China Resources Vanguard, the supermarket subsidiary of China Resources (Holdings) Company, has confirmed that it has taken over Century Mart's Pangjiang store in Shenyang and Vanguard will re-develop it into a large retail supermarket. According to Vanguard, the company has signed an agreement with Century Mart, taking over the latter's two outlets in Shenyang and Benxi. [...]

 

Law Firms Threatening Action Against Leveraged ETF Providers

At least two law firms say they're talking to clients who use leveraged exchange-traded funds about potential lawsuits against the funds' providers.

The list is large and includes ETFs sponsored by ProShares, PowerShares, Direxion and ETF Securities, which recently entered the U.S. (see story here.)

How do we know this? The law firms, of course, put out a press release. You can read it here.

 

Two Deutsche Bank Funds Hit By CTFC Ruling

A pair of PowerShares-DB commodity ETFs will be curtailed in how much they can buy in soybeans, wheat and corn due to a decision by the Commodity Futures Trading Commission.

You can read this Bloomberg News report for more details. Also, check Matt Hougan's blog here.

 

SSgA's Hoguet: Sovereign Wealth Funds To Buy SDRs

Special drawing rights, or SDRs, are what the International Monetary Fund uses internally as currency markers to traverse

...

Why Most Investment Systems Simply Won’t Work

by Alexander Green, Advisory Panelist Wednesday, August 12, 2009: Issue #1064

Early in my 16-year career on Wall Street, I made an astonishing discovery: The overwhelming majority of my colleagues – bright, educated, experienced, and articulate – didn’t have the foggiest idea what they were talking about.

This only became obvious in retrospect, when I saw how their carefully constructed financial theories and investment forecasts turned to dust rather than generating any significant profits.

(You’d be surprised to learn, for example, how many investment “pros” lose a substantial percentage of their own money in the market each year.)

The truth is that there are virtually limitless ways to take a beating in stocks – and only a few methods that work well over time. These methods are generally codified into widely accepted investment principles,

...

In this video interview with IndexUniverse's Jim Wiandt, Vanguard founder John Bogle takes on everything from the so-called death of buy-and-hold investing to the wisdom of buying index-based commodity funds.

Click here to watch the interview

It was an extremely interesting Journal of Indexes board meeting, but two things stand out.

 

For those of you who missed it, we’ve posted an array of comments and photos from Wednesday’s Journal of Indexes board meeting. Although the proceedings may have been dominated by John Bogle’s frontal attack on ETFs, a couple of other issues really stood out for me from the day.

First let’s quickly discuss the Bogle data. Jim Ross from State Street Global Advisors I think provided the most eloquent rebuttal to the data. Ross argued that the turnover numbers and holding periods implicit in Bogle’s data are a distortion, owing to the fact that you have large institutional investors and hedge funds doing myriad things with ETFs. These investors may appear to be long the funds, but may have their positions wholly hedged; they may also be short the fund (which requires the creation of

...

A deal that's been kicking around for some time in the rumor mills just got some press coverage.

ATTENTION: This is NOT an April Fool's joke. Though at first blush it may seem more implausible than the April 1 blog I posted about the "Street Shares and iDRS" (a blog that got me into so much trouble in certain circles), the word is that the Vanguard bid for iShares and/or BGI is actually for real.

Well, I'll believe it when I see it. Matt and I have been kicking this around today, and as Matt says, "You have to assume that iShares is less valuable in Vanguard's arms than someone else's. For starters, coming in, you would expect it to slash expense ratios. For instance, EEM would have to be folded into VWO, since those are essentially the same fund. But because VWO's expense ratio is about one-third of EEM's, that means you are taking a fund that made $19

...

It was bound to happen, I suppose. While exchange-traded funds have not yet attracted the multi-trillions of dollars that mutual funds have, ETFs have become popular enough they’re starting to acquire some of the bad habits of their older rivals.

The first generation of ETFs were low-cost, broadly diversified products from firms like Barclays and Vanguard, well suited to average investors wishing to expose the core of their portfolios to the broad equity market.

But we are well into the second phase of ETF proliferation, with more volatile sector ETFs sporting considerably higher price tags. How complex it’s become can be inferred from the fact BetaPro Management Inc. is hosting an all-day Horizons ETF University session today at Ryerson University, part of a seven-city road show. 

BetaPro came under fire last week from consumer advocacy group FAIR for not disclosing clearly enough

…

 

CVC To Keep Staff At BGI?

In this column by Kathleen Pender of the San Francisco Chronicle, Barclays Global Investors' impending deal with European private equity player CVC Capital Partners is reviewed. BGI insists that the new parent won't slash current staffing levels. 

But others aren't so sure, figuring that CVC will streamline operations and unload it during the next bull market. Just a thought ... what if that turns out to be fairly soon? Private equity firms can move fast ... but later this year or even next would seem awfully fast, even for the most optimistic and aggressive speculator. 

You can read the column here.

 

Bogle Takes On Institutional Money Managers

Vanguard founder John Bogle is raising an interesting point these days.

As noted in this New York Times column by Gretchen Morgenson, the indexing pioneer is pointing out that much of Wall Street's excesses resulting

...

Five more SRI-themed ETFs are proposed, each focusing on specific religions and different sets of beliefs.

 

The market for socially responsible investing continues to grow for exchange-traded funds investors. Now, a group based in Oklahoma City, Okla., is proposing a set of faith-specific ETFs to launch in the near future.

FaithShares Inc., which is advised by FaithShares Advisors, is asking the Securities and Exchange Commission for approval to offer five new SRI-themed ETFs. Those would be:

The FaithShares Baptist Values Fund The FaithShares Catholic Values Fund The FaithShares Christian Values Fund The FaithShares Lutheran Values Fund The FaithShares Methodist Values Fund

So far, just two SRI ETFs are available on the market, both sponsored by Barclays Global Investors. Those are the iShares KLD 400 Social Index (NYSE: DSI) and the iShares KLD Select Social Index (NYSE: KLD). The first came out in 2005, and the second at the end of 2006. Combined, both have more

...

Vanguard's CIO doesn't see equities as any less appealing these days, and warns investors not to get too carried away with exotic asset classes.

 

Gus Sauter is Vanguard Group's chief investment officer. He started at the funds giant in October 1987, two weeks before global markets crashed.

In that environment, Sauter took over as head of Vanguard's quantitative equities group, which at the time consisted of only index mutual funds. Since then, the unit has expanded to include a combination of passive and active quantitative strategies. Six years ago, Sauter assumed the company's CIO duties as well.

On Wednesday, IndexUniverse.com's Managing Editor Murray Coleman caught up with the busy Vanguard executive to discuss current market conditions and trends he's watching such as the upcoming launch of the Vanguard FTSE All-World ex-US Small-Cap Index Fund.

 

IU: Is buy-and-hold investing dead?

Sauter: No, I don't think it is. In fact, it's as prudent today

...