Underlying index contains significant exclusion criteria.

 

First Trust is making plans to launch a new exchange-traded fund tied to the community banking industry, according to new papers filed at the Securities & Exchange Commission.

The Wheaton, Ill.-based funds provider filed a prospectus for a new ETF that would track the NASDAQ ABA Community Bank Index, which captures small- and mid-cap community banks listed on the NASDAQ Stock Exchange.

The index has a variety of exclusion criteria designed to maintain a pure-play focus on the community banking sector. Companies entering the index, for example, cannot be among the 50 largest banks or thrifts based on asset size; cannot focus on international servicing; cannot specialize in credit cards; etc. In other words, they are supposed to be local banks.

Community banks follow a different economic paradigm than the New York-centered financial giants; they’re even quite different from the regional banking companies captured by ETFs such as

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Bond giant Pimco launched its first exchange-traded fund this morning, with the debut of the Pimco 1-3 Year U.S. Treasury Index Fund (NYSE Arca: TUZ) on NYSE Arca.

Bond giant Pimco launched its first exchange-traded fund on Tuesday with the debut of the Pimco 1-3 Year U.S. Treasury Index Fund (NYSE Arca: TUZ) on NYSE Arca.

The Newport Beach, Calif.-based asset manager originally filed to enter the ETF market last July, targeting an intermediate-term bond index (see related story here). A few months later as markets were heavily stressed by the ongoing credit crisis, Pimco decided to go with the short-term Merrill Lynch Treasury benchmark to base its first ETF on. (See related story here.) 

TUZ will charge just 9 basis points (0.09%) in expenses, reflecting a 0.13% fee waiver that is contractually in place for at least a year. At 0.09%, TUZ becomes the lowest-cost fixed-income ETF on

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Claymore files request to change ETF from U.S. large-cap-focused to foreign small-caps.

 

In another reduction of alternative indexes that use different valuations and business fundamentals to weight companies, Claymore Advisors is seeking to switch an existing exchange-traded fund to a more traditional market-cap size weighted benchmark.

But that isn't all.

In a filing dated May 21, the trust for the Claymore/Great Companies Large-Cap Growth ETF (NYSE: XGC) is asking the Securities & Exchange Commission to let it invest in much smaller companies. And while listed largely on U.S. exchanges, they'd be foreign-based businesses.

The new fund would be called the Claymore/BNY Mellon International Small Cap ETF.

The document notes that the new ETF's "investment objective is not fundamental" in nature. It clearly states the change will revert to a strictly passive indexing approach. (See filing here.)

The request to regulators by Claymore comes on the heels of PowerShares' decision to close

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U.S. Commodity Funds has filed to launch an ETF that would take short positions with futures relating to oil prices.

 

United States Commodity Funds, developer of the popular U.S. Oil Fund (NYSE Arca: USO), has filed papers with the Securities & Exchange Commission to launch a new fund providing short exposure to crude oil futures prices.

The fund will trade on the NYSE Arca exchange under the ticker "DNO."

The fund will attempt to deliver the inverse of the return of a rolling position in crude oil futures contracts; in essence, it will aim to deliver the inverse return of USO.

DNO will gain exposure by shorting crude oil futures contracts on the New York Mercantile Exchange. This will lead to a very different performance profile than the closest competing fund, the ProShares UltraShort DJ-AIG Crude Oil ETF (NYSE Arca: SCO). SCO uses swap agreements to capture -200% of the return of

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Fool Me Once, Shame on Me, Fool me Twice, Thrice -- You're Doomed: The Sad Saga of Satyam Computers (SAY)What began as a corporate governance issue back in December has now turned into a major financial scandal for the ages in India. The shares of Satyam Computer Services (SAY) has plummeted more than 90% in trading here at the NYSE today, a stark reminder that investors must always cover their backs or else get racked by the likes of Enron, Bernie Madoff or Ramalingam Raju.Early today, Ramalingam Raju, the chairman of troubled Indian IT outsourcing company Satyam Computers (on which we had a Hold rating), sent a startling letter to his board and the Securities & Exchange Board of India. Raju acknowledged his culpability in hiding news that he had inflated the amount of cash on the balance sheet of India's fourth-largest IT company ...

SIBORAP includes these ten specific sections: (1) Product Transparency, (2) Regulation and Education, (3) Protection from Speculators (4) Control of Hedge Funds, (5) Brokerage Account Statements, (6) Retirement Account Investments, (7) Executive Compensation, (8) Corporate Financial Statements, (9) Taxation of Investment and Retirement Income, and (10) Transactional Greed and Fear Controls.

Section Seven: Executive Compensation – continued from Part Three of the SIBORAP report.

Every dollar paid to corporate executives, directors, and employees (in any form whatsoever) in excess of two million dollars would be matched by a ten-cent per share extra dividend to all shareholders and a 10%-of-annual-pay bonus to all employees.

All golden parachutes, separate “non-qualified” retirement plans, stock option and deferred compensation programs, and others that do not benefit all employees and shareholders will be unwound over a three to five year period. Any employee who receives …

SIBORAP includes these ten specific sections: (1) Product Transparency, (2) Regulation and Education, (3) Protection from Speculators (4) Control of Hedge Funds, (5) Brokerage Account Statements, (6) Retirement Account Investments, (7) Executive Compensation, (8) Corporate Financial Statements, (9) Taxation of Investment and Retirement Income, and (10) Transactional Greed and Fear Controls.

Section Five: Brokerage Account Statements.

Investors have a right to brokerage account statements that: (1) help them monitor and manage their asset allocation, (2) report realized gains and losses for the year, (3) track both the cost of their holdings, and their net account deposits, and (4) emphasize the long-term, cyclical nature of the investment process.

Under SIBORAP, all brokerage firms would be required to maintain cost basis information on all holdings, and the ACATS system would be required to provide it in all transfer transactions. Mutual funds would be required …

SIBORAP includes these ten specific sections: (1) Product Transparency, (2) Regulation and Education, (3) Protection from Speculators (4) Control of Hedge Funds, (5) Brokerage Account Statements, (6) Retirement Account Investments, (7) Executive Compensation, (8) Corporate Financial Statements, (9) Taxation of Investment and Retirement Income, and (10) Transactional Greed and Fear Controls.

Section Two: Regulation and Education (continued from Part One of the SIBORAP report).

Security industry regulators will be charged with many responsibilities: (1) educating investors with respect to product content; (2) developing a “hierarchy-of-risk” tool that identifies the risks in all things sold to investors; and (3) preventing the spread of unregulated Internet based investment advice offered by persons of unknown qualifications.

Additionally, they will be responsible for:

(4) Preventing the development of multi-level, multi-leveraged, WMFDs; (5) requiring that all financial blogs include appropriate caveats that speak to the qualifications of …

We the securities investors of the United States, in order to form more transparent financial markets, establish effective regulations, defend against destructive speculation and manipulation, promote financial well-being, preserve working capital, and protect retirement income, do establish this Securities Investors Bill of Rights and Protections (SIBORAP).

These rights are intended to replace, amend and/or abolish all laws and regulations currently in conflict with SIBORAP, and are to be implemented by all parties to financial transactions.

Any institutional efforts to create and/or market securities and/or derivative products that do not comply with the spirit of SIBORAP will result in fines to corporate officers and directors, congressional oversight committee members, regulatory agency directors, and their financial or legal counsel.

All derivative investment products of any kind, any investment programs or specific recommendations promoted in any medium by non-professionals and professionals alike, SEC …