Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Hong Kong– 27 November, 2007
Indexing Strategies Asia 2007
Jim Wiandt, Editor
New Frontiers, Growing ChallengesNew Frontiers, Growing ChallengesThe Latest Developments in IndexingThe Latest Developments in Indexing
Jim Wiandt, PublisherJim Wiandt, Publisher
IndexUniverse.com, Journal of Indexes, ETFRIndexUniverse.com, Journal of Indexes, ETFR
IQPC Indexing Asia 2007IQPC Indexing Asia 2007
Hong KongHong Kong–– November 27, 2007November 27, 2007
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
The Core Of My CommentsThe Core Of My Comments
�� New Product Developments New Product Developments
�� Increased access to wider array of asset classesIncreased access to wider array of asset classes
�� Alternative weighting and the move to activeAlternative weighting and the move to active
�� The Separation of Alpha and Beta (core/satellite)The Separation of Alpha and Beta (core/satellite)
�� Alternative structures shift the landscapeAlternative structures shift the landscape
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Asset Class Expanders Asset Class Expanders –– Phase IPhase I
�� MicrocapMicrocap
�� DividendsDividends
�� Increased style and size optionsIncreased style and size options
�� More InternationalMore International
�� Fixed Income finds some competitionFixed Income finds some competition
�� Hello GoldHello Gold
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Asset Class Expanders Phase IIAsset Class Expanders Phase II
�� GLD and IAU bring us bullionGLD and IAU bring us bullion
�� Oil ETFs(?) hit the marketOil ETFs(?) hit the market
�� Commodities products start to roll outCommodities products start to roll out
�� Levered and inverse productsLevered and inverse products
�� International Real EstateInternational Real Estate
�� Specialized microsectorsSpecialized microsectors
�� Much More regional and international options Much More regional and international options
including size and style funds.including size and style funds.
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Assets Still in Core ETFsAssets Still in Core ETFs
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Separation of Alpha and Core/ Satellite Separation of Alpha and Core/ Satellite
�� ItIt’’s all about alpha and risk controls all about alpha and risk control
�� Traditional Core/SatelliteTraditional Core/Satellite
�� Active Management looks more like IndexingActive Management looks more like Indexing
�� Indexing Looks more like Active ManagementIndexing Looks more like Active Management
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Indexing on the RiseIndexing on the Rise
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Expenses TooExpenses Too
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Alternative Weighting and the Move To ActiveAlternative Weighting and the Move To Active
�� It all started with the Rydex S&P 500 Equal Weighted (RSP).It all started with the Rydex S&P 500 Equal Weighted (RSP).
�� Moves up the continuum feeling more active down the line.Moves up the continuum feeling more active down the line.
�� Rydex S&P Pure StyleRydex S&P Pure Style
�� FTSE RAFI PowerSharesFTSE RAFI PowerShares
�� WisdomTree dividend and revenue weightedWisdomTree dividend and revenue weighted
�� PowerShares Dynamic (Intellidexes)PowerShares Dynamic (Intellidexes)
�� Alpha SharesAlpha Shares
�� SPA MarketGraderSPA MarketGrader
�� Straight (not fully transparent) activeStraight (not fully transparent) active
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
A Look At a A Look At a ““FundamentalFundamental”” ControversyControversy
�� History of Cap WeightingHistory of Cap Weighting
�� Value InvestingValue Investing
�� Nothing is a Sure Thing (Q3, 2007)Nothing is a Sure Thing (Q3, 2007)
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Why Fundamental Indexation?Why Fundamental Indexation?
Source: Morgan Stanley Investmetnt Strategies
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Alternative Product StructuresAlternative Product Structures
�� Regulation necessitates changeRegulation necessitates change�� Gold bullion could not be a fund.Gold bullion could not be a fund.
�� Oil can not be held in a vault.Oil can not be held in a vault.
�� ETF structure in certain asset classes not tax efficient or easyETF structure in certain asset classes not tax efficient or easy to track.to track.
�� Implications for the FutureImplications for the Future�� IRS looking at ETN structureIRS looking at ETN structure
�� Alternative structures here to stayAlternative structures here to stay
�� Really with notes, futures, swaps etc., anything is possibleReally with notes, futures, swaps etc., anything is possible
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Exchange Traded Products Driving ChangeExchange Traded Products Driving Change
�� Innovative new structures make changes possible.Innovative new structures make changes possible.
�� Does change sometimes outpace reason.Does change sometimes outpace reason.
�� Is 1,000 products enough/too many? 2,000? 8,000?Is 1,000 products enough/too many? 2,000? 8,000?
�� A quick review of the ETF market for perspectiveA quick review of the ETF market for perspective
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Eensy Weensy SPDREensy Weensy SPDR
Source: Morgan Stanley Investmetnt Strategies
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Rocket ShipRocket Ship
World 2005 USA 2005
World Now Japan
Source: Morgan Stanley Investment Strategies
World 2007 USA 2007
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
ETF Research Resources ETF Research Resources
Fund Managers
Media
Index Providers
Databases
Books and
Publications
Calls, Emails
Brokerages Exchanges
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Jim Wiandt Favorite ETF SourcesJim Wiandt Favorite ETF Sources10. Books & Magazines (Gastineau, Lerner, Wiandt, etc.)10. Books & Magazines (Gastineau, Lerner, Wiandt, etc.)
9. 9. Reuters Newswire, Yahoo data and news wiresReuters Newswire, Yahoo data and news wires
8. 8. Deutsche BoerseDeutsche Boerse
7. 7. Nasdaq.comNasdaq.com
6. 6. iShares.comiShares.com
5. 5. LipperLipper
4. 4. Morningstar (Web sites and Principia Pro)Morningstar (Web sites and Principia Pro)
3.3. State Street Global Advisors (P. SanchezState Street Global Advisors (P. Sanchez--Marin)Marin)
2. 2. Amex.com, Amextrader.com, emails (O. Flemming)Amex.com, Amextrader.com, emails (O. Flemming)
1.1. Morgan Stanley (D. Fuhr, P. Mazzilli) Morgan Stanley (D. Fuhr, P. Mazzilli)
Indexing Strategies Asia 2007
Hong Kong– 27 November, 2007 Jim Wiandt - Publisher
Hong Kong– 27 November, 2007
Indexing Strategies Asia 2007
Jim Wiandt, Editor