporate earnings, government reports and Fed announcements.
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Source: CBOE
US economy shrugs off shutdown with 3.2% growth in fourth quarter
January 30, 2014--Highest consumer spending levels in three years boosted growth, which had been hit by higher taxes and federal spending cuts
The US economy expanded at an annual rate of 3.2% in the last three months of 2013, the Commerce Department said on Thursday, as consumers and businesses largely ignored a government shutdown and fight over the debt ceiling.
The pace of growth slowed from 4.1% in the previous quarter but still means that US gross domestic product (GDP) the broadest measure of goods and services produced across the economy, grew at an annual rate of 3.7% in the last half of 2013, a pace unseen since 2003.
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Source: The Guardian
The Commodity Futures Trading Commission's Division of Market Oversight Announces Trade Execution Mandate for Certain Credit Default Swaps
MarketAxess SEF Corporation's Available-to-Trade Determinations Are Self-Certified
January 30, 20144--The Commodity Futures Trading Commission's (CFTC or Commission) Division of Market Oversight (Division) today announced that MarketAxess SEF Corporation's (MarketAxess) self-certification of available-to-trade determinations (MAT Determination)
for certain credit default swap (CDS) contracts is self-certified.
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Source: CFTC.gov
Nasdaq sees hurdle in business of U.S. government-bond trading
January 30, 2014--Nasdaq OMX Group has aimed to increase market share in U.S. government bonds since acquiring eSpeed a year ago but faces resistance from banks that dominate the market.
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Source: Smart Brief
Asset managers lure insurers with new exchange-traded funds
January 30, 2014--Insurers predicted to increase ETF exposure
Asset managers are refining their exchange-traded fund (ETF) products in a bid to attract insurers seeking to invest in a wider range of credit securities.
Earlier this month Pimco released an actively managed ETF investing in covered bonds to appeal to insurers looking for easy access to an asset class that receives favourable treatment under Solvency II.
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Source: Risk.net
