AMEX and Tokyo Exchange to Cross-List ETFs

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The American Stock Exchange (AMEX) and the Tokyo Stock Exchange inked a deal today to cross-list and trade U.S. and Japanese exchange-traded funds (ETFs).

The alliance is the latest move by AMEX to set up a global trading platform for ETFs. The exchange has already partnered with the Singapore exchange, and though they currently do not enjoy significant trading volume, five AMEX ETFs are currently trading in Asia. Additionally, AMEX signed a memorandum of understanding with Euronext in February to cross-list and trade ETFs in Europe and the U.S.

"As the globalization of the financial markets continues, there is no question in my mind that innovative, progressive products - like ETFs - will continue to grow in both significance and popularity," said Salvatore F. Sodano, AMEX chairman and CEO.

AMEX begins calculating America's Fastest Growing Companies indexes

The American Stock Exchange began calculating three new stock indexes that could soon have ETFs tied to them. Starting June 14, AMEX began disseminating the values for three Individual Investor Group indexes:

  • America's Fastest Growing Companies Total Market Index (FGT)
  • America's Fastest Growing Companies LargeCap 50 Index (FGL)
  • America's Fastest Growing Companies MidCap 300 Index (FGM)

AMEX previously calculated and disseminated Individual Investor Group's original America's Fastest Growing Companies (small-cap) index (NDI), which Nuveen Investments has licensed for an ETF. Nuveen also has plans to launch four fixed-income ETFs. Initially, Nuveen announced it would release five fixed-income ETFs, but has since scrapped plans for a 20-year Treasury Separate Trading of Registered Interest and Principal Securities (STRIPs) ETF.

Individual Investor Group has 14 sector indexes that it is making available for ETF licensing. To learn more about the methodology for the America's Fastest Growing Companies indexes, click here.

State Street Launches Pan-Euro ETF on Euronext

Trading of an ETF hitched to the MSCI Pan-Euro index began today on the Euronext exchange. The new offering is available only to French investors, and has an expense ratio of 0.50%.

The MSCI Pan-Euro is a cap-weighted index of 193 European companies, with a total market capitalization of about $5 trillion. The new ETF, managed by State Street Global Advisors (SSgA), is the latest addition to the streetTRACKS family, which now is comprised of 12 ETFs. SSgA currently manages 25 ETFs worldwide, including the largest - SPDRs - which had $28.7 billion in assets as of the end of April.

SSgA has plans to soon roll out more ETFs based on MSCI European sector indexes, which are broken down according to the Global Industry Classification System (GICS), developed jointly by MSCI and Standard & Poor's (S&P). Additionally, ETFs tracking MSCI's broad U.K. index and European small-cap index are in the works.

Although Bank of N.Y. manages the second largest ETF in the Nasdaq-100 Tracking Stock, (QQQ), ETFs are currently dominated by SSgA and Barclays Global Investors (BGI). However, given the explosive growth of ETFs in the past few years, other investment firms are gearing up to enter the market.

According to Financial Research Corporation (FRC), ETFs have grown at an annual rate of 128% over the past four years, from $2 billion in assets under management to over $65 billion at the close of 2000. FRC predicts the rapid growth will continue over the next 5 to 7 years, with total ETF assets nearing levels as high as $500 billion.

Dow Jones increases emerging markets coverage in World Index

Effective yesterday, Dow Indexes increased coverage of emerging stock markets in the Dow Jones World Index to 95% from 80%.

"This major step will provide individual and institutional investors with a broader and thus more effective tool to measure the markets on a global scale," said Michael A. Petronella, managing director of Dow Jones Indexes. "As the developed markets in our Dow Jones World Index cover 95% of the underlying market capitalization already, our index family now becomes consistent across all markets."

Dow Jones designates 11 countries as emerging markets - the broader coverage will increase the number of constituents from these countries to 824 from 608. The total number of stocks in the Dow Jones World Index will increase from 4,801 to 5,046.