Tag Archives: mohit bajaj

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BlackRock Botches Gold ETF; IOU for IAU

Administrative oversight left BlackRock unable to meet demand for its Gold ETF, IAU; Suspends New Issuance.

(WSJ) –BlackRock Inc. said it suspended the issuance of new shares in IAU, its roughly $7.7 billion gold exchange-traded product due to an administrative oversight, in the latest bruise for the exchange-traded-fund industry and its largest provider.

Analysts said the move on Friday threatens to drive business to competitors and intensify scrutiny of the $2 trillion ETF business in the U.S. It also underscores concerns that these products—baskets of assets that trade intraday like stocks—are vulnerable to breakdowns.

Friday’s suspension came after a 20% run-up this year in the price of gold. The rally had spurred increased demand for the iShares Gold Trust, which is traded on the New York Stock Exchange under ticker symbol IAU. Some analysts said the surge in gold-futures prices likely drove up demand for the product for use both in bets that gold would rise and bets that it would fall. Those wagers came amid uncertainty over the health of the global economy and concerns about resilience of the financial system in the face of negative interest rates in Europe and Japan.

BlackRock wasn’t able to issue new shares to meet the demand because it failed to file the appropriate Securities and Exchange Commission paperwork, the firm said.

The breakdown could prevent the fund from accurately reflecting the value of gold, interrupting a key process that lets investors arbitrage any difference between the quoted price of the ETF and the value of the underlying assets.

The suspension could mean the price of the fund would rise faster than the price of gold until share creation resumes. Investors are “going to be paying more of a markup,” said Mohit Bajaj, director of ETF trading at WallachBeth Capital LLC, which trades iShares Gold Trust. “I think people are going to be trading GLD instead of IAU now,” he said, referring to the ticker symbol for SPDR Gold Trust, which is run by a unit of the World Gold Council and marketed by State Street Corp.

In the week ended Thursday, investors put more than $1.1 billion into the iShares product’s key rival, the about $32 billion SPDR Gold Trust, more than any other exchange-traded product, according to FactSet data.

For the full story from WSJ, please click here

 

MarketsMuse: This ETF Trading Expert Has This To Say About That…

MarketsMuse.com ETF update is pleased to share an informative perspective about best practices and “best execution” that institutional investment managers, RIAs and others should consider when using ETFs, courtesy of insight from one of the more widely respected members of ETF “agency-only” execution space. Here’s the excerpt of the ETFdb.com interview:

etfdb logoAll walks have come to embrace the exchange-traded product structure as the preferred vehicle when it comes to building out low-cost, well diversified portfolios. Furthermore, active traders have also taken note of the inherent advantages associated with the ETF wrapper, embracing the product structure for its unparalleled ease-of-use and intraday liquidity.

ETFdb.com recently had the opportunity to talk with Mohit Bajaj, Director of ETF Trading Solutions at WallachBeth Capital, about his firm’s role in the industry as well as the evolution of ETF trading in recent years.

ETF Database (ETFdb): What’s your firm’s story? What role do you play in the ETF industry?

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This Expert Says: “RISK OFF re High Yield Bond and Utilities ETFs”

MarketsMuse.com update courtesy of coverage by TheStreet.com

Investors should avoid the Utilities Select Sector SPDR ETF (XLU) despite the recent dovish talk by Federal Reserve Chair Janet Yellen, said Mohit Bajaj, Director of ETF Trading Solutions at WallachBeth Capital. Bajaj added that rising rates will hurt the XLU because power companies are levered to debt financing which will become more expensive. He is also bearish on the SPDR Barclays High Yield Bond ETF (JNK) due to the potential for rising rates and problems in the energy sector. On the other hand, Bajaj is bullish on the Financial Select Sector SPDR ETF (XLF) because the large-cap banks will benefit from rising rates and have passed their stress tests. Below is the video interview..

Turm- Oil: Black Gold Turns to More than 50 Shades of Gray for High Yield Bond ETFs

MarketsMuse update on the downtick in oil prices and impact on high yield bond ETFs, including energy-sectory junk bonds includes extract from Institutional Investor Jan 7 coverage by Andrew Barber.

MarketsMuse editor note: The recent implosion of crude oil prices has triggered a conundrum for almost every investment analyst who prides themself on pontificating the domino effect impact on the broad universe of market sectors and asset classes. Much has been said about the how, when and where the trickle-down effect of the lower oil prices will effect corporate balance sheets, and in particular, those with a boatload of outstanding debt.  For high-grade corporate debt issuers, some believe lower energy costs bode will. For high yield bond issuers (companies that typically include energy industry players), the jury remains out for the most part. Experts that MarketsMuse has spoken with believe that if US drillers and frakers cut back on operations and reduce overhead quickly, it will help stem the burn that inevitably results from manufacturing a product that costs almost as much (if not more) to make as it what customers pay for it. Then again, as the supply begins to wane consequent to production cutbacks, market forces will, in theory, cause prices to rise..and those companies will be back in the black before having to sweat too much about interest payments on outstanding debt.

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II’s coverage on the topic is framed nicely via this extract:

mcormond jan15 The impact of rising yield for energy producers on high yield markets has also spilled over into the exchange-traded funds and closed-end funds. “ETFs create a simple wrapper for investors to modify easily their exposure to high yield fixed income markets” says Andy McOrmond, managing director at WallachBeth Capital, a New York-based institutional brokerage that focuses on ETF and portfolio trading. Mohit Bajaj, director of ETF trading solutions, also at WallachBeth, notes that despite the volatility injected into the market for high-yield exchanged-traded products during the recent oil sell-off, short interest has remained relatively stable and borrows have been easily obtainable. Bajaj attritubes this stability to a maturing institutional appreciation of exchange-traded fund products.

 

For the full article from II, please click here

 

ETF Trading Market Veteran Joins Agency-Execution Trailblazer WallachBeth Capital

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NEW YORK, Jan. 8, 2014 (GLOBE NEWSWIRE) — WallachBeth Capital, a leading provider of institutional execution services, announced today that ETF industry veteran trader Mohit “Mo” Bajaj has joined WallachBeth in the newly created role of Director, ETF and Portfolio Trading Services.

Mohit "Mo" Bajaj, WallachBeth Capital
Mohit “Mo” Bajaj, WallachBeth Capital

Mr. Bajaj brings over 10 years of ETF principal market-making and global bank trading experience to agency-only brokerage specialist WallachBeth, most recently serving in a senior ETF facilitation role at Deutsche Bank. According to Michael Wallach, CEO of WallachBeth, “Mo further strengthens our core capabilities and his wealth of ETF and portfolio trading expertise will help our clients navigate the increasingly complex and evolving ETF landscape.”

Added Wallach, “Irrespective of the product we are trading or the client we are serving, our process for executing sophisticated trading strategies at WallachBeth is holistic. Our value-add comes from leveraging a combination of deep product knowledge, extensive trading market insight and, most important, providing an un-conflicted human analytical element. Mo is a perfect complement to a seasoned team that is well-recognized for both their capabilities and thought leadership across the institutional ETF and program trading marketplace.” Continue reading