Americas ETP News
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State Street Global Advisors Issues 2012 ETF & Investment Outlook
January 24, 2012--State Street Global Advisors (SSgA)*, the asset management business of State Street Corporation (NYSE: STT - News), today announced the availability of 2012 ETF & Investment Outlook: Sink or Swim. Developed by the SPDR® ETF Strategy & Consulting Group, the new report features insights on macroeconomic trends impacting the financial markets and examines key developments expected to shape the exchange traded funds (ETF) industry and asset flows in 2012.
According to the report, the US ETF industry grew to over $1.04 trillion in assets under management in 2011 – a 5.5 percent increase from the previous year with investor inflows offsetting declining equity prices. During the year, US ETFs attracted $119 billion of new assets, as investors increased their exposure to fixed income, dividend/fundamental strategies, and developed markets outside the US.
“Despite significant headwinds facing the financial markets in 2011, investors continued to increase their appetite for ETFs, which was evidenced by industry assets crossing the trillion dollar tipping point,” said Kevin Quigg, global head of ETF Strategy & Consulting at State Street Global Advisors. “Our 2012 investment outlook is cautious due to the European debt crisis, however, the ETF industry is well positioned to build on its success in recent years, as awareness of the benefits of ETFs continues to grow.”
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Source: State Street Global Advisors
Officials find Volcker rule difficult to define
January 24, 2012--With attention focused on the November elections, Wall Street is looking to reshape a crackdown on banks that was spearheaded by President Barack Obama.
Regulators have stewed over how to enforce a deceptively simple part of the 2010 Dodd-Frank financial reforms — the “Volcker rule,” named after former Federal Reserve Chairman Paul Volcker — that curbs banks from trading for themselves.
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Source: Politico
BATS Exchange Launches First Primary Listing With iShares ETF Today - New iShares ETFs Begin Trading On BATS Exchange This Week
New iShares ETFs Begin Trading on BATS Exchange This Week
January 24, 2012 -BATS Global Markets (BATS), a global operator of stock and options markets, today announced the iShares MSCI Norway Capped Investable Market Index Fund (BATS: ENOR) will begin trading today on BATS Exchange, the first of nine new exchange traded funds (ETFs) sponsored by BlackRock, Inc.’s (NYSE: BLK) iShares® ETF business scheduled to commence trading on the Exchange beginning this week.
“Today marks an important milestone for BATS and we are pleased to welcome these new investment products from iShares, one of the leading global providers of exchange-traded products, to our market,” said Joe Ratterman, Chairman and CEO of BATS Global Markets. “Our goal is to continue to attract dynamic and innovative companies to our market through our focus on customer needs and market quality.”
The nine iShares funds listing on BATS are based on MSCI indexes and are designed to provide investors an opportunity to access various international markets. Seven of the funds are scheduled to commence trading this week including:
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Source: BATS Global Markets
Van Eck files with the SEC
January 24, 2012--Van Eck has filed a post-effective amendment, registration statement with the SEC for the Morningstar Wide Moat Research ETF.
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Source: SEC.gov
State Street Expands ETF Servicing Capabilities With Enhanced Global Technology
January 24, 2012--State Street Corporation (NYSE: STT), one of the world's leading providers of financial services to institutional investors, announced today the expansion of its global servicing capability for exchange traded funds (ETFs). Now leveraging state-of-the-art cloud-enabled technology, State Street’s ETF servicing solution, TotalETF SM, drives full automation throughout the lifecycle of an ETF from the basket-creation process to trade processing and settlement.
The new enhancements provide complete integration to core applications, end-to-end automation and full client transparency via an ETF dashboard available on the company’s client website my.StateStreet.com. Additional functionality includes the geographic expansion of State Street’s Fund Connect ETF order management system and a daily performance attribution capability for ETFs.
“TotalETF will help solve all potential administrative pain points for ETF sponsors globally,” said Frank Koudelka, senior vice president of State Street’s Global Services business.”
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Source: State Street
Vanguard's economic and investment outlook
January 24, 2012--In just-published research, the head of Vanguard's Investment Strategy Group, Joseph Davis, and his colleague, Roger Aliaga-Díaz, discuss the firm's outlook for U.S. economic growth, inflation, interest rates, and returns for stocks and bonds in the decade ahead.
The report also examines the potential implications for strategic asset allocation based on Vanguard's distinct approach to forecasting within the investment industry.
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Source: Vanguard
ETF-Based Strategies Grew 43% as Investors Avoid Active Funds
January 23, 2012-- Money overseen by U.S. investment managers who buy exchange-traded funds instead of individual stocks and bonds rose by 43 percent in the last year, even faster than the growth for ETFs, according to a report from Morningstar Inc.
