LONDON, May 5 (Reuters) - A credit crunch, economic downturn and now swine flu have knocked down expectations of a swift return to a commodities super-cycle, but signs have emerged of more adventurous trading strategies.
As proof of investor interest, flows of new money into commodities in the first quarter have been estimated at record levels as cheaper markets provided buying opportunities. (For related factbox, please click on)
London Metal Exchange copper has risen by around 50 percent so far this year and U.S. benchmark crude futures have gained 22 percent.
The most investment in the first quarter went into single-commodity exchange-traded funds (ETFs), also known as exchange-traded products, which allow investors to buy a share in raw materials in a similar way to acquiring an equity stake in companies.
Daniel Wills of ETF Securities, an ETF specialist, said investors had become bolder after a period of carefully focusing on individual commodities.
"What we've seen more recently is investors starting to broaden their exposure and come out of their shell a little bit," he said.
Full Story: http://www.forbes.com/feeds/reuters/2009/05/05/2009-05-05T130732Z_01_L4850781_RTRIDST_0_COMMODITIES-PRICE-ANALYSIS.html ANALYSIS-Commodity markets cautiously shift strategy
LONDON, May 5 (Reuters) - A credit crunch, economic downturn and now swine flu have knocked down expectations of a swift return to a commodities super-cycle, but signs have emerged of more adventurous trading strategies.
As proof of investor interest, flows of new money into commodities in the first quarter have been estimated at record levels as cheaper markets provided buying opportunities. (For related factbox, please click on)
London Metal Exchange copper has risen by around 50 percent so far this year and U.S. benchmark crude futures have gained 22 percent.
The most investment in the first quarter went into single-commodity exchange-traded funds (ETFs), also known as exchange-traded products, which allow investors to buy a share in raw materials in a similar way to acquiring an equity stake in companies.
Daniel Wills of ETF Securities, an ETF specialist, said investors had become bolder after a period of carefully focusing on individual commodities.
"What we've seen more recently is investors starting to broaden their exposure and come out of their shell a little bit," he said.
Full Story: http://www.forbes.com/feeds/reuters/2009/05/05/2009-05-05T130732Z_01_L4850781_RTRIDST_0_COMMODITIES-PRICE-ANALYSIS.html Is Your ETF On DEATHROW?
The number of exchange-traded products on Deathwatch decreased for the second month in a row. It would be premature to declare that the peak is now behind us, because I would not be surprised to see additional recession-related declines in trading activity for some ETFs in the months ahead. This month’s list contains 155 names, down from 162 last month and down from the record high of 171 for the March list. The current list consists of 114 ETFs and 41 ETNs that are at least six months old and failed to have an Average Daily Value Traded (ADVT) of at least $100,000 during April.
Elements Ben Graham Large Cap Value ETN (BVL) heads up the list this month with a pathetic 38 shares traded per day - an ADVT of just $242. Closer inspection reveals that BVL only traded on five separate days in April, and its highest-volume day was just 200 shares. The two other Elements Ben Graham products are on the list as well. The second entry on the list is Barclays GEMS Asia 8 ETN (AYT) which only traded one day last month. A grand total of 400 shares traded hands, all on April 7.
PowerShares has the largest number of products on the list with 37 (30 ETFs, 6 ETNs, and 1 BLDR), or nearly 24% of the list. PowerShares took a step last Friday to improve their standing by announcing the closure of 19 ETFs. However, only ten of those funds are on ETF Deathwatch. That means that after the closures, there will still be 26 PowerShares products on ETF Deathwatch plus one BLDR, which is now sponsored by PowerShares.
Clearly, more than just trading activity goes into the decision of whether or not to close an ETF. One potentially better gauge is assets under management (AUM) for the fund. However, getting AUM data in a timely manner is tough, and then one would need to determine what percentage is “real investor” money versus “seed money” from the sponsor. Nearly every fund on this list is composed primarily of the original seed money. I have found that ADVT does a great job of pointing out where the problems are.
