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BlackRock New Report ETF Landscape: Latin America Industry Review - April 2011
April 5, 2011--This report is a review of the Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) industry in Latin America, at the end of February 2011.
The first ETF to launch in Latin America was the NAFTRAC, designed nine years ago to track the Mexican IPC Index. Since its launch on 16 April 2002 in Mexico it has become the largest ETF in the region with US$6.0 Bn in Assets Under Management (AUM), at end February 2011.
iShares acquired the ETF from Nacional Financiera on 14 May 2009, and it has since been renamed iShares NAFTRAC.
At the end of February 2011, there were 422 ETF/ETP listings in Latin America, of which 26 are locally domiciled ETFs/ETPs with assets of US$10.2 Bn from four providers on two exchanges (BM&F Bovespa, Mexican Stock Exchange), while 396 are cross listings from fifteen providers on two exchanges (Mexican Stock Exchange, Bolsa Comercio Santiago). At the end of February 2011, there were 363 ETFs/ETPs listed in Mexico, 52 ETFs/ETPs listed in Chile, 313 ETFs registered for sale in Chile and 296 ETFs/ETPs registered for sale in Peru.
2011 YTD, assets in ETFs/ETPs listed in Latin America have increased by 0.9% to US$10.2 Bn. This compared to the 2.8% decrease in the MSCI EM Latin America Index in US dollar terms over the same period.
Year to date, ETFs/ETPs listed in Latin America have seen net inflows of US$0.4 Bn YTD, where ETFs/ETPs providing exposure to Mexico experienced net inflows of US$0.6 Bn while ETFs/ETPs providing exposure to Brazil saw net outflows of US$0.3 Bn. In 2010, ETFs/ETPs listed in Latin America had net outflows of US$1.9 Bn, of which ETFs/ETPs providing exposure to Mexico saw net outflows of US$3.3 Bn, while ETFs/ETPs providing exposure to Brazil saw net inflows of US$1.4 Bn.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
NSX Releases March 2011 ETF Data Reports
April 5, 2011--Highlights from the March 2011 reports include:
Assets in U.S. listed Exchange-Traded Funds (ETF) and Exchange-Traded Notes (ETN) continue to reach record levels, totaling approximately $1.08 trillion at March 2011 month-end, an increase of approximately 31% over March 2010 month-end when assets totaled almost $820 billion.
ETF/ETN net cash inflows for the month of March totaled approximately $11.2 billion.
First quarter 2011 net cash inflows reached over $28.9 billion, an increase of 240% over the same time period in 2010 when net cash flows reached $8.5 billion.
ETF/ETN notional trading volume during March 2011 totaled almost $1.8 trillion, representing almost 31% of all U.S. equity trading volume.
At the end of March 2011, the number of listed products totaled 1,173 compared to 971 listed products at the same time last year.
Visit www.nsx.com for full report.
Source: National Stock Exchange (NSX)
Dow Jones Indexes, UBS Investment Bank Announce Daily Currency Hedged Versions Of Dow Jones-UBS Commodity Index - Versions To Reflect Hedging Of Foreign Exchange Risk On A Daily Basis
April 5, 2011--Dow Jones Indexes, a leading global index provider, and UBS Investment Bank today announced the daily currency hedged versions of the Dow Jones-UBS Commodity Index.
Designed as benchmarks for non-U.S. dollar investors, these versions are calculated to reflect the hedging of foreign exchange risk on a daily basis. The indexes aim to provide an easily replicable basis for the creation of financial products, such as exchange-traded funds, for which it is important to enter into or terminate hedging transactions at that day’s settlement value of the reference index.
The new indexes are available in excess return versions, which reflect the return of underlying commodity futures price movements and movements in foreign exchange rates only. Total return versions are also available, reflecting additional assumed return on cash collateral held in the relevant non-USD currency.
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Source: Dow Jones Indexes
Minutes Of The U.S. Federal Open Market Committee, March 15, 2011
April 5, 2011--The Minutes Of The U.S. Federal Open Market Committee, March 15, 2011 are now available.
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Source: Federal Open Market Committee
Canadian, U.S. Clearing Firms Agree To Explore Swap Clearing Link
April 5, 2011--)--Canadian Derivatives Clearing Corporation (CDCC) and New York Portfolio Clearing (NYPC) today announced the signing of a Memorandum of Understanding (MOU) to explore the development of a clearing link for the Canadian swap market to assist in meeting Canada’s G20 commitment of clearing over-the-counter (OTC) derivatives by December 31st, 2012. If successful in reaching a final agreement, the resulting structure could serve as an important cross-border template for other jurisdictions around the globe that are required to meet similar G20 obligations.
“Today’s announcement provides a valuable roadmap for building a clearing solution that best meets the needs of the Canadian OTC derivatives market,” stated Glenn Goucher, President and Chief Clearing Officer of CDCC. “NYPC will be a valuable partner as we seek to deliver a viable swaps central counterparty clearing solution for Canada.”
The Canadian OTC derivatives market—approximately C$37 trillion in notional value—is principally transacted through Canada’s six largest banking institutions with a significant number of the counterparties based in the United States or other foreign jurisdictions. The proposed clearing link agreement would foster the development of an effective clearing solution designed to reduce systemic risk and provide Canadian swap market participants and their trading partners with an optimized solution for clearing. The agreement would also seek to maximize capital efficiencies while maintaining the highest global standards for risk management.
NYPC CEO Walt Lukken added: “NYPC is thrilled to collaborate with CDCC as we explore a clearing link for Canada. This MOU is an important first step in our strategic pursuit to bring OTC swaps into the more capital-efficient structure of NYPC.”
