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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Why ETFs May Be Dangerous To Your Financial Health |
BondsOnline, September 21, 2011
Although the news surrounding UBS’ loss from its trading desk centered on equity ETFs, we believe it is important to note that the same principles exist for the growing number of fixed income ETFs – approaching 200 funds according to ETF Database.
Jim Cramer's comments on Exchange Traded Funds are worth sharing:
“That a major firm like UBS, with all sorts of risk controls, couldn't see through what a trader might have been doing as he flitted back and forth between the ETFs to the underlyings to the options market, are we really supposed to be able to trust these desks when they tell us not to worry and that ETFs aren't more powerful than the stocks?
Should we trust their assurances that the ETFs, particularly the double and triple ETFs, don't impact the markets in bizarre and difficult to understand ways, including exacerbating trends that shouldn't be exacerbated?
We've created a ton of financial instruments that allegedly give individual investors a chance to trade anything with the same leverage that hedge funds have. This is the super-democracy movement of allowing the little guy to make intraday bets against or with indices using tremendous leverage; bets that pretty much need to be taken off each day because they don't really work as long-term hedges.
No matter that most of the people who use these have no idea that they don't work long-term. No matter that they are too big and powerful vs. the whole market, not just their sectors. The creators have sold the SEC on the idea that these are terrific, ingenious instruments.
The fact that someone could hide $2 bn [ed: now $2.3 bn] in losses on the Delta One desks shows that not only do the promoters of this nonsense claim innocence about their impact, they don't even know how they work.
There are many reasons why individuals hate this market, but [a] major one is that the products they have been sold, mainly ETFs, are just ways of betting that have nothing to do with investing. They don't level the playing field, they distort [it] and, as you can tell from the spate of articles about this rogue trader, there are big desks that every day ensure that every nook and cranny gets exploited, to the detriment of the overall market and even to the detriment, we now learn, of themselves.”
And from Vivian Lewis, editor of Global Investing:
“The idea behind ETFs was that, unlike closed-end funds also traded on markets, they would closely track net asset value of their holdings. Closed-end funds go to premiums or (more usually) discounts from NAV based on market sentiment. The way it would work is that institutional investors would be able to buy wholesale the underlying asset of the ETF, and let the fund manager create new shares if demand rose. And if it fell, they would be able to sell the underlying asset and let the manager destroy unwanted ETF shares. This mechanism would let ETF shares outstanding match the market demand. And it would provide a modest gain to the institutions for this function.
That is the basis for what seems to have gone very wrong at UBS in London. The trigger for the “rogue trades” was not the ETF but the underlying indexes or maybe derivatives tracking them (delta means derivative). But the ETF trading was supposed to be used to offset the risk of those index or derivative positions and wasn't placed at all.”
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| Stuff to look at |
Yield and Income Newsletter: A must have for income investors. subscribe NOW
S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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