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August 22, 2011 at 05:50 AM
This week in new portfolio products, Cantor Fitzgerald announced that it will launch an ETF arbitrage business under Dan Segal, and Van Eck introduced a mortgage REIT income ETF. Also, Cannabis Science announced preliminary approval for a new class of shares, Gemma Wright-Casparius joined the Vanguard Group, and First Trust will ring the opening bell at the NYSE in celebration of the launch of 14 ETFs.
Here are the five latest developments of interest to advisors:
1) Cantor Fitzgerald to Launch ETF Arbitrage Business Under Dan Segal
Cantor Fitzgerald & Co. announced Wednesday the appointment of Dan Segal, formerly of SEG Capital, to launch and build its exchange traded fund (ETF) arbitrage business based in New York. Cantor also appointed Joseph La Grasta, Todd Alberico, and Kanellas Cafcules as ETF trader/market makers. As managing director of the ETF arbitrage group, Segal will report to Jarred Kessler, global head of equities.
Segal served as managing member of SEG Capital LLC, specializing in ETF market making. He was an ETF market maker on the floor of the American Stock Exchange, where he focused on trading broad-based domestic ETFs and served as an ETF specialist for Goldman Sachs. He transitioned SEG Capital’s operations off the floor and expanded the firm’s focus to include more complex international ETFs.
La Grasta served as partner at SEG Capital, trading domestic ETFs, and market maker on the American Stock Exchange. Alberico, who will focus on international and currency ETFs, was an ETF trader at Goldman Sachs, where he made electronic ETF markets. Cafcules, who will focus on fixed income and commodity ETFs, traded ETFs at Goldman Sachs in quantitative fixed income and commodities portfolios.
2) Van Eck Introduces Market Vectors Mortgage REIT Income ETF
New York-based asset manager Van Eck Global announced Wednesday that it has launched Market Vectors Mortgage REIT Income ETF (NYSE Arca: MORT), an ETF offering pure play exposure to the mortgage real estate investment trust (REIT) marketplace.
The new fund is intended to track, before fees and expenses, the performance of the Market Vectors Global Mortgage REITs Index (ticker: MVMORTTR), a capitalization-weighted index that requires constituent companies to derive at least 50% of their revenues from mortgage REITs. This includes companies and trusts primarily engaged in the purchase or service of commercial or residential mortgage loans or mortgage-related securities.
The index had 25 constituents as of July 31, all of which were REITs focused on residential mortgages, commercial mortgages or a mix of both. Unlike other indexes used in mortgage REIT-focused ETFs, the index does not include mortgage finance companies or savings associations.
Mortgage REITs generate income by accessing short-term funding to invest in higher-yielding, long-term mortgage securities and thus are also subject to risks from rising interest rates, since when the spread between short-term and long-term interest rates decreases, the value of a mortgage REITs may decline.
MORT carries a gross expense ratio of 0.54% and a net expense ratio of 0.40%, with expenses capped at 0.40% until May 1, 2013, excluding certain expenses, such as interest. It expects to make quarterly distributions to shareholders.
3) Cannabis Science Receives Prelim 14C Approval from SEC/FINRA
