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DB Global Equity Research: US ETF Market Monthly Review Risk Off Trade Continued on in September: $5.8 bn flowed into FI ETPs
October 10, 2011--To our readers: Starting from this month, we will publish a monthly commentary and review of the ETP market. This new monthly report will replace our first weekly report of each month. We will continue to publish our weeklies for the rest of the weeks which will now focus exclusively on data.
Risk off trade continues
In spite of the announcement of further easing from the Fed, this time in the form of "Operation Twist", equity markets around the world were overwhelmed by the ramping solvency and liquidity threats coming from the European Sovereign crisis during September.
Equity markets in the US (S&P 500) went on free fall mode and lost 7.18% during the month.
The risk off trade continued throughout the month of September and spread from equities into other asset classes such as commodities. However, overall, long only ETPs gathered $3.3bn of inflows in September vs. $2.1bn of inflows in August. Long only equity ETPs experienced $2.3bn of outflows during last month; however the downtrend seems to have lost some momentum as compared to the previous 2 months. In the meantime, long only fixed income ETPs continued their rally and added $5.8bn in inflows during the same period; while long only commodity ETPs edged lower recording outflows of $67m, reversing the trend we had seen in recent months. (Figure 3)
Investors continued to allocate assets in line with the underlying risk-off trade governing the markets during September. Defensive trades again dominated the inflows landscape, although the fear-driven gold inflows were missing in action this time. Our data suggests that investors are seeking preservation of capital in an effort to shield their assets from a possible recession. The following segments of the ETP market gathered sturdy inflows during this period: fixed income investment grade (+$4.1bn), equity international broad including EM and DM (+$4.1bn), equity dividend (+$1.5bn), equity US defensives (+$1.4bn), and currency long USD (+$0.7bn) products. In the meantime, we also saw significant outflows from equity international country including EM and DM (-$1.6bn), and equity US global cyclicals (-$1.8bn) products as investors departed those products believed to be more sensitive to an economic downturn. (Figure 4)
New Launch Calendar: more "Alternatives" to the ETP menu
There were 20 new ETPs and 17 new ETNs listed on NYSE Arca during the previous month. The new products cover four different asset classes and offer access to new markets, industries and strategies.
Turnover Review: Floor activity decreases, but still remains high
Total monthly turnover decreased by 30% to $2.0 trillion vs. $2.8 trillion in the previous month. The three main asset classes experimented declines. The largest decline was on Equity ETP turnover, which dropped by $731bn or 29.4% to $1.75 trillion. Fixed Income ETP turnover retreated by $43.5bn to $80.4bn last month. Finally, Commodity ETPs products turnover fell by $75bn, totaling $144.3bn at the end of September.
Assets Under Management (AUM) Review: ETPs closed under $1 trillion
The equity and commodity prices plunge sent the ETP AUM speedily below $1 trillion straight into negative growth territory for the year. ETPs lost $89bn or 8.5% in assets during September. ETP AUM ended the month at $959 billion or 3.6% down YTD, its lowest level this year.
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Source: Deutsche Bank - Global Equity Research
CFTC.gov Commitments of Traders Reports Update
October 7, 2011--The current reports for the week of October 4, 2011 are now available.
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Source: CFTC.gov
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
October 7, 2011--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Tuesday, October 11, 2011:
Alderon Iron Ore Corp. (TSXVN:ADV) will be removed from the index as well as the S&P/TSX Venture Select Index.
The company will graduate to trade on TSX under the same ticker symbol.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Standard & Poor's Announces Changes In The S&P/TSX SmallCap Index
October 7, 2011--Standard & Poor's will make the following changes in the S&P/TSX SmallCap Index after the close of trading on Tuesday, October 11, 2011:
Shareholders of Candente Copper Corp. (TSX:DNT) approved on August 23, 2011, the Plan of Arrangement whereby the company will spin out certain copper and lead-zinc properties in Peru.
For every 5 shares of Candente held, shareholders will receive 1 share of a new company named Cobriza Metals Corp. Cobriza will trade on TSX for the first time (the ex-date of the spin-off) on October 12, 2011, under the ticker symbol "CZA" and the CUSIP number 19105V 10 5. The spun out shares of Cobriza will be added at zero price to the S&P/TSX SmallCap and Equity SmallCap Indices after the close of trading on Tuesday, October 11, 2011. There will be no divisor changes for either of these indices as a result of these additions.