Full Story: http://investwithanedge.com/etf-deathwatch-may-2009 How to Capitalize on Electrical Grid Upgrades With ETFs (TAN, FAN, PBW)
No question: the U.S. electrical grid needs a serious upgrade, and exchange traded fund (ETF) investors could stand to benefit as the changes take place.
The task of quantifying savings is almost, if not completely, impossible. The price tag of a new grid is elusive, and estimates that do exist can range from $100 billion to $2 trillion, explains Jenny Gold for NPR. The focus of the problem is that the grid is made up of many little parts, which would be built and managed by different sectors of the energy industry.
Each new system (such as power lines, smart technology and new sources of power) can add hundreds of billions of additional dollars to a total cost estimate. The bottom line is that the upgraded grid will be expensive and cost billions. Then there’s the specter of public opposition because of the costs being passed down to the consumer, as well as political loopholes.
But one step consumers can take is installing a digital smart meter in your home, which costs $250. As such meters catch on, it can give utilities a better idea of their consumers’ needs and help fund improvements.
Full Story: http://www.etftrends.com/2009/05/how-to-capitalize-on-electrical-grid-upgrades-with-etfs.html Fidelity investments adds IQ ALPHA Hedge Strategy Fund to mutual fund platform
The IQ ALPHA Hedge Strategy Fund - the first no-load, open-end mutual fund to bring hedge fund-style investing to retail investors - has been added to the Fidelity Investments mutual fund platform.
The no-transaction fee Investor Class Fund is available through Fidelity Investments with a minimum required investment for first-time shareholders of USD2,500. The Institutional Class Fund is available with a minimum aggregated investment of USD250,000.
"The extraordinary market volatility investors have experienced serves to highlight the positive role alternative asset classes can play in providing portfolio diversification," says Adam Patti, chief executive officer at IndexIQ. "Our goal is to make these strategies available to Registered Investment Advisors and retail investors through products that are transparent and cost-efficient. The addition of the IQ ALPHA Hedge Strategy Fund to the Fidelity Investments platform is a significant step forward in reaching this broader market."
Full Story: http://www.hedgeweek.com/articles/detail.jsp?content_id=328442 Stocks surge; S&P 500 turns positive for 2009
NEW YORK (AP) -- The Standard & Poor's 500 index is up for the year. And for once, it was the housing market that sent stocks soaring.
The S&P 500, considered Wall Street's most important indicator, bounded up 3.4 percent Monday and erased the last of its losses for 2009. And the Dow Jones industrials shot up more than 200 points and had their first finish above 8,400 since Jan. 13.
Two months ago, an S&P 500 in positive ground would have seemed impossible, with the stock market having fallen to 12-year lows on fears of a worsening recession. Monday's rally was led by the same financial and housing stocks that were decimated by the credit crisis and the sinking economy, and it added more momentum to a stunning rally that began March 10.
A double dose of good housing news ignited the advance: Pending U.S. home sales rose more than forecast and had their second straight monthly gain, while construction spending rose unexpectedly in March after five straight declines.
With Monday's gain, the S&P has soared 34.1 percent in the 39 trading days since the rally began, its steepest gain over that many days since 1933. The Dow, meanwhile, is up 28.7 percent.
Investors are betting that a stream of slowly improving data since early March mean that the economy, and Wall Street itself, have found a bottom. As they've kept buying, they've also overlooked reports, including millions of lost jobs, that point to continuing economic weakness.
Full Story: http://finance.yahoo.com/news/Stocks-surge-SampP-500-turns-apf-15127176.html?sec=topStories&pos=main&asset=&ccode= PowerShares Pulls Plug on 19 ETFs
Invesco PowerShares Capital Management has announced its plan to liquidate 19 exchange-traded funds (ETFs) within its family.
The final day of trading for the ETFs listed below will be on May 18, 2009.
