The Impact Of New Laws On Financial Traded Funds For many years investors to keep their money in money market funds, these funds that provide assets with a return on short-term, enable investors to buy its assets for $ 1 each asset. 100K Factory Revolution Review Investors prefer to individuals investing in these financial funds because they offer returns in the short term the greatest returns offered by bank deposits. But the global financial crisis of 2008, increased the US Securities and Markets Authority fears of the impact of these funds on the markets in the event of another financial crisis.
What made this body, which is the largest organization of capital markets staff in the United States to enact a set of new laws during 2016, which will do starting from the month of October of the same year. Among the most prominent new procedures to cancel the base “of $ 1” provided most of the cash financial funds, so that the price of the underlying will change depending on variables and market conditions, as well as some fees and commissions that will be added in the case of an investor wanted to withdraw his money in bad market conditions.
Financial cash funds
Monetary and financial funds, also known as the cash market, are investment funds that invest in assets with short-term income securities, bonds of US Treasury trading and securities tradable unsecured and with a fixed maturity repayment period from one day to 270 days. Investors these financial funds and is considered safe assets with a greater return of deposits offered by commercial banks. The total assets in this market of 2.7 thousand billion dollars in the United States of America.
Financial cash funds designed to reduce exposure to losses resulting from loans and market risk and liquidity risk. These investment funds are subject to the control of the US Securities and Exchange Commission (Securities and Exchange Commission (SEC)). And investing in high-security loans and financial instruments that are maturing less than 270 days.
After the global financial crisis of 2008 and the securities markets and US regulatory bodies and other body began by making Takovadtha of these funds and their ability to destabilize financial markets in the event of a financial crisis. To start so these bodies starting in 2014, new laws governing the transactions and investment funds in the financial cash.
Traded Index and the effect of the new laws funds
ETFs, known in the world of financial markets, the symbol ETF (exchange-traded fund), is an investment fund traded on stock markets, in the same way in which the stock trading. Each fund tracks the price range of shares or bonds movement, or the price of a particular commodity. Most ETFs are tracking the movement of the stock market indices, as well as certain sectors of the stock and bond market indices. These funds, attract a lot of investors because the United Trading Network Review investment cost little compared to other financial instruments, and take advantage of tax concessions may sometimes up to full exemption.
The age of the new rules by the Securities and Exchange Commission relating to monetary and financial funds, which will take effect from mid-October 2016, aims to reduce risk by trying to prevent investors from closing their positions in time unit in the event of a crisis. But these new laws has not received satisfaction of investors and fund managers who invest in money market assets with short-term returns. Which may be a positive factor for some ETFs that may be a refuge for those affected by the new laws investor funds. The most important ETFs that could benefit from the new rules issued by the US Securities and Exchange Commission are the following funds:
– SPDR Barclays 1-3 Month T-Bill ETF (BIL): indicators fund trader with a return in the short term, is to invest in US Treasury bonds for shorter maturities or equal to 3 months. Of the fund value of $ 1.6 billion, and at a cost of 0.14% of the amount invested, or $ 14 for each $ 10,000 invested. The yield on the fund and arrive at the current time on the 0.13% on a monthly basis.
– IShares Short Treasury Bond ETF (SHV): indicators fund trader with a return in the short term, is to invest in US Treasury bonds with a maturity of up to 12 months. This fund provides financial back up to 0.30% on a monthly basis. While worth $ 3.4 billion in terms of total assets with a cost of 0.15% in.
– Goldman Sachs Treasury Access 0-1 Year ETF (GBIL): indicators fund trader with a return in the short term, is to invest in US Treasury bonds like “T-notes” and “T-bills” bonds that are maturing less than 12 months. The cost of investing in this fund 0.14% while the value of the total assets of $ 20 million.
– Guggenheim Enhanced Short Duration ETF (GSY): traded fund indices with a return in the short term, of the value of total assets under management of $ 907 million and seeks to outperform Treasuries Index “Barclays Capital 1-3 Month U.S. Treasury Bill Index”. This fund will invest in a wide range of fixed-income financial instruments, like financial commercial paper and bank loans, with the period of entitlement to an average of 15 months, while the cost of investment in the fund of 0.25% with a return of 1.13% on a monthly basis.
– PIMCO Enhanced Short Maturity Active ETF (MINT): current indications fund a return in the short term is worth the total assets under management of $ 4.9 billion, and aims to achieve a higher proportion of middle-profits offered by financial funds cash dividends, and by investing in loans short-term and high-quality. The cost of investing in this financial fund of 0.25% with a return of 1.13% on a monthly basis.
– FlexShares Ready Access Variable Income Fund (RAVI): Fund current indicators is return on short-term value of the total assets it manages $ 98 million. The fund invests in the same outbound investment feature of the US Treasury and the governments of other countries, as well as to invest in corporate bonds loans. The cost of investing in this fund 0.25% with a yield of 0.75% on a monthly basis.