Barrons Lambastes Fund Execs

Barron's Brendan Conway chided Hector McNeil, co-CEO of Boost ETP, an ETF-maker, for his attack on Federal Reserve economist Tugkan Tuzun, in an IndexUniverse guest piece.

Tuzun wrote a paper on how leveraged ETFs' portfolio rebalancing could accelerate a sell-off, Conway writes, and as a response, McNeil wrote the paper was a 'head-line grabber."

Conway agrees with McNeil on the merits of his argument, in that Conway said he doesn't believe these ETFs will damage the health of the market. Conway wrote a piece criticizing Tuzun's piece, but disagrees with McNeil's theories on Tuzun's intent.

Conway writes, "Is the publication of this research paper intended to grab attention and sensationalize? I don't think anyone can prove that. Here we have a fund executive--a member of a group that may be more or less known for its truth-telling altruism the, say, Fed economists--confidently declaring it in public to be true. Are we really at the point where fund marketers feel comfortable impugning others for purportedly impure or self-interested motives?"

State Street Goes Beyond BRIC

State Street [profile] asked the SEC to open the SPDR MSCI Beyond BRIC ETF, investing in developing-market stocks in Chile, Columbia, the Czech Republic Indonesia Sourth Africa and Turkey, to name a new, Bloomberg's Christopher Condon reports.

This would make State Street the second provider opening a non-BRIC emerging-market ETF, after Emerging Global Advisors opened EGShares Beyond BRICs ETF in the summer of last year, Condon writes. This ETF would help broaden State Street's lineup in a market where Vanguard [profile] and BlackRock [profile] hold $84.6 billion, combined, or 83 percent of all money in U.S. registered emerging-market ETFs not using leverage, Condon reports.

U.S. Exchanges Ask for ETF Rule Changes

"The Wall Street Journal's Chris Dieterich reports that U.S exchanges asked the SEC to exclude select lightly-traded ETFs from market-volatility curbs. The proposal, which would get rid of limit-up/limit-down rules for some ETFs trading less than $2 million in shares a day, is also supported by FINRA, reports Dieterich.

The limit-up/limit-down rules were put into effect after the 2010 "flash crash." Dieterich writes that the rules require stocks and ETFs to trade within certain price bands, bands which include a 15-second buffer for prices to move back within a certain range before a five minute halt begins.

To read more, click here, here and here. 

Edited by: Casey Quinlan


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