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DB Global Equity Index & ETF Research: US ETP Market Weekly Review: A flat week for the market with bearish flavor for ETPs
November 25, 2010--Market Review
Last week QE2 was put on the back burner for a while as financial markets remained expectant on political leaders and regulators discussions relative to relief efforts and a bailout package to aid the distressed Irish economy. Global equity markets experienced increased volatility during the week, with a bearish flavor in the first half of the week following corrections towards the end of the week for an almost-flat ending.
The S&P 500 was up 0.04%, the MSCI World was down 0.08% and the MSCI EM decreased by 0.82%. The USD appreciated 0.13% against the Euro, and Gold ($) and WTI Crude Oil ($) prices were down by 1.16% and 3.94%, respectively. US ETP flows added to the bearish flavor, with $3.7 bn being extracted from the industry vs $5.5 bn inflows on the previous week. The weekly average ETP flows stands at +$2.2 bn year to date.
Equity ETP flows bewildered by Global Financial Turmoil
QE2 criticism started on Nov 12th fueled the equity outflows trend into last week. US Equity ETPs experienced $3.5 bn outflows vs $4.5 bn inflows on the previous week.
A closer look at the daily flows reveals that the flight could have been worse. As of last Thursday close, Long US and Long EM Equity ETPs had recorded outflows for $6.3 bn and $0.9 bn, respectively. However the Equity Markets were able to correct some loses helped by positive developments on the other side of the Atlantic, releasing significant pressure on the US and pulling up emerging markets as well. Long US and Long EM Equity ETPs recovered $3.1 bn and $0.4 bn in flows on Friday, respectively.
In addition, it is worth noting that the outflow from Long Equity EM ETPs is the first weekly outflow for this segment in the last 3 months, Figure 2. Although this may just be a small step back in the underlying bullish flow trend for EM Equity, this could also be a wearing-out alert for the EM trend.
Fixed Income ETP allocations under overhaul?
Fixed Income ETPs experienced $910 mm outflows last week. An event seldom seen in the past 2 years. This was preceded by almost-flat inflows of $5 mm on the previous week, suggesting that this might be a bit more than just a 1-week isolated event.
A closer look at one of the main categories driving the sturdy inflows trend into Fixed Income ETPs over the current year (i.e. Corporates), provides the following insight:
Investors have begun to revise their asset allocations, moving towards riskier assets in pursue of higher returns. High Yield FI ETPs may have served as an intermediate vehicle providing higher returns than Investment Grade Securities, at a lower risk than equities (Figures 3). The risk/return appetite increase, underpinned by flows data (Figure 3), also suggests that investors may be losing interest in medium and long term corporate debt securities.
Another highlight for the week was the $238 mm that poured into Active Fixed Income ETPs. Active debt oriented products have gathered $1.2 bn since their recent inception. Among the 7 available products, Enhanced Short Duration and Emerging Markets Debt in Local Currency themes have been the favorites. This and other developments suggest that the Fixed Income ETP segment might experience increased activity both in flows and new products in the near future as investors rearrange their objectives and implement their new strategies, and providers prepare to meet the new demand.
Almost every commodity shines but gold
Commodity ETPs gathered $544 mm in fresh money for the previous week. With winter coming to the developed world right around the corner, energy related ETPs took the 1st place prize back home. Crude Oil and Natural Gas ETPs received $295 mm and $102 mm, respectively.
Within the Precious Metals space, Silver ($129 mm), Platinum ($33 mm) and PM baskets ($28 mm) received inflows, however Gold registered outflows for $39 mm. Agriculture Overall ETPs were the lonely companion of Gold in the outflows bench with -$74 mm.
New Launch Calendar
The launch calendar was mute last week. No new listings in the US.
Turnover Review
Avg. Daily Turnover decreased by 1.4% and totaled $65 bn at the end of the week. Fixed Income ETPs turnover recorded the largest absolute increase ($250 mm or 9.3%), while Equity ETPs turnover experienced the largest absolute decrease ($1.2 bn or -2.1%).
Assets Under Management (AUM) Review
US ETPs AUM decreased shyly by 0.8%, backing down to $947 bn at the end of the week. This pullback was mainly driven by outflows from Equity and Fixed Income ETPs. Year to date US ETPs AUM has increased $166 bn or 21.2%.
