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April 16, 2012 at 06:13 AM
New products introduced over the last week include plans by BlackRock to launch a platform for bond trading that will bypass Wall Street, an agricultural fund from United States Commodity Funds and a fallen angel-bond ETF from Market Vectors.
In addition, a global high-income fund has been rolled out by Saturna, and Grendel Online added ASI’s portfolio-rebalancing solution to its CRM suite.
Here are the latest developments of interest to advisors:
1) BlackRock to Launch Bond-Trading Platform
BlackRock will launch a bond-trading platform this year that will allow it and other money managers to trade bonds directly with one another and leave Wall Street out of the loop.
The new platform is to be run by BlackRock Solutions and will provide a means to trade corporate bonds and mortgage securities, as well as other assets, for 46 clients, including sovereign-wealth funds, insurance companies and other money managers.
The platform, dubbed the Aladdin Trading Network, will match buyers and sellers of the same securities, in a “crossing trades” process, and the company plans to charge far smaller commissions than is customary for Wall Street trading. A test trade has already been completed on Aladdin and launch is expected by the end of the year, according to BlackRock.
2) Commodity Funds Introduces U.S. Agriculture Fund
United States Commodity Funds on Friday introduced the United States Agriculture Fund (USAG), which tracks the SummerHaven Dynamic Agriculture Index (SDAI). USAG’s objective is for the daily changes in percentage terms of its units’ net asset value to reflect the daily changes in percentage terms of the SDAI, less USAG’s expenses.
USAG’s target is a portfolio of agriculture-futures contracts designed to be an investment benchmark for agriculture as an asset class. The SDAI is composed of agriculture-futures contracts traded on major exchanges in the United States and Canada, and it attempts to maximize backwardation and minimize contango while using contracts in the liquid portions of the futures curve.
3) Market Vectors Rolls Out Fallen-Angel Bond ETF
Market Vectors ETF Trust announced Wednesday that trading has begun on Market Vectors Fallen Angel High Yield Bond ETF (ANGL), a fund designed to focus on the U.S. dollar-denominated “fallen angels” segment of the corporate high-yield bond market, which currently accounts for roughly 15% of the dollar-denominated high-yield bond universe.
ANGL seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Bank of Americal Merrill Lynch U.S. Fallen Angel High Yield Index (H0FA), which is comprised of below-investment-grade corporate bonds denominated in U.S. dollars that were rated investment grade at time of issuance.
Bonds may have been issued by either U.S. or non-U.S. issuers, but qualifying securities must be issued in U.S. dollars in the U.S. domestic market for inclusion in the index. ANGL has a gross expense ratio of 0.52% and a net expense ratio of 0.40%, which is capped at least until Sept. 1, 2013.