--PowerShares Dynamic Aggressive Growth Portfolio (PGZ)
--PowerShares Dynamic Asia Pacific Portfolio (PUA)
--PowerShares Dynamic Deep Value Portfolio (PVM)
--PowerShares Dynamic Europe Portfolio (PEH)
--PowerShares Dynamic Hardware & Consumer Elec Portfolio (PHW)
--PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio (PDQ)
--PowerShares FTSE RAFI Basic Materials (PRFM)
--PowerShares FTSE RAFI Consumer Goods (PRFG)
--PowerShares FTSE RAFI Consumer Services (PRFS)
--PowerShares FTSE RAFI Energy (PRFE)
--PowerShares FTSE RAFI Europe Small-Mid (PWD)
--PowerShares FTSE RAFI Financials (PRFF)
--PowerShares FTSE RAFI Health Care (PRFH)
--PowerShares FTSE RAFI Industrials (PRFN)
--PowerShares FTSE RAFI Telecom & Tech (PRFQ)
--PowerShares FTSE RAFI Utilities (PRFU)
--PowerShares High Growth Rate Dividend (PHJ)
--PowerShares International Listed Private Equity (PFP)
Full Story: http://finance.yahoo.com/news/PowerShares-Pulls-Plug-on-19-etfguide-15125380.html?.v=1 Dow Jones Suspends Hedge Fund Index
An index that tracks hedge fund strategies with distressed securities has temporarily suspended publication, Dow Jones announced early Monday.
The Dow Jones Hedge Fund Distressed Securities Strategy Benchmark will remain closed indefinitely, the index provider added in a statement.
It said the "decision to halt publication of the benchmark is a result of market conditions in the distressed securities space, and was made jointly by Dow Jones Hedge Fund Indexes and the investment manager of the managed account platform that supports the Dow Jones Hedge Fund Strategy benchmarks."
Full Story: http://www.indexuniverse.com/sections/newsinfocus/5799-dow-jones-suspends-distressed-securities-index-.html Today’s Pending Home Sales Show Great Comfort (XHB)
If you are an investor or a buyer in the market for a new home or if you are a homebuilder, there may be some good news after waves and waves of bad news and then “less-bad news.” The National Association of Realtors said that pending home sales has risen with many new first time home buyers taking advantage of the affordability of housing. Pending Home Sales rose by 3.2% in March, 2009 to 84.6. This compares to 82.0 in February, 2009 and compares to 83.7 in March, 2008. This has the SPDR S&P Homebuilders (NYSE: XHB) screaming on the news.
Full Story: http://247wallst.com/2009/05/04/pending-home-sales-show-great-comfort-xhb/#more-33094 SEI Selected by Global X Management to Provide Turnkey Solution to Support Their Exchange Traded Funds
May 4, 2009: SEI (Nasdaq: SEIC) today announced that it has been selected by Global X Management Company to provide a fully integrated, turnkey solution to support the firm's global exchange traded funds (ETFs). SEI's integrated ETF solution is designed to help investment managers meet the emerging market demand for launching new ETF products, while supporting greater transparency and efficiency. It also provides an efficient way for managers to enter the market quickly with limited investment.
Under the terms of the agreement, SEI will provide a complete outsourcing solution that includes fund administration, accounting, investor servicing, distribution and authorized participant (AP) processing for Global X's ETFs in a straight-through electronic processing environment. SEI was selected following a thorough search process that included the major providers in the ETF space. The company's best-in-class approach, scalability, and straight-through processing environment were pointed to as key factors in the decision.
"SEI's fully integrated solution provides a comprehensive, single source environment that isn't possible when working with multiple vendors," said Bruno del Ama, CEO of Global X Management. "We are launching funds in different countries and SEI's experience and knowledge in the ETF business is a big advantage for us. We know that they have the depth to service us now and, more importantly, they have the ability to scale this offering with us as we grow - and that's critical." SEI is the leading processor for ETF trades for authorized participants. With the first family of ETFs, Global X is launching global ETFs focusing on the Nordic region, Colombia, Argentina, Peru, Philippines, and Egypt.
