This morning, CNBC was discussing their new global index, creted in partnership with the FTSE. This was the first I heard of it; it has apparently been trading since September 1.
Why did CNBC create an index? And, why go with FTSE, when they are half owned by Dow Jones? I’ll assume DJ didn’t want the co-branding relationship, but that’s just a guess.
Here’s the overview:
"The index will maintain a fixed number of constituents, which are derived from the FTSE Global Equity Index Series (incorporating developed and emerging markets).
The index comprises the largest 15 stocks by full market capitalisation from each of the 18 Industry Classification Benchmark Supersectors (using FTSE All Cap Developed Index), aswell as the 30 largest stocks from the emerging markets (using FTSE Emerging All Cap Index)."
Top 10 holdings are the mega caps: Exxon, GE, Microsoft, Citigroup, BP, B of A, HSBC, Pfizer, J&J, P&G. US companies make up 52% of the index, UK firms another ~12%, with Japan just over 7.3%.
I’ll see if I can dig up sometihng more specific later today . . .
UPDATE September 18, 2006 10:07 am
Here are the top 20 components:
| % Wt FTSE | |||||
| ICB | investability | CNBC Global | |||
| Rank | Constituent name | Country | Industry Group | weight | 300 Index |
| 1 | Exxon Mobil Corporation | USA | 1000 | $404,851.58 | 0.06% |
| 2 | General Electric | USA | 2000 | $352,439.48 | 0.13% |
| 3 | Microsoft Corp | USA | 9000 | $259,505.81 | 0.49% |
| 4 | Citigroup | USA | 8000 | $245,872.47 | 0.16% |
| 5 | Bank of America | USA | 8000 | $235,750.51 | 0.04% |
| 6 | BP | UK | 1000 | $224,363.34 | 0.06% |
| 7 | HSBC Hldgs | UK | 8000 | $208,610.53 | 0.25% |
| 8 | Pfizer | USA | 4000 | $203,868.98 | 0.11% |
| 9 | Procter & Gamble | USA | 3000 | $203,628.80 | 0.12% |
| 10 | Johnson & Johnson | USA | 4000 | $189,307.41 | 0.11% |
| 11 | Altria Group | USA | 3000 | $173,566.57 | 0.04% |
| 12 | American Intl Group | USA | 8000 | $168,001.10 | 0.19% |
| 13 | GlaxoSmithKline | UK | 4000 | $165,012.57 | 0.19% |
| 14 | Total | FRA | 1000 | $163,928.07 | 0.05% |
| 15 | JPMorgan Chase & Co | USA | 8000 | $158,891.35 | 0.35% |
| 16 | Mitsubishi UFJ Financial | JA | 8000 | $147,679.09 | 0.04% |
| 17 | Toyota Motor | JA | 3000 | $145,846.07 | 0.02% |
| 18 | Chevron | USA | 1000 | $143,698.09 | 0.07% |
| 19 | Wal-Mart Stores | USA | 5000 | $141,922.97 | 0.09% |
| 20 | Cisco Systems | USA | 9000 | $136,794.52 | 0.16% |
>
Source:
FTSE CNBC Global 300 Index
FTSE:FCNBCG 5090.1
http://www.advfn.com/quote_FTSE-Cnbc-Globa_FTSE_FCNBCG.html
FTSE CNBC Global 300 Index (pdf)
http://www.ftse.com/Indices/FTSE_CNBC_Global_300_Index/
Downloads/FTSE_CNBC_Global_300_Index_Factsheet.pdf
It’s all part of a plan. Step one is creating the index. Step two is licensing it out for use in an ETF that gets sold to the more unwitting of investors. Step three is to spend the licensing money on new sports cars and trips to Bangkok.
Did you not get the memo?
Speaking of CNBC, when is your next appearance on Kudlow?
David Faber just said Amaranth blew up on bad natural gas bet.
Dunno — I haven’t been on in about 2 weeks — he was in DC one week, and this week (at 8pm) is mostly politics. But I do have something way cool in the queue, and i’ll let you know about it as soon as I have the green light.
For a while……a fool and his money are soon to part.
I’m buying pillow co’s for the “soft landing”.
Every time there’s a substantial move in energy either way one of these hedge funds blows up. Do they cause the move or blow up because of the move?