Canadian market participants, including the banks, significant buyside institutions, and the Canadian regulatory community have been actively consulting clearing solution providers as they develop the clearing requirements to meet Canadian G20 obligations.
Source: CDCC and TMX Group
Morgan Stanley ETF Weekly Update
April 5, 2011-Weekly Flows: $5.8 Billion Net Inflows
ETFs Traded $280 Billion Last Week
Launches: 18 New ETFs
Global X Announces Share Split on Colombia ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETF flows rebounded last week, generating net inflows of $5.8 billion
Net inflows were primarily driven by US Sector & Industry and EM Equity ETFs
ETF assets stand at more than $1 trillion, up 7% YTD
13-week flows were mostly positive among asset classes
$28.3 billion net inflows into ETFs over past 13 weeks (International-Developed took in $9.4 billion)
EM Equity ETFs posted meaningful net outflows ($5.9 billion) over the past 13 weeks, but have exhibited net
inflows for three straight weeks (combined $3.4 billion)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
Despite last week’s net inflows, EEM has exhibited net outflows of $8.5 bln over the past 13 weeks, by far the
most of any ETF
SPDR S&P 500 ETF (SPY) was a drag on industry flows again last week, posting net outflows of $1.0 bln;
SPY has historically exhibited net outflows during the 1st quarter of the year and this year was no different
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Source: Morgan Stanley
The NASDAQ-100 Index to Undergo a Special Rebalance
April 5, 2011--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) announced today the NASDAQ-100 Index® (Nasdaq:NDX), will undergo a Special Rebalance effective prior to market open on Monday, May 2, 2011. The Special Rebalance will not change the methodology used to calculate the NASDAQ-100 Index nor the Index Securities.
After substantial research and consideration, NASDAQ OMX decided to enact a Special Rebalance in order to bring the weights of the Index Securities closer in line with their actual market capitalizations.
"The Special Rebalance reflects our commitment to ensure the NASDAQ-100 Index remains a relevant benchmark for investors around the world who track the performance of the U.S. equity market," according to John Jacobs, Executive Vice President, NASDAQ OMX Global Index Group. "The NASDAQ-100 Index will remain an objective, transparent, rules-based index and will be comprised of the same large-cap growth companies that have a legacy of leadership and innovation."
As a result of the Special Rebalance, the underlying characteristics of the NASDAQ-100 Index will remain intact and the sector weights will remain in the same relative order and magnitude. For more information about the Special Rebalance, including the results, visit https://indexes.nasdaqomx.com/docs/NDXSpecialRebalancePresentation.pdf.
The Special Rebalance of the NASDAQ-100 Index will be enacted based on Index Securities and shares outstanding as of March 31, 2011.*
The NASDAQ-100 Index is composed of the 100 largest non-financial stocks listed on The NASDAQ Stock Market® and dates to January 1985 when it was launched along with the NASDAQ Financial-100 Index®, which is comprised of the 100 largest financial stocks on NASDAQ®. These indexes act as benchmarks for financial products such as options, futures, and funds. The NASDAQ-100 Index is re-ranked each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.
On a cumulative price return basis, the NASDAQ-100 Index has returned approximately 1771% since inception, although past performance is not indicative of future performance. The NASDAQ-100 Index is the basis of the PowerShares QQQ Trust (Nasdaq:QQQ) which aims to provide investment results that, before expenses, correspond with the NASDAQ-100 Index performance. In addition, options, futures and structured products based on the NASDAQ-100 Index and the PowerShares QQQ Trust trade on various exchanges. To learn more about the criteria for inclusion to the NASDAQ-100, visit NASDAQ-100 Index.
Source: NASDAQ OMX
Deutsche Bank Team Quits to Launch Hedge Fund
April 5, 2011--A 17-year Deutsche Bank AG veteran who was instrumental in building its emerging-markets trading business has left the bank with a team of seven traders to launch a hedge fund.
Kay Haigh, who joined Deutsche in 1994, had been head of emerging markets debt trading and was head of global macro trading before he left the bank last week. Deutsche Bank confirmed Mr. Haigh's departure and declined to comment further. Mr. Haigh has incorporated a new company called Avantium Investment Management, according to public documents. He is preparing to launch a global macro emerging markets fund in the fourth quarter, once the venture has been given approval by the Financial Services Authority.
Source: Wall Street Journal
SEC Announces Filing of Limit Up-Limit Down Proposal to Address Extraordinary Market Volatility
April 5, 2011--The Securities and Exchange Commission today announced that national securities exchanges and the Financial Industry Regulatory Authority (FINRA) today filed a proposal to establish a new “limit up-limit down” mechanism to address extraordinary market volatility in U.S. equity markets.
Under the proposal, trades in listed stocks would have to be executed within a range tied to recent prices for that security.
The Mexican Derivatives Exchange and CME Group Cross-Exchange Order Routing Link Goes Live
Phase I of Strategic Partnership Provides “South-to-North” Trading
April 4, 2011-- The Mexican Derivatives Exchange (MexDer), the derivatives subsidiary of the Mexican Exchange (Bolsa Mexicana BMV), the second largest exchange in Latin America, and CME Group, the world's leading and most diverse derivatives marketplace, today announced the successful launch of their south-to-north connection, giving Mexican investors access to CME Group’s benchmark derivatives contracts including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.
“The direct, seamless order routing connection will make it possible to trade and route electronic orders on MexDer and CME Group, opening both their contracts to a broader range of traders,” said Luis Téllez, Chairman and CEO of BMV Group. “Our partnership with CME Group will strengthen CME Group’s ties to the fast-growing Mexican market, and give Mexican market users access to the CME Group’s suite of derivatives products.”
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Source: CME Group
