Tag Archives: Vanguard Total Bond Market ETF

Currency Hedge ETFs Win Big at Global ETF Awards

Deutsche Bank’s family of Currency Hedge ETFs won the award for the Most Innovative ETF in the Americas for 2011 at the 8th Annual Global ETF Awards. The awards are given to industry participants for outstanding achievements in the marketplace. In Europe Deutsche Bank tied with the Nomura Voltage Mid-Term Source ETF for the top prize, while the Motilal Oswal Most Shares NASDAQ-100 ETF was named most innovative in the Asia-Pacific region.

The five ETFs under the Currency Hedge banner:
db-X MSCI Brazil Currency-Hedged Equity Fund (DBBR)
db-X MSCI Canada Currency-Hedged Equity Fund (DBCN)
db-X MSCI EAFE Currency-Hedged Equity Fund (DBEF)
db-X MSCI Emerging Markets Currency-Hedged Equity Fund (DBEM)
db-X MSCI Japan Currency-Hedged Equity Fund (DBJP)

The Most Innovative Exchange Traded Product (ETP) in the Americas went to the iPath S&P 500 Dynamic VIX ETN (XVZ), while the db Physical Gold SGD Hedged ETC won in Europe.

Held at the Grand Hyatt Hotel in New York last Thursday, the Global ETF Awards provide a window on how the global ETF industry views itself. Unlike the Capital Link awards, where a small committee of analysts and industry insiders choose the winners, the Global Awards is voted on by the entire ETF industry. Here 520 organizations from around the world voted on who they think are the industry’s leaders and innovators. The awards and ceremony were created and run by the operators of exchangetradedfunds.com.

The evening began with a new prize, the Nate Most Award. Named after the man who invented the SPDR, the first ETF, it’s awarded to the individual who has made the greatest contribution to the ETF Market.

“We honored to be able to celebrate Nate’s place as the father of the ETF and to honor achievements in the ETF industry,” said Arlene C. Reyes, chief operating officer of exchangetradedfunds.com.

The first winner of this new prize was James Rose, senior managing director of State Street Global Advisors, for his commitment to the industry and for setting a standard of excellence. In addition to running State Street’s ETF business he serves as the first chairman of the Investment Company Institute’s Exchange-Traded Funds Committee.

“Nate Most created a product that created an industry and a great product for investors,” said Ross upon receiving the award.

Here is the list of other winners:

Most Innovative ETF Index Provider

The Americas – Dow Jones Indexes
Europe – STOXX
Asia-Pacific – MSCI

Most Widely Utilized ETF Research (Statistical)
Deutsche Bank won in all three regions.

Most Widely Utilized ETF Research (Analytical)
The Americas – Bloomberg
Europe – Deutsche Bank
Asia-Pacific – Deutsche Bank

Best ETF Market Maker

The Americas – Knight
Europe – Flow Traders
Asia-Pacific – Flow Traders

Most Recognized ETF Brand

The Americas – SPDRs
Europe – (Tie) db x-trackers and iShares
Asia-Pacific – China 50 ETF

Best Service Provider
The Americas – BNY Mellon
Europe – (Tie) Northern Trust and State Street Fund Services (Ireland)
Asia-Pacific – SSgA

Most Informative Website

The Americas – SPDRS.com
Europe – etf.db.com
Asia-Pacific – hkex.com.hk

Most Informative Website – Media

The Americas – IndexUniverse.com

If You Can’t Beat ‘Em, Join Em

If you can’t beat ’em, join em.

The word Vanguard describes the person or entity at the forefront in any movement, field, or activity. While the Vanguard Group mutual fund company led the charge into index funds for retail investors, it hasn’t been able to take that position in the ETF field.

On Tuesday, Vanguard announced it would sell its entire line-up of ETFs commission-free to its brokerage clients. This comes on the heels of Charles Schwab and iShares offering commission-free ETFs. However, by offering all 46 of its ETFs, Vanguard now offers the largest selection of funds without commissions. Vanguard also lowered the fees to trade stocks and non-Vanguard ETFs to the range of $2 to $7.

Three months ago, iShares offered to sell 25 of its ETFs on a commission-free basis on the Fidelity Investments platform. This came in response to Schwab’s move to offer free ETF trades on its Web site when it launched its first ETFs in November.

Since ETFs trade on stock exchanges, they must be bought through brokers. Hence, investors must pay commissions. These commissions have been one reason standing in the way of investors using ETFs in a dollar-cost averaging investment strategy. Because of this many no-load mutual funds have been able to withstand competition from ETFs. Even with just $10 trades, this comes out to a 10% on a monthly dollar-cost averaging investment of $100. By removing commissions, these firms are taking direct aim at the no-load mutual fund business.

Already, Vanguard posted significant growth in its ETF division. It’s the third-largest ETF company in terms of assets with $108.8 billion at the end of April, more than double the $50.7 billion in the year-ago month. Year-to-date, Vanguard has seen the most net cash inflows in the industry, $11.7 billion, according to Bloomberg.

Vanguard ETF’s offer some of the lowest expense ratios in the ETF industry, with an average of just 0.18%, compared with the industry average of 0.52% according to Lipper. With the addition of commission-free trades, Vanguard could see its growth rate increase even further.

Its top selling ETFs are the $24 billion Vanguard Emerging Markets ETF (VWO), the $15 billion Vanguard Total Stock Market ETF (VTI), and the $7 billion Vanguard Total Bond Market ETF (BND), according to Bloomberg.

For more commentary see:

The Wall Street Journal

Investment News

ETF Trends

Index Universe

Pimco Enters ETF Market

They’re here!!

Mutual fund firm Pimco launched its first exchange traded fund Tuesday on the NYSE Arca

The PIMCO 1-3 Year U.S. Treasury Index Fund (TUZ) will track the Merrill Lynch 1-3 Year U.S. Treasury IndexSM. The ETF will charge a management fee of 9 basis points, or 0.09%. Index Universe says this is the lowest-cost fixed-income ETF on the market, undercutting the previous lost-cost leaders, the Vanguard Short-Term Bond ETF (BSV) and Vanguard Total Bond Market ETF (BND), by 2 basis points (0.02%).

The bond fund giant also filed to launch six other ETFs. These will cover longer-dated Treasurys and Treasury Inflation-Protected Securities, or TIPS, which resemble other Treasurys but adjust their principal to match changing prices.

  • Pimco 3-7 Year U.S. Treasury Index Fund
  • Pimco 7-15 Year U.S. Treasury Index Fund
  • Pimco 15+ Year U.S. Treasury Index Fund
  • Pimco Broad U.S. TIPS Index Fund
  • Pimco Short Maturity U.S. TIPS Index Fund
  • Pimco Long Maturity U.S. TIPS Index Fund

While today’s offering is an index fund, Pimco has said it hopes to also launch actively managed ETFs. According to Dow Jones, the world’s largest fixed-income manager hopes to use its bond-market acumen to design funds that are easier than other ETFs for market makers to traffic in, potentially lowering costs for regular investors. Barclays Global Investors’ iShare hold most of the assets in ETF bond funds with $72 billion.

The iShares Barclays 1-3 Year Treasury Bond ETF (SHY), with $7 billion in assets and an expense ratio of 0.15% will be the largest direct competitor for TUZ.