FTfm on AV | FT Alphaville

FTfm on AV

Some highlights from Monday’s FTfm.

Warning on high-yield ETF returns
Industry figures blame the poor performance on high turnover and transaction costs that may be particularly problematic for ETFs which need to trade more because bonds go in and out of high-yield benchmarks far more often than, for example, stocks go in and out of the S&P 500

Islamic investment takes on a green tinge
A green sukuk working group has been set up by the Gulf Bond and Sukuk Association, the Clean Energy Business Council of the Middle East and North Africa, and the Climate Bonds Initiative. The group aims to develop best practice and promote the issuance of sukuk to finance projects designed to mitigate or adapt to the effects of climate change

Egypt watchers bet on the long term
Can investors afford not to be in Egypt –the stock market has risen by more than 40 per cent in the year to date. That either means a healthy recovery is under way – the pick-up followed falls of 50 per cent last year – or a crash is coming

So far, so good for the Kay review
John Kay’s interim report provides few clues to his ultimate recommendations, but his declared objectives to move beyond short termism and towards more effective stewardship get a vote of confidence from John Plender

Private equity must no longer rely on IPOs
The number of IPOs completed globally fell 29%, from 479 in 2010 to 338 last year and there is no sign of improvement, which means that private equity deals are going to have to be structured more cautiously

Never mind the quality, look at the weightings
Standard & Poor’s US “dividend aristocrats” equity index has a track record befitting its elitist moniker, but close analysis of a rapidly expanding suite of similar products reveals tantalising hints that outperformance may be driven less by exposure to dividends and more by whether or not indices embrace market capitalisation weighting or equal-weighted portfolio construction

Battling bondholders could cost a lot
The very cowardice of capital that prompts bond exchange offers keeps new capital out of a ruthless borrowing country for years afterwards, cautions John Dizard who thinks there are lessons to be learned from Argentina, which is still paying for its bond haircuts

Who will notice pension tax-break cut?
Certainly not the lower paid, says Pauline Skypala, who thinks UK chancellor George Osborne should bite the bullet and scrap higher rate tax relief on pensions