Effective after the close of Wednesday, October 12, 2011, the shares of Cobriza will be removed from the same two indices and new divisors will be created.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Javelin files with the SEC
October 7, 2011--Javelin has filed a Post-Effective Amendment relating solely to the JETS Contrarian Opportunities Index Fund.
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Source: SEC.gov
Maple Group Provides Update On Regulatory Process
October 7, 2011--Maple Group Acquisition Corporation ("Maple"), a corporation whose investors comprise 13 of Canada's leading financial institutions and pension funds, announced today that it has submitted applications for regulatory approval to each of the Ontario Securities Commission ("OSC"), Autorité des marchés financiers ("AMF"), Alberta Securities Commission and British Columbia Securities Commission, in connection with Maple's proposal to acquire 100% of TMX Group Inc. ("TMX Group") (TSX: X) shares in an integrated acquisition transaction valued at approximately $3.8 billion.
Maple has been advised that each of the applicable securities regulatory authorities has or intends to publish and accept public comments on the securities applications and that the OSC and AMF intend to subsequently convene public hearings in December 2011in respect of the securities applications. Copies of Maple's securities applications are available at www.abetterexchange.com. Maple welcomes the opportunity to continue its dialogue with the securities commissions to address the issues raised in their notices and requests for comments. Maple is also in the process of responding to Supplementary Information Requests issued by the Commissioner of Competition.
Speaking on behalf of Maple's investors, Luc Bertrand said, "These applications mark an important milestone in the regulatory process and set out further details of our vision for an integrated exchange and clearing group that is well-positioned to pursue new growth opportunities and meet the needs of Canada's capital markets and capital market participants. We are moving forward with our offer, our discussions with the TMX Group are ongoing and we remain confident we can obtain all necessary regulatory approvals by early 2012."
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Source: Maple Group Acquisition Corporation
iShares files with the SEC-iShares MSCI EAFE Minimum Volatility Index Fund
October 6, 2011--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI EAFE Minimum Volatility Index Fund.
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Source: SEC.gov
Claymore files with the SEC
October 6, 2011--Claymore has filed a post-effective amendment, registration statement with the SEC for the >Guggenheim Yuan Bond ETF.
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Source: SEC.gov
New Firm First Bridge to Offer Custom ETF Research to Independent Financial Advisors
Founded by former S&P Indices executive
Initial focus on Exchange Traded Funds (ETFs)
October 6, 2011--First Bridge (www.firstbridgedata.com) announced today that it will provide custom research services to independent financial advisors. Its initial focus will be on Exchange Traded Funds (ETFs). First Bridge also provides an ETF screener and comparison tools on its website for a monthly subscription fee.
First Bridge is founded by Aniket Ullal, previously an executive at S&P Indices, where he had product responsibility for S&P's US indices, including the widely tracked S&P 500. The firm will draw on this industry expertise and its independence to become a trusted partner for advisors. First Bridge does not structure or promote any financial products.
First Bridge executes fast turnaround custom ETF research that delivers insights. This could include comparing ETFs within an asset class, preparing a research note on a new type of ETF, analyzing trends in index data, etc. Custom research services are fixed price based on scope and complexity. The web subscription for the ETF screening tools is currently priced at $19/month.
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Source: First Bridge
BlackRock-ETFs: A Call for Greater Transparency and Consistent Regulation
October 6, 2011-Viewpoint
Introduction
For more than twenty years, exchange traded funds (ETFs) have allowed
investors—both individual and institutional—to gain access to a broad range of asset classes using a low cost, transparent investment vehicle that can be easily traded on an exchange. ETFs are investment products that can help individuals build a nest egg, prepare for retirement, or save for their children’s education. They also help institutions such as large pension plans, foundations and endowments meet their financial obligations.
Like all securities, ETFs are regulated by various government agencies in
different countries around the globe. Over the last decade, innovations in the
financial industry, in part driven by technology, have changed capital markets
significantly and have affected the way all securities, including ETFs, trade.
Regulations, however, may need to further adapt to the rapid changes in the marketplace.
At the same time, some financial institutions have launched a variety of new products that trade on exchanges which are also referred to as “ETFs.” However, some of these new products may provide less transparency than traditional ETFs that hold physical securities and may inadvertently introduce additional risk for the investor arising from the management, construction and performance characteristics of these products. With the proliferation of these new products, critics have questioned whether existing regulations ensure that investors fully understand what they are buying and fully appreciate the risks and costs. The industry has much work to do to address such criticisms, including the development of new regulations regarding transparency.
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Source: BlackRock
