Dimensional, based in Austin, Texas, is one of the earliest proponents of factor investing. They blend elements of index-based investing and active investing in order to predictably exploit market returns and minimize trading costs. Many of today’s smart beta products — from index providers including FTSE Russell, WisdomTree, Research Affiliates — are based on a similar premise.

John Hancock unveiled in its preliminary prospectuses for the factor-based ETFs that DFA, the market-beating investment firm that adheres to the academic work of Eugene Fama and Kenneth French, will be the sub-advisor for its ETFs. John Hancock has worked with DFA on mutual funds and asset-allocation strategies since 2006.

Looking to invest? Click here to access brokerdealer.com’s options.

John Hancock initially filed plans for ETFs nearly four years ago, but has yet to bring an ETF to market. However, a new filing with the Securities and Exchange Commission indicates the firm is getting closer to launching its first ETFs.

The new filing provides details and expense ratios on the proposed ETFs. For example, the John Hancock Multifactor ETF, which is expected to charge 0.35% per year, will track an index comprised a subset of securities in the U.S. Universe issued by companies whose market capitalizations are larger than that of the 801^st largest U.S. company at the time of reconstitution. In selecting and weighting securities in the Index, the Index Service Provider uses a rules-based process that incorporates sources of expected returns. This rules-based approach to index investing may sometimes be referred to as multifactor investing, factor-based investing, strategic beta, or smart beta.

John Hancock manages nearly $130 billion in mutual funds and money-market funds. Dimensional manages $406 billion. Dimensional already advises on John Hancock-branded mutual funds that have $3.2 billion in assets.

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Hong Kong’s Securities & Futures Commission (SFC) is considering allowing more offshore ETFs, including from the US to be cross-listed in Hong Kong.

The move comes amid calls by some industry players from Hong Kong to diversify its ETF business, because the product range at present is predominantly Greater-China focused.

A senior executive in the ETF business told AsisanInvestor that the SFC that set up a working group to look into expanding the scope of the ETF industry and further developing int. It reached out to individual fund managers towards the end of last year to solicit interest on cross-listing their offshore ETFs in Hong Kong.

The senior executive said their group was interested in listing its American ETF in Hong Kong, but the decision hinges on the SFC and will involve a change in regulatory policy.

To read the full article from AsianInvestor, click here.

The post Asia BrokerDealers Ramp Up For More ETFs appeared first on BrokerDealer Blog.

Brokerdealer.com provides members with the ability to have access to international databases, one the international options is Egypt. Until this week, the Egypt Stock Exchange has not permitted for ETFs to be traded on the exchange. This will on change on Wednesday, January 14, when for the first time, ETFs will be traded. The exchange hopes that this will lead to more foreign investors and boost the economy.

Egypt’s stock exchange will allow trading in Exchange Traded Funds (ETFs) for the first time on Wednesday, as part of efforts to encourage foreign investment and boost liquidity.

ETFs are typically funds that track equity indexes, though they can also track commodities and other assets, with component stocks usually represented in proportion to the size of their market capitalization.

ETFs are traded like a stock and can allow investors to diversify their risks and reduce transaction costs.

The introduction of ETFs in Egypt comes amid a flurry of takeovers and share issues on Egypt’s stock exchange, signalling resurgent interest from international investors in a market looking to restore confidence after the turmoil unleashed by a 2011 uprising which ousted leader Hosni Mubarak.

The main stock index rose about 30 percent in 2014 and trading volumes have rebounded above levels seen in 2010.

“We are working on offering new investment vehicles to investors and in the long run, these funds will help to create liquidity in the market,” Mohamed Omran, chairman of the Egyptian Exchange, told Reuters.

“The funds will help investors reduce risk by investing in the market as a whole.”

The introduction of ETFs will also allow for the emergence of market-makers in Egypt for the first time, potentially boosting liquidity.

Egypt’s Beltone Financial Holding, which specialises in brokerage, investment banking and private equity, won Egypt’s first licence to operate an ETF on the Egyptian Exchange in April.

Its ETF is being launched with an initial value of 10 million Egyptian pounds ($1.4 million), according to Alia Jumaa, head of investment for the new fund.

For the original article from Reuters, click here

The post Egypt’s BrokerDealers Rejoice: ETF Trading is Finally Allowed appeared first on BrokerDealer Blog.

BrokerDealer.com blog update includes extracts from Bloomberg LP reports by Arif Sharif and Sarmad Khan.

