Muni ETFs and New Issues

Several new issues launched last week with very positive results. First out of the gate was ProShares FXP(double down China). Volume is hitting one million shares per day and there have been at least six more creation units jumping the assets under management sharply.

Powershares launched two products on thursday. PVI (VRDO-very short-money market type product-tax exempt). Volume totalled almost 100,000 shares for the two days. Spreads have been 2-3 cents wide. We would expect this product to grow steadily. Powershares also launched PHB(high yield) which has been less robust for the first two days of trading. The subprime and CDO credit issues undoubtedly have had an effect on sales of this product though longer term it has real promise.

Barclays launched AIA(Asia 50) on the ARCA platform on friday to a heartening first day volume of over 50,000 shares. This appears to be one of the more successful recent ARCA launches.

On the Muni ETF front, there appears to be a pickup in flow and an improvement in the bids on the ETFs and the muni market in general.

The coming week is slow in terms of new issues with a pick up during the following two weeks.


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