The Markets February 1, 2008

ETF Assets Increase to $608B

The combined assets of the nation's exchange-traded funds (ETFs) rose in December by $36.3 billion, or 6.3%, to $608.4 billion, according to the Investment Company Institute (ICI).
Reported by

On a year-to-date basis, ETF assets increased $185.8 billion, or 44%, an ICI news release said.

Assets in domestic equity ETFs increased $103.1 billion between December 2006 and December 2007 and global equity ETFs assets rose $68.5 billion during this period.

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Assets of bond index funds were $34.6 billion and hybrid index funds were $119 million in December.

During December, the value of all ETF shares issued exceeded that of shares redeemed by $44.52 billion.

The detailed December data can be found at http://www.ici.org/stats/etf/etfs_12_07.html while general information about the ICI ETF data is available here.

Products January 31, 2008

Morgan Stanley Launches Long/Short Hedge Fund of Funds

Morgan Stanley Investment Management (MSIM) has launched the Morgan Stanley Global Long/Short Fund, a fund of hedge funds.
Reported by

The company said the new offering features a diversified, institutional-quality portfolio of long/short equity hedge funds for smaller institutional clients.

With the launch of the Global Long/Short Fund, investors gain access to long/short hedge fund managers around the globe in a fund-of-funds structure for a minimum investment of $100,000.

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“The Global Long/Short Fund offers investors the potential to capture the upside return of global equity markets while helping to reduce downside exposure,” said Mustafa Jama, Head and Chief Investment Officer of Morgan Stanley AIP’s Fund of Hedge Funds team, in a product announcement. “As such, it may serve as an attractive alternative to long only equities investing for those seeking to enhance the risk/reward profile of their equity portfolio.’

The Global Long/Short Fund is intended to be managed for long-term capital appreciation and to have moderate volatility as compared to the equity markets.

The long and short equity strategies in which the Global Long/Short Fund will primarily invest allow the underlying hedge fund managers to use leveraged or short-sale positions to take advantage of perceived inefficiencies across the global capital markets.

The Global Long/Short Fund will invest in approximately 20-25 long/short equity hedge funds. Additionally, unlike most hedge fund products which provide delayed K-1 tax reporting, the Global Long/Short Fund will deliver Form 1099 tax reporting by January 31 of each year, the announcement said.

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