Blog

Our experts frequently write blog posts about the findings of the research we are conducting.

Displaying 10 out of 21 results for "Short".

Fidelity to Launch Mutual Fund Based on Hedge Fund Strategy

(Oct 2013)

We see it again and again: complex investment strategies packaged into traditionally conservative investments. We have seen corporate debt linked to exotic derivatives positions (structured products), exchange-traded products linked tocomplex futures positions (commodities and volatility ETPs), variable annuities linked to options strategies (structured product based variable annuities), and even certificates of deposit with complex payoff structures (structured CDs). Now, we are seeing more...

The Effect of Oil Futures Markets on ETF Investors

(Aug 2013)

Barron's reporter Brendan Conway is reporting on a relatively rare phenomenon occurring in oil markets that is benefiting some passive investors. Futures contracts for oil are generally more expensive as the time to expiration increases -- i.e. a contract expiring later is usually more expensive.The story goes that there are costs associated with storing oil and as a result the futures prices reflect the impact of these storage costs.

The current situation in the oil markets is the reverse:...

Regulators Impose Record Fine for Brokerage Firm's Supervisory Failures

(Jul 2013)

Yesterday evening, the Wall Street Journal reported that FINRA and several US exchanges fined the brokerage firm Newedge USA, LLC $9.5 million over alleged failures to adequately restrict automated client trading activity that "sought to manipulate U.S. markets for nearly four years." The trading activity took place on several exchanges including NYSE Euronext, NASDAQ OMX, and BATS Global Markets according to the WSJ article. FINRA's press release can be found on the FINRA website.

Newedge...

Missouri Action Against Morgan Keegan Over Municipal Bond Issue Also Illustrates Markup Abuse

(May 2013)

On April 3, 2013 Missouri's Secretary of State of the State submitted a Petition for an Order to Cease and Desist and to Show Cause against Morgan Keegan over taxable municipal bonds Morgan underwrote for the City of Moberly in July 2010. The petition and the Offering Circular for the bonds are available to view online. The story has been picked up by The Bond Buyer and Law360.

Setting aside the Petition's allegations, the trading in this set of bonds highlights markup abuse we have found is...

529 College Savings Plans Underperform Similar Mutual Funds -- Morningstar

(Apr 2013)

On Monday, Morningstar Fund Research issued their 2013 529 College-Savings Plans Industry Survey, which reviews the performance of the 529 industry in 2012. Their study finds that "college savers are continuing to invest in 529 college-saving plans at an impressive clip, even though their performance has lagged that of similar funds in recent years."

529 Plans are typically run by states and are used by investors to save for future education expenses such as college tuition on a...

Stockton California May Proceed with Chapter 9 Bankruptcy

(Apr 2013)

Yesterday a federal judge in California ruled that, despite the objections of bondholders and bond insurers, the city of Stockton could proceed in the process of Chapter 9 bankruptcy. Stockton is a city of almost 300,000 located about 90 minutes east of SanFrancisco Stockton was hard hit by the housing bubble and saw a 16% decline (page 345 of the PDF) in general fund revenue from FY 2008-2009 to FY 2009-2010.

After facing "an immediate and severe fiscal crisis" in early 2012, Stockton became...

Barclays' Structured Product Linked to a Basket of ETFs and Indexes

(Mar 2013)

RISK.net recently posted an article entitled "IWM urges investors to think about risk-adjusted returns" in the structured products portion of their website. The article describes in detail a Barclays product for which Institute for WealthManagement, LLC (IWM) served as the basket selection agent. Interestingly, the basket is composed mostly of ETFs, which have been appearing in structured products more frequently as the ETF industry itself has become more mature. IWM's Matt Medeiros talked...

Apple's Declining Stock Price and Structured Products

(Jan 2013)

Jason Zweig at the Wall Street Journal has an excellent piece on a part of the Apple story that hasn't gotten much press: many equity-linked structured products are linked to the common stock of Apple.

SLCG has recently completed an analysis of the market value of outstanding structured products linked to Apple common stock (AAPL). In the following figure, we plot the total quarterly issuance of AAPL-linked structured products in our database since the first quarter of 2009.

As Apple's common...

IBM Switches to Annual 401(k) Contributions

(Dec 2012)

The Associated Press recently posted a story concerning IBM's effort to cut costs by switching from regular contributions to employees' 401(k) accounts on each paycheck to a lump-sum contribution at the end of each year. This move, clearly in the best interest of shareholders, has real and significant implications to the 401(k) accounts of IBM employees. According to the article, only a minority of companies use this type of arrangement.

About 7 percent of employers offering 401(k)s make...

The Effects of ETF Turnover

(Oct 2012)

Lately there has been a lot of turnover in exchange-traded funds (ETFs), as we noted back in August. InvestmentNews has a great summary of what has happened this year, with 86 funds having closed so far in 2012. They note the important consequences of an ETF closing for investors and advisers:

Even though they are more routine, ETF closings still can create ripple effects that reach financial advisers and their clients. "For an adviser, the worst thing that can happen is, you recommend an ETF...

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