The 370 ETF-based investment strategies tracked by Morningstar grew to $27 billion in the year ended Sept. 30, the Chicago-based research firm said today. That outpaced the 7.5 percent increase for ETFs and 0.8 percent decline for mutual funds, the company said.
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Source: Bloomberg
Citi and Research Affiliates Launch Fundamentals-based Bond Index Series
January 23, 2012--Citi and Research Affiliates are launching a new global sovereign bond index series based on measures of size. The Citi RAFI(R) Bond Index Series decreases exposure to aging and debt-laden economies such as Japan and the United States and increases exposure to younger, resource-rich countries such as Australia and Canada.
The series extends the pioneering Research Affiliates Fundamental Index(R) (RAFI(R)) methodology to sovereign debt.
Traditional bond indices weight securities based on market capitalization, which results in investors making their biggest bets on the biggest debtors. The new series weights each country by its economic footprint. Specifically, each country's weight is calculated via an equally weighted average of four factors -- GDP, energy consumption, population and rescaled land area. As a result, this methodology results in country weights that reflect each nation's ability to service its debt, which has become a growing concern as the sovereign debt crisis evolves.
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Source: Wall Stret Journal
DB Global Equity Research: ETP market kept consolidating a good year-start by adding $32bn in assets last week
January 23, 2012--Net Cash Flows Review
Equity markets remained in winning streak during last week. The US (S&P 500) advanced by 2.0%; while other developed and emerging markets outside the US did even better; the MSCI EAFE (in USD), and the MSCI EM (in USD) were up by 4.0% and 4.4% during the week, respectively.
Moving on to other asset classes, the 10Y Treasury yield rose by 16bps last week, while the DB Liquid Commodity Index increased by 0.33%. Other sectors were mixed. The Agriculture sector (DB Diversified Agriculture Index), Gold and Silver prices rose by 0.55%, 1.69%, and 8.34%, respectively; while the WTI Crude Oil price fell by 0.24%. Last but not least, Volatility (VIX) dropped by 12.6% ending the week at a sub-twenty reading.
ETP inflows were even stronger during last week taking the YTD cash flow figure to almost $22bn. The total US ETP flows from all products registered $10.0bn of inflows during last week vs $7.0bn of inflows the previous week, setting the YTD weekly flows average at +$7.3bn.
ETF markets experienced positive flows across all asset classes during last week. Equity, Fixed Income, and Commodity ETPs experienced flows of +$8.1bn, +$1.6bn, and +$0.3bn last week vs. +$4.7bn, +$2.1bn, and +$0.2bn the previous week, respectively.
Within Equity ETPs, Large Cap products experienced the largest inflows (+$3.8bn), followed by US sector ETPs (+$1.3bn); while Leveraged vehicles experienced the largest outflows (-$0.5bn). Within Fixed Income ETPs, Corporate products experienced the largest inflows (+$1.0bn) followed by Sovereign ETPs (+0.3bn). Within Commodity ETPs, flows were again shy, with Precious Metals products recording the largest inflows (+$0.1bn).
New Launch Calendar: adding emerging market exposures
There were 2 new ETFs listed on the NASDAQ during the previous week. The new equity funds offer additional access to emerging market regions such as EMEA and Latin America.
Turnover Review: ETP trading remains subdued on lower volatility
Total weekly turnover dropped by 11.5% to $223bn vs. $252bn in the previous week, and more than one-third down from last year’s weekly average of $341bn. The largest decrease was on Equity ETP turnover, which dropped by $24.1bn or 11.0% to $195bn. Fixed Income and Commodity ETP turnover followed with a retreat of 18.0% (-$2.8bn) and 13.1% (-$1.9bn), respectively.
Assets Under Management (AUM) Review: assets soared on strong markets
Last week, total ETP assets increased by 3.0% to $1.11 trillion, driven by bullish markets and sturdy inflows. Assets for equity, fixed income and commodity ETPs moved +$28.8bn, +$1.7bn, and +$1.3bn during last week, respectively. As of last Friday, total assets had grown by 6.6% or $69bn YTD.
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Source: Deutsche Bank - Global Equity Research
With Two New ETFs, iShares Delves Deeper Into Emerging Markets
January 23, 2012--Funds limit their exposure to equities that are based in Latin America and in the Europe-Middle East-Africa region.
January 23, 2012--In an effort to slice and dice emerging markets further, on Thursday, Jan. 19, iShares launched two more emerging-markets-themed exchange-traded funds, focused on specific corners of the world.
The two new ETFs, iShares MSCI Emerging Markets Latin America Index Fund (EEML) and iShares MSCI Emerging Markets EMEA Index Fund (EEME), limit their exposure to equities that respectively are based in Latin America and in the Europe-Middle East-Africa region.
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Source: Morningstar