Quick question: has the FED ever cut rates while the stock market is making new highs?
Mike
If you check out Amaranth’s 13-F filing from 6/30/06, you see 5.7B in reportable securities. That implies somewhere around $4B in “other” securities, obviously including energy derivatives. With the fund down 35%, after being up 22%, some $3B-$4B was lost in 2 weeks. Only a portion of the 5.7B in equities and options was energy related, so it means that the fund suffered anywhere from 50-100% losses in the “other” securities. Check out the Bloomberg article below. The quote from Maounis is cryptic “we’re working with our prime brokers and other counterparties…” doesn’t sound like your run of the mill liquidation. Also, they say they were “near the end of our disposition of natural- gas exposure”, how much would they have lost if they were just beginning to dispose of their positions?
Sept. 18 (Bloomberg) — Amaranth Advisors LLC, a hedge-fund manager with $9.5 billion in assets, said last week’s plunge in natural-gas prices left its two main funds with year-to-date losses that may exceed 35 percent.
“We are in discussions with our prime brokers and other counterparties and are working to protect our investors while meeting the obligations of our creditors,” Nick Maounis, founder of the Greenwich, Connecticut-based firm, said in a letter to investors obtained by Bloomberg.
The decline came after the Amaranth funds had gained almost 30 percent through August. Gas prices fell 12.2 percent last week as the U.S. Energy Department reported its first triple-digit inventory increase in more than a year. Demand for the power- plant fuel usually declines after summer air conditioner use slows and before heating needs pick up.
Amaranth was “near the end of our disposition of natural- gas exposure,” the letter said, adding that Amaranth had met every margin call. Steve Bruce, a spokesman for Amaranth, declined to comment.
The firm has an energy trading desk of more than 20 people. Brian Hunter, who works in Calgary, Canada, is Amaranth’s head energy trader.
Maounis spun his firm off from Greenwich-based Paloma Partners in 2000. A convertible-bond specialist who worked at Paloma for 10 years, Maounis started Amaranth with 27 investment professionals and about $450 million in assets. The firm’s initial strategies included trading convertible bonds and the stocks of merging companies.
joe, dont u understand, this is just another reason to buy stocks….
This means CNBC just discovered the word “global” in the dictionary, without realizing that the rest of the world has an implact on US stocks. Then they created a “global” index that is 52% US stocks.
I’ve forgotten where I saw it, but in an article I read about Amaranth, there was mention of a rumor that another (bigger?) hedgie in NYC has scr*wed the pooch too. LTCM redux, anyone?
That aside, it appears to me that something odd is going on of late. Altho you can always find a fundamental reason why the market should crash, the real tell is whether there is a fundamental reason why it should go up and in my view, there isn’t one at present. Of course that doesn’t mean that $INDU and $SPX won’t keep rising until the elections, but it does mean that they will turn around immediately thereafter if they do.
Somewhere on minyanville.com, I read today about a p*ker analogy which ran along the lines of “If you’ve been in the game for half an hour and still don’t know who the patsy is, then you are the patsy.” I’ve been in this game for a while and am pretty sure the patsy is not my good self, but Cramer’s audience, so I am comfortable with some drawdowns.
But in the interest of drifting even farther off of the thread topic, what do you guys think about shorting the REITs via IYR or SPG? These folks appear to be due a good ass whuppin’ (sorry Mr. Nussbaum) and the deep money puts are not extravagantly overpriced, just not that great of a deal.
I think the IYR will probably pay off, but my biggest bet is against the IWM. Small stocks are due for a serious correction. Goldman did a report based on 13-F filings of where the hedge funds were invested, and it was overwhelmingly in small cap names. When someone finally does yell “fire”, it’s going to be fun to watch them all get stuck in the door.
And yes, I know the small to big rotation has been called for going on two years now. But just when everyone gets tired of hearing about it is when it usually makes sense to put on the trade.
Well maybe I am going to lose my a__ but I shorted the QQ at the close today. Wish me luck, I put 80% of available funds with margin on this call.
That’s a phenomenon that happens everywhere, take this other company marketgrader.com they have an index that has beaten the market for years. I’m hoping to see products of them in the US, they currently have some funds but those are just available for europe
But the pickle factory outputs are indispensibly transgressing the volitile statistical indicators. So what inferences might we derive? I really need this answered!