Full Story: http://www.cnbc.com/id/30558284/site/14081545
New BGI Program Highlights 401(k) ETF Providers
Financial advisers looking to access exchange-traded funds for their 401(k) accounts may find the search is easier with the launch of a new Barclays Global Investors program that is designed to highlight administrative providers and networks that enable the use of ETFs in 401(k)s. See Story: Why the Case For ETFs In 401(k) Plans Just Got Stronger
Essentially, the "iShares in 401(k) Program" gives certain service providers BGI's stamp of approval. It officially went live on May 1.
ETFs are very appealing to 401(k) investors in small- and mid-sized plans, which may not qualify for some of the lower fund fees available to larger plans. ETFs are cheaper than most traditional mutual funds, including many index funds. But the record-keeping and transactional accounting systems for 401(k) funds were originally designed for mutual funds, which trade once a day at the end of the day and can only be bought and sold in full shares - unlike ETFs, which trade throughout the day and can be traded in fractional shares.
Although there are ways to access ETFs indirectly, and some self-directed plans from large brokerage houses actually do allow for direct ETF ownership, it's only recently that solutions have been developed to bypass these obstacles for the average 401(k) plan. However, such plans are few and far between, and they've been a bit slow getting off the ground.
The program is targeted at financial advisors and screens the firms considered for inclusion for low pricing and directness of access. Fee transparency and quality of service are also major considerations in the evaluation.
Full Story: http://www.indexuniverse.com/sections/newsinfocus/5797-new-bgi-program-highlights-401k-etf-providers.html Fidelity’s Mutual Fund Assets Shrink 4.9%, Mirroring Customers’
“ETFs are beginning to eat everyone’s lunch in this industry,”
May 4 (Bloomberg) -- Fidelity Investments, the world’s largest mutual fund company, has one thing in common with some of its customers: it has less money in stock and bond funds than it did a decade ago.
Fidelity’s long-term assets fell 4.9 percent to $521 billion at the end of March, according to Financial Research Corp., a Boston-based company whose data excludes money-market funds.
“A lot of their funds have had middling performance and that turns people off,” said Russel Kinnel, director of mutual fund research at Morningstar Inc., a Chicago-based company that tracks the industry......
......ETF Specialists
Two other companies that gained market share, Barclays Plc, and State Street Corp., are first and second in exchange-traded fund assets, according to data from State Street. Exchange- traded funds mimic indexes such as the S&P 500. In April, Barclay’s agreed to sell its ETF business, known as iShares, to CVC Capital Partners Ltd. for $4.4 billion.
Lowell, in his newsletter, had urged Fidelity to bid for iShares. “ETFs are beginning to eat everyone’s lunch in this industry,” he said in an interview. Fidelity has $65 million in exchange-traded funds, according to State Street. Vanguard has $40 billion in them.
At Fidelity’s former flagship, Magellan, assets have dwindled to $18.6 billion, Bloomberg data show. Performance has perked up this year: Through April 29, the fund rose 9.9 percent.
Full Story: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aK4.zqAPg2Ng Inflation, Energy & Treasury Bubble (USO, GLD)
Annual Closed-End Fund & ETF Awards – 2008 Winners
NEW YORK, NY--(Marketwire - May 4, 2009) - The Annual Closed-End Fund & ETF Awards, an initiative of Capital Link, a New York-based investor relations and financial communications firm with a strategic focus on CEFs and ETFs, aim to identify and recognize annually those fund sponsors and executives who consistently apply high standards of financial disclosure, investor and shareholder relations and innovation.
Nicolas Bornozis, President of Capital Link, mentioned that the CEF & ETF Awards are based on nominations by a committee of analysts and industry specialists who actively follow CEFs and ETFs. Capital Link is not part of the Nominating Committee. The Awards are presented within the context of the 8th Annual Capital Link Forum on Closed-End Funds & Global ETFs that took place on Wednesday, April 29 in New York City.
