Boost ETP, a London-based provider of short and leveraged exchange-traded products (ETPs), has signed up Morgan Stanley as a new Authorised Participant (AP). Morgan Stanley becomes Boost’s sixth AP, alongside ABN Amro, BNP Paribas, Flow Traders, UBS and Virtu Financial. APs undertake the responsibility of creating and redeeming units in an ETP in the primary market. Theoretically, a greater number of APs should lead to increased liquidity and tighter pricing.
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UBS Global Asset Management has launched a new exchange-traded fund (ETF) on the London Stock Exchange. The fund, the UBS-ETF CMCI Composite, offers diversified exposure to the commodities asset class via a widely diversified and dynamic commodities index. Based on the UBS Bloomberg Constant Maturity Commodity Index (CMCI) Composite, an index developed by UBS in cooperation with Bloomberg, the fund delivers access to 28 commodity futures contracts covering the energy, industrial metals, precious metals, agriculture and livestock sectors.
By David Stevenson – I’m fairly sure that readers of ETF Strategy are an intelligent bunch who know one end of a bad index from another, but even intelligent people make intelligent mistakes (I should know!). My big worry is that investors in ETFs don’t always understand what’s going on in their index. I worry that we spend an inordinate amount of time researching the asset class opportunity and a disproportionately small amount of time researching the index.
Markit, a London-headquartered provider of financial data, analytics and indices, has announced the launch of Markit ETP Analytics, an independent analytics service for the global exchange-traded products (ETP) market. The service is built on the foundation of Markit’s encyclopaedia and composition data, which spans over 5,100 unique ETPs.
By David Stevenson – The sector’s enthusiasm for acronyms has actually tipped over into hubris as it tries to explain why the term ETP is the best catch-all descriptor as opposed to index trackers, ETFs, ETCs, ETNs or any other combination involving the letters E.T. The problem is that very few people in the wider world of normal sentient human beings actually care! Worse still, they find the whole debate completely confusing and counterproductive. I’ve had countless conversations with IFAs who have given up on these products because they can’t quite understand the difference.
The London Stock Exchange (LSE) has slashed fees for market makers in exchange-traded funds (ETFs) in a bid to grow trade volumes and enhance liquidity. Gillian Walmsley, Head of fixed income products at the London Stock Exchange, said: “By lowering the volume thresholds for discounts and reducing the fees for registered market makers, our aim is to further grow trading volumes and support liquidity on our market, and to continue to attract issuers and investors from around the world to London.”
Morningstar has released the results of its fifth online survey of UK investors into the appetite, understanding and use of exchange-traded funds (ETFs), with results showing the ever-increasing importance of one of the hallmark attributes of ETFs – their low cost. Of current ETF investors, 91% cited low costs as being either a “very important” or “important” attribute, compared to 89% last year. Prospective ETF users are also putting greater focus on low costs, with 71% now citing this attribute as being “very important”, compared to 57% last year.
Clients of Barclays Stockbrokers, a leading UK-based execution broker, are increasingly using exchange-traded funds (ETFs) and exchange-traded commodities (ETCs) to capitalise on movements in key UK FTSE equity indices and precious metals markets, according to new analysis. Data for April 2013 revealed that FTSE-related ETFs accounted for four of the top ten most traded exchange-traded products for the month, with ETCs based on gold and silver accounting for three and two of the top ten spots, respectively.
iShares has revealed that UK financial advisers continued to increase their use of ETFs on wrap platforms in Q1 2013, with the amount of iShares’ assets held on major platforms reaching £985m, an increase of 16% on Q4 2012. Pollyanna Harper, Head of Intermediary Sales UK at iShares, said: “In the three months since the implementation of the RDR, we’re encouraged to see a steady increase in the amount of assets advisers are holding in ETFs through platforms. Advisers and investors are becoming more aware of what ETFs are and the benefits they can offer”.
Recent figures released by the Investment Management Association (IMA), the UK fund management industry’s trade body, showed that in the first three months of 2013 following the introduction of the Retail Distribution Review (RDR) net retail sales fell to the lowest level in five years. While many active fund management groups may feel reason to complain, the introduction of RDR has proved a boon for ETF and index fund providers such as Vanguard.