Based on recent developments, global investors are now slated to drill for stakes in Saudi Bourse offerings thanks to yesterday’s announcement from ETF behemoth BlackRock, coupled with the next year’s scheduled opening of markets to foreign investors, whose appetite for stakes in Middle East companies is expected to surpass demand for oil, currently the country’s primary export.

Excerpt below courtesy of Bloomberg LP reporting by Arif Sharif

BlackRock Inc. (BLK) plans to start an exchange-traded fund for Saudi Arabian shares as the biggest Arab bourse prepares to open its market to foreigners.

The world’s largest money manager has sought approval for its iShares MSCI Saudi Arabia Capped ETF from the U.S. Securities & Exchange Commission, according to a filing posted on the SEC’s website. The fund will seek to track the results of an MSCI provisional Saudi Arabia index, according to the filing.

“The underlying index is designed to measure the potential equity market in Saudi Arabia, should the market open up to foreign investors,” the filing said. The index “may include large-, mid- or small-capitalization companies and components primarily include financials, materials and telecommunications companies,” it said.

Saudi Arabia, the world’s biggest exporter of crude oil, is preparing to open its $526 billion stock exchange to foreign investors next year. Foreigners currently can’t buy Saudi-listed shares directly, accessing the market through equity swaps and exchange-traded funds instead.

The full story from Bloomberg LP is here

Saudi Arabia’s NCB Rises 10% in Trade Debut After $6 Billion IPO

Reporting courtesy of Sarmad Khan, Bloomberg LP

National Commercial Bank jumped the most allowed on its trading debut after raising $6 billion in the Middle East’s largest share sale.

Shares of Saudi Arabia’s largest bank by assets climbed 10 percent to 49.5 riyals at 12:31 p.m. in Riyadh. The Tadawul All Share Index (SASEIDX), the kingdom’s main measure, gained 0.2 percent.

IPOs in Saudi Arabia, the Arab world’s biggest economy, are picking up as the Tadawul All Share Index plans to open to foreign investors next year as it pursues a $130 billion spending plan to boost non-energy industries. Saudi Arabia typically sells stakes in state-owned companies to the public at below market value as part of efforts to redistribute the country’s wealth.

“For a couple of days at least, or may be three, you will see the stock going limit up,” Saleem Khokhar, head of equities at NBAD Asset Management Group, which oversees about $2.5 billion, said by phone from Abu Dhabi. “It started trading at discount and anything between 50 riyals and 55 riyals is very good value, so you will see investors rushing to grab what’s available.”

National Commercial Bank (NCB) sold a 25 percent stake at 45 riyals a share, attracting 311 billion riyals ($83 billion) of bids for the 300 million shares offered to Saudi investors. It sold another 200 million shares to the nation’s pension fund. The IPO was the second-biggest this year globally after Chinese e-commerce business Alibaba Group Holdings Ltd.’s $25 billion offering, according to data compiled by Bloomberg. Electrical Industries Co. is the latest Saudi company to announce plans for a share sale.

Before the regulator set a limit on daily price moves, offerings surged on their first day of trading. Alinma Bank (ALINMA), a Shariah-compliant lender based in Riyadh, soared 60 percent when it started trading in June 2008, and Saudi Arabian Mining Co. jumped 53 percent in its debut the following month.

To continue reading this story from Bloomberg LP, click here

The post BrokerDealers Drill for Gushers in Middle East: Equity Stake Exports to Surpass Oil appeared first on BrokerDealer Blog.

The iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) and other Brazilian ETFs have been enjoying a mostly excellent 2014, but that ebullience has encountered some resistance in recent days. Investors’ willingness to stick by EWZ and Brazilian stocks in the run-up to next month’s national elections is being tested Tuesday after Moody’s Investors Service lowered its outlook on Brazil’s sovereign debt rating to negative from stable.

That news has EWZ, the largest Brazil ETF, down about 1% in midday trading, extending the ETF’s one-week plunge to 6.3%. That represents a swift change in sentiment for EWZ, which closed at $53.90 on Sept. 2, its highest close since May 2013.

The Moody’s news is not the only glum headline to impact Brazilian equities in recent days. Brazil, Latin America’s largest economy, officially fell into a recession in the first half of 2014. That should play into the hands of Brazilian Socialist Party candidate Marina Silva, but some recent polls show support firming for embattled incumbent President Dilma Rousseff. [Maybe a Big Day for Brazil ETFs]

Moody’s rating action “reflects the rising risk that sustained low growth and worsening debt metrics indicate a reduction in Brazil’s creditworthiness, which would trigger a downward migration in its credit rating,” said the ratings agency.