CLOSED-END FUND AWARDS - 2008 WINNERS
The Most Innovative New Closed-End Fund in 2008 Award was presented to BlackRock by Mr. Lawrence Leibowitz, Group Executive Vice President, Head of US Markets and Global Technology, NYSE Euronext. Member of NYSE Euronext Management Committee
Mr. Brian D'Anna, Vice President, Product Management and Development at BlackRock, stated: "It is especially gratifying to receive this award from such a distinguished panel of industry analysts. BlackRock is dedicated to the continued innovation of both product structure and composition, and BlackRock Defined Opportunity Credit Trust (BHL) is an excellent example of creating a product structure that appropriately matches the unique long-term investment opportunity in the credit markets."
The Best Shareholder Relations by a non-US Closed-End Fund Family in 2008 Award was presented to Aberdeen Management by Mr. Dennis Emanuel, Managing Director of CEF & ETF Research from Citigroup.
Mr. Tim Sullivan, Vice President, Head of Product Development, Aberdeen Asset Management, who accepted the award, stated: "At Aberdeen we are honoured to be recognized by our peers for our commitment to shareholder communications, which we believe is essential to corporate governance. This award comes at an important time as we are preparing to welcome the shareholders of five Credit Suisse closed-end funds in a transaction that, pending shareholder approval, is expected to be completed July, 1, 2009."
The Best Shareholder Relations by a US Equity Closed-End Fund Family in 2008 Award was presented for the fourth year in a row to Eaton Vance Investment Managers by Mr. Alexander Reiss, Analyst Closed-End Fund Equity Research, Stifel Nicolaus.
Full Story: http://www.marketwire.com/press-release/Capital-Link-Inc-983675.html Tight-Fisted Investing
Keeping costs low is a top priority of this financial adviser. If you don’t need a lot of advice, he says, why pay for it?
Low costs and a blend of stock- and bond-index funds are the hallmarks of the investment philosophy of Richard Ferri, chief executive of investment-advisory firm Portfolio Solutions LLC in Troy, Mich.
The index-based funds provide exposure to designated broad markets and so don’t entail stock pickers or making bets on individual securities. Favoring funds with low fees helps him hold down overall costs for clients: He typically charges 0.25% as advisory fees, less than half the industry standard......
......Here the advisers share a model portfolio used by a large number of their clients. The portfolio falls into four major categories: U.S. stocks, at 30%; foreign stocks, at 15%; bonds, at 50%; and real-estate investments at 5%. The weighted-average expense ratio is 0.16%.
U.S. STOCKS: Of the total portfolio, 21% is invested in the broad stock market through Vanguard Total Stock Market Index ETF. While this ETF has an allocation to stocks of all market capitalizations, the team at Portfolio Solutions uses an additional fund for both small and micro-cap stocks, because they believe these stocks can boost the portfolio’s long-term returns.
They invest 6% of the portfolio in iShares S&P SmallCap 600 Value Index ETF, which tracks an index of small “value” stocks, those considered cheap based on factors like their earnings potential.
For the 3% micro-cap allocation, the advisers for about four years have used Bridgeway Ultra-Small Company Market, a fund that uses quantitative models to invest in the smallest companies in the country, within certain guidelines.
Full Story: http://online.wsj.com/article/SB10001424052970204475004574127223103395870.html State Street Global Advisors rolls out new ETF
State Street Global Advisors, the investment management arm of State Street Corporation, has launched the SPDR KBW Mortgage Finance ETF.
According to State Street Global Advisors, the SPDR KBW Mortgage Finance ETF is the first exchange traded fund (ETF) to provide US investors with precise access to equities in the mortgage finance industry.
The SPDR KBW Mortgage Finance ETF seeks to track the total return performance of the KBW Mortgage Finance Index, a modified market-capitalization weighted index of the stocks listed on US stock markets comprising of pure mortgage players, mortgage processors, title insurers, homebuilders, and banks and thrifts where mortgage loans dominate the loan book.
Full Story: http://www.tradingmarkets.com/.site/news/Stock%20News/2305432/ 
