Exemptive Relief Needed For ETFs Tied To Lehman?
Source: http://www.indexuniverse.com/sections/newsinfocus/10-news-in-focus/4538-exemptive-relief-needed-for-all-etfs-tied-to-lehman-indexes.html?Itemid=3&utm_source=straightstocks.com&utm_medium=sidebar&utm_campaign=rssPosted on Friday, September 19th, 2008 | In Exchange Traded Funds
ETFs pegged to Lehman indexes total more than $41 billion, according to Citigroup study.
Citigroup has released a research report detailing the exposure that the exchange-traded funds industry has to Lehman Brothers across the wide swath of portfolios on the market.
According to the report, a total of 34 ETFs currently track various Lehman bond indexes, representing $41.8 billion in assets as of Aug. 31.
The ranking of ETF providers in terms of ETFs pegged to Lehman bond indexes is as follows:
- Barclays Global Investors: 14 ETF portfolios
- SPDRs: 10 ETF portfolios
- The Vanguard Group: 5 ETF portfolios
- Market Vectors: 3 ETF portfolios
- ProShares: 2 ETF portfolios
The Citigroup tally is good information, but it’s important to note that the only risk to these portfolios would occur if the underlying index provider were actually changed for the ETFs, which could trigger a major rebalancing.
However, since BGI’s parent now is in the process of buying the index servicing unit as a result of its acquisition of Lehman, those specific types of issues should be minor for bond ETFs pegged to Lehman indexes. (Barclays says it plans to keep Lehman’s indexing group.)
Another interesting side note is the fact that BGI, for one, may need to seek exemptive relief from the Securities and Exchange Commission to offer ETFs that are pegged to indexes it runs.
Index providers must be third parties to the asset managers of ETFs, or the asset managers must seek exemptive relief from the SEC.
Such was the case when Van Eck Global recently launched its Market Vectors RVE Hard Assets Producers ETF (AMEX: HAP). The index for the ETF was created by Van Eck in association with commodities guru Jim Rogers.
A Barclays spokesperson said these issues are being considered within the firm, but it was too soon to provide an answer to any questions regarding the ultimate branding of the Lehman indexes, and related issues such as needing to seek exemptive relief from the SEC for Lehman bond-pegged ETFs.
Last 5 posts by IndexUniverse Staff
- Will UNL Beat UNG? - November 19th, 2009
- A Real Hedge Fund ETF? - November 17th, 2009
- ProShares’ Positive Tax Surprise? - November 17th, 2009
- Better Than Cash? - November 17th, 2009
- Stoxx Indexes Bought; Company Valued At $900M - November 13th, 2009
Barclays, Citigroup, Exchange Traded Funds, index universe, Jim Rogers, Lehman, Lehman Brothers, Market Vectors RVE Hard Assets Producers ETF, Securities And Exchange Commission, The Vanguard Group, USD, Van Eck
 About IndexUniverse Staff (http://indexuniverse.com)
IndexUniverse encompasses the world of indexing and beyond. Our website and related subsites cover product and market developments related to index funds, exchange-traded funds (ETFs), index derivatives (futures / options / swaps), and the sophisticated investment strategies which use these financial tools. Our goal is to provide the industry's best news, columns, research, and features about the dynamic field of index-based investing and trading. Industry professionals, individual investors, business/finance students and academic researchers will find various features targeting their interests and needs. We also provide valuable tools and data to assess markets and investment products, and specialized discussion boards for our registered members to exchange cutting-edge ideas and market views. We aim to be educational, thought-provoking, and most importantly, rigorously independent in our perspective. The development of IndexUniverse was a global effort, originally led by Steven Schoenfeld and Jim Wiandt, supported by John Spence and a diverse team in the U.S., Europe and Latin America, and enhanced by editorial contributors from around the world. The site is now managed solely by Jim Wiandt and the global Index Publications LLC team. The site was originally started by Steven as a data and information complement to his book, Active Index Investing, published by Wiley Finance in July 2004. As he recognized the need and potential for such a resource, in August 2003, Steven partnered with Jim, who as editor of The Journal of Indexes similarly recognized the industry's need for timely, useful and independent information on products and markets. |
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.