To request a copy of the report
Source: Deutsche Bank Global Equity Index & ETF Research
CFTC to Hold Open Meeting on Sixth Series of Proposed Rules under the Dodd-Frank Act
November 24, 2010--The Commodity Futures Trading Commission (CFTC) will hold a public meeting on Wednesday, December 1, 2010, at 9:30 a.m. to consider the issuance of proposed rulemakings under the Dodd-Frank Wall Street Reform and Consumer Protection Act on the following topics:
Core principles and other requirements for designated contract markets;
General regulations for derivatives clearing organizations;
Information management requirements for derivatives clearing organizations;
Reporting, recordkeeping and daily trading records requirements for swap dealers and major swap participants; and
Further definition of “swap dealer,” “security-based swap dealer,” “major swap participant” and “eligible contract participant.
read more
Source: CFTC.gov
CFTC Staff to Host Public Roundtable to Discuss Disruptive Trading Practices
November 24, 2010--Staff of the Commodity Futures Trading Commission (CFTC) will hold a public roundtable on December 2, 2010, from 9:30 am to 3:30 pm to discuss issues related to disruptive trading practices. The roundtable will assist the CFTC in the understanding and implementation of Section 747 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The roundtable will be held in the Lobby Level Hearing Room at the CFTC’s Headquarters, Three Lafayette Centre, 1155 21st Street, NW, Washington DC. The discussion will be open to the public with seating on a first-come, first-served basis. Members of the public may also listen by telephone and should be prepared to provide their first name, last name and affiliation.
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Source: CFTC.gov
United States Commodity Funds LLC files with the SEC
November 24, 2010--United States Commodity Funds LLC has filed a Form S-1 for
Units of United States Metals Index Fund
Units of United States Agriculture Index Fund
Units of United States Copper Index
Fund
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Source: SEC.gov
State Street files with the SEC
November 24, 2010--State Street has filed a post effective amendment, registration statement with the SEC.
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Source: SEC.gov
Forecasting U.S. Investment-IMF Working paper
November 22, 2010--Summary: The driving force of U.S. economic growth is expected to rotate from the fiscal stimulus and inventory rebuilding in 2009 to private demand in 2010, with consumption and particularly investment expected to be important contributors to growth.
The strength of U.S. investment will hence be a crucial issue for the U.S. and global recovery. On the basis of several traditional models of investment, we forecast that the U.S. investment in equipment and software will grow by about 10 percent on average over the 2010-12 period. The contribution of investment to real GDP growth will be 0.8 percentage points on average over the same period.
view Forecasting U.S. Investment-IMF working paper
Source: IMF
SEC Announces Agenda and Panelists for Second Field Hearing on State Of Municipal Securities Markets
Hearing Scheduled for December 7 in Washington, D.C.
November 23, 2010--The Securities and Exchange Commission announced today that it will hold its second field hearing to examine the municipal securities markets at its Headquarters in Washington, D.C., on December 7. Topics will include market stability and liquidity, investor impact, and self-regulation.
This is the second in a series of hearings, which SEC Chairman Mary Schapiro first announced in May, taking place across the country and examining a wide range of issues that affect investors in the municipal securities market. Following the hearings, the Commission will release a staff report addressing information learned, including their recommendations for further action the Commission should pursue, which may include rulemaking, recommendation for changes in industry “best practices,” or legislation.
read more
Source: SEC.gov
Deutsche Bank files with the SEC
November 23, 2010-- DBX Strategic Advisors LLC and DBX Advisors LLC (together, the “Advisors”), DBX ETF Trust (the “Trust”) and TDX Independence Funds, Inc. (“TDX Funds”) (collectively, “Applicants) have filed an application for exemptive relief witht the SEC.
view filing
Source: SEC.gov
Deutsche Bank files with the SEC
November 23, 2010--TDX Independence Funds, Inc. and DBX ETF Trust have filed an application for exemptive relief with the SEC.
view filing
Source: SEC.gov
U.S. Department of the Treasury Economic Statistics - Monthly Data Update
November 23, 2010--The Monthly Data for U.S. Department of the Treasury has recently been updated, and is now available.
view updates
Source: U.S. Deaprtment of the Treasury
