Readings: Silver ETF, Asset correlations, Short selling
- Business Standard: First-ever silver ETF set to make a debut
Benchmark AMC’s scheme is called silver BeES and each unit issued under the scheme will be equal to price of 100 grams of silver. The entry load for the fund will be 2.25 per cent during the new fund offering (NFO).
Sebi’s guidelines do not allow ETFs that directly invest in silver. The most widely-traded silver ETFs in the world today are Barclays silver ETF (also called iShares Silver Trust), traded on AMEX, and PowerShares DB Silver fund. Silver tracks gold in terms of returns and prices but is slightly more volatile than the yellow metal.
Benchmark AMC has already got Sebi approval for its quantitative fund, India Value and Momentum Quant Fund, that will invest in securities based on a quantitative stock selection model provided by Citigroup First Investment Management.
Everyone & their grandmother will soon have a ‘quant’ fund on offer. Yay!
- Bespoke: Asset Class Correlations
With that in mind, below we highlight (click here for PDF) a correlation matrix of various asset classes including the S&P 500 sectors, oil, gold, the dollar, the yen, emerging markets, the 10-year note and the FTSE 100.
. . . stocks have become less correlated with oil, gold and Treasuries. Correlations between stocks and the yen have increased the most in the short-term compared to their long-term correlations.
- Big Picture: Those Damn Short Sellers Are Just Killing It!
More than $1.4 trillion of equities worldwide are now on loan, about a third higher than at the start of 2007 . . . almost all of that is being used to speculate that shares will fall.
Conservative fund management firms and custody banks are making billions of dollars from short-selling by lending stocks to facilitate such trades in exchange for lucrative fees.
US prime brokerage firms, most of which are owned by big Wall St banks, will reap revenue of $11bn (£5.5bn) this year. Prime brokerage units provide services to hedge funds. They do not reveal their financial results, but executives who work for the units say they make most of their money from lending to short-sellers.
Making money on the way up, on the way down, and everywhere in between.
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