Tracy Alloway and Arash Massoudi report that the ETF industry has a hit a new record, but it's not the kind that index devotees would hope for. The value of settlement failures for 30 of the biggest ETFs rose to $3.96 billion on June 26, Alloway and Massoudi write.
That's the highest level of failed trades since August of 2011, when the value reached $6.6 billion. That number is fueling the burgeoning debate on ETF volatility. Massoudi and Alloway spoke to an unnamed source who heads an ETF trade desk. The source reportedly said that investors get the short end of the stick in these failures because financial institutions don't take on the higher cost of finding other shares.
Arnbjorn Ingimundarson writes about WisdomTree's
] business model and its bet on ETF growth, being the only asset manager focused exclusively on ETFs.
AUM has been "explosive," Ingimundarson writes, as the Japan hedged equity fund reached $1 billion AUM in 2012 and rose to $10 billion less than half a year later. However, Ingimundarson says WisdomTree's
biggest weakness lies in its high concentration of income in Japan hedged equity which comprises a third of its asset composition.
What Planet Are You on?
Olly Ludwig writes that Cumberland's
CIO, David Kotok
is publicly shredding Meredith Whitney
, who says the Detroit bankruptcy is foreboding for municipal bond markets everywhere. Kotok
, who owns muni bond ETFs, says that the next municipal disasters are all avoidable for investors, Ludwig writes.
New Mongolian ETF
Hannah Tool reports that Gencap
filed paperwork seeking permission to launch active funds and plans to launch the first Mongolia-focused ETF. Gencap
, which runs the FactorShares and PreFunds brand , has eight ETFs, three focused on metals and mining and five focused on oil, Treasuries, the dollar and gold, Tool writes.
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