Moody’s expects Brazilian GDP to grow less than 1% this year, the country’s worst rate since 2009, and by just 2% in 2015.

Continue to ETFtrends.com to read the rest of the story

The post Brazilian ETFs hit snag in Moody’s rating appeared first on BrokerDealer Blog.

In an attempt to gain acceptance into broad MSCI Inc. (NYSE: MSCI) Europe indices, and potentially into related exchange traded funds, Israel’s Tel Aviv Stock Exchange could end its Sunday open schedule and switch over to Western trading days.

Julien Assous, chief executive officer of Israel Brokerage & Investments and a member of the TASE board of directors, revealed that the bourse is considering changing the exchange’s Sunday-to-Thursday trading days, following feedback from MSCI about potential hurdles for wider acceptance, reports Gabrielle Coppola for Bloomberg.

The TASE board is contemplating shifting open days to a Monday-through-Friday schedule.

“If one of the obstacles to us becoming part of the MSCI Europe was us trading on Sunday, hopefully this will take away one of the obstacles,” Assous said in the article. “There are many issues, but being a part of a major MSCI index is the big issue.”

Chief Executive Officer Yossi Beinart is trying to meet with MSCI representatives in October for talks over TASE’s inclusion in the European Index. Former TASE CEO Ester Levanon has stated that a move onto the Europe Index could help attract as much as $2 billion in foreign capital.

A broad Europe stock ETFs, the iShares Core MSCI Europe ETF (NYSEArca: IEUR), which tries to reflect the performance of the MSCI Europe Investable Market Index, does not include exposure to Israeli company stocks. However, MSCI were to accept Israel into its broader European index, IEUR could track some Israeli stocks down the line.

MSCI upgraded Israel from emerging market to developed market status back in May 2010.

Investors can still track Israeli stocks through country-specific ETFs like the iShares MSCI Israel Capped ETF (NYSEArca: EIS), which tries to reflect the performance of the MSCI Israel Capped Investable Market Index.

The trading-day changes would likely still have little effect on Israel-related ETFs as normal operating hours on the TASE do not correspond with normal hours that the U.S.-listed ETFs trade. [The Underlying Value of an ETF’s Portfolio]

The post Tel Aviv Disrupt may carry Israel to MSCI Europe ETFs appeared first on BrokerDealer Blog.

BrokerDealer.com blog post courtesy of extract from ETFTrends.com and Tom Lydon

Give the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) some credit.

The largest exchange traded fund tracking Brazilian equities rose nearly 1.4% Monday, although volume was light, despite news that President Dilma Rousseff improved her showing in a recent poll.

Teneo Intelligence notes that “Rousseff’s approval rating has actually increased from 34 to 38% – a level that tends to auger very well for incumbents a couple of months before elections,” reports Dimitra DeFotis for Barron’s.

Financial markets have overtly displayed a preference for any candidate not named Rousseff ahead of Brazil’s October elections, typically pushing EWZ noticeably higher on days when polls are released showing waning support for the incumbent. That trend was bucked Monday when EWZ gained despite news of increased support for Rousseff. 

[What's Bad for Rousseff is Good for Brazil ETFs]

EWZ and other Brazil ETFS gained Monday because there is more than meets the eye to the aforementioned poll showing increased support for Rousseff. Marina Silva, the candidate replacing Eduardo Campos who dies in a plane crash last week, has drawn nearly even Senator Aecio Neves. Campos was polling at around 8% prior to his death and news of his passing prompted a noticeable intraday sell-off in EWZ last Wednesday. [Brazil ETF Tumbles on News of Campos Crash]

Importantly, Silva could push Rousseff to a run-off and she “would command 47 percent of the vote in the second round, compared with 43 percent for Rousseff, a difference that falls just within the plus or minus 2 percentage point margin of error in a Datafolha poll published Monday, report Anna Edgerton and Raymond Colitt forBloomberg.

A run-off can be averted only if one of the candidates garners more first round votes than the other two candidates combined.

EWZ is up 18.4% year-to-date, making it the second-best performer of the four major single-country BRIC ETFs behind the WisdomTree India Earnings Fund (NYSEArca: EPI).

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