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DB Global Equity Index & ETF Research : US ETP Market Weekly Review: Assets Under Management On The Rise
November 10, 2010--US Market Welcomes US Mid-Term Elections Results, QE2 and New Jobs Data
After a quiet couple of weeks, the market resumed its rally on the ground that the outcome from US Elections, QE2 and the new jobs data will be positive and lead towards the expected financial recovery of the US. Although there is no 100% consensus among regulators, analysts and people on whether these results and measures will achieve its goal, the market had a clear response for each of these events.
The US Equity Market, measured by the S&P 500 index, was up 3.6% during last week accompanied by $7.0 bn new flows into US Equity ETPs. The timing of the flows and the market performance was highly correlated to last week’s news.
Amidst this favorable environment, US ETPs AUM reached an all time high of $968 bn for a total 23.9% increase YTD, in line with our average end of year target of 20.9%.
EM Equity ETPs continue to receive steady flows on rising DM Equity flows
ETP flows figures suggest that EM equity markets continue to be appealing to investors as money continues to pour in steadily beyond Q3 into Q4, EM products have received $ 8.8 bn so far into Q4.
On the other hand, the latest economic developments in the DM markets, particularly in the US, have given a boost to the equity markets rally which began in the beginning of September, while at the same time attracting significant inflows. DM ETPs have gathered $7.8 bn of fresh money quarter to date.
Is Gold Riding the Trend On No Steam? Look Out For Silver
The price of gold has climbed 6.52% since the end of Q3 and stands today at all-time record highs. However Gold ETPs flows suggest that there is something wrong with this picture. Unlike the Q2 gold price rally we experienced earlier this year in which the golden metal rose 11.59% and accumulated massive flows of over $8 billion, this time the metal rally has been flow-less, or better said, with outflows. In addition, an environment of lower volatility and rising equity market, as the current one, shifts the views of investors back to equities away from safe havens, which is completely opposite to what we experienced during Q2.
Although some analyst’s fundamental views on the metal support a further increase in the price of gold, the ETP flows pattern suggests that gold may be running out of steam on its ride towards higher levels. On the other hand, we see other precious metals, such as silver, performing an attempt to take on the leading role (or at least part of) within the precious metals space. Silver price has surged 22.9% since the end of Q3 and the metal has accumulated over $1 billion of steady inflows so far.
Cash Flow Review
Total ETP inflows in the US added up to $7.8 bn last week vs $1.9 bn on the previous week, more than three times this year’s average weekly flow of $2.2 bn. Equity, Fixed Income, Commodity ETPs had inflows of $7.0 bn, $546 mm, $314 mm, respectively. While, on the contrary, Currency ETPs recorded $72 mm outflows.
Within Equity ETPs, products focused on the US received the largest inflows ($5.6 bn), followed by Emerging Markets focused ETPs ($1.3 bn). While Long Leveraged ETPs experienced the largest outflows ($200 mm).
The Fixed Income ETPs inflows were led by Corporates ETPs ($319 mm), followed by Sub-Sovereign ETPs ($176 mm). Within Corporate ETPs we saw increased activity in the High Yield sector, while Emerging Markets Debt ETPs were the most active on the Sub-Sovereign side. On the outflows side, Sovereign ETPs recorded the only negative flows figures for the category.
Commodity ETPs’ flows have lost steam as gold investors have sat on the sidewalks. Silver ETPs received the largest inflows ($181 mm), followed by Crude Oil ($102 mm).
New Launch Calendar
There were four new products added to the ETP lineup over the previous week, three of them chose NYSE Arca as the listing venue, while the remaining one was listed on Nasdaq.
Global X Funds launched two ETFs offering access to new niche investment segments, GLDX will attempt to offer exposure to Gold Miners focusing on the exploration phase, therefore the fund will offer access to a mix of gold/venture capital risk and return. The other fund, URA, is an alternative-energy play and offers access to Uranium related companies.
The other two funds were launched by PIMCO and Vanguard, and offer access to the US Broad Treasury and Global ex-US REIT markets, respectively.
Turnover
Avg. Daily Turnover remained flat and totaled $63 bn at the end of the week. Commodity ETPs turnover experienced the largest increase ($227 mm or 6.3%)
Assets Under Management (AUM)
US ETPs AUM rose by 4.2%, reaching a new record high of $968 bn at the end of the week.
To request a copy of the report
Source: Deutsche Bank Global Equity Index & ETF Research
iShares Announces Launch of New iShares Russia Exchange Traded Fund
November 10, 2010--BlackRock, Inc. today announced that the iShares Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, launched the new iShares MSCI Russia Capped Index Fund (ERUS) on the NYSE Arca. The new fund launch completes the suite of iShares BRIC single country funds. In addition, with the launch today, the iShares international single country offering includes nearly 40 ETFs and 19 dedicated to emerging countries.
"The new iShares MSCI Russia Capped Index Fund offers greater precision and access to the 12th largest economy in the world(1)," said Noel Archard, Head of US Product at iShares, BlackRock. "The new iShares fund further enhances our large single country iShares ETF lineup to respond to requests from financial advisors and investors for greater precision in implementing their international-focused investment strategies and interest in getting deeper access to emerging market stocks to help diversify portfolios."
The iShares MSCI Russia Capped Index Fund seeks to track the MSCI Russia 25/50 Index, which is a free-float adjusted market capitalization weighted index designed to measure the performance of equity securities listed on stock exchanges in Russia. The benchmark index is a customized variation of the MSCI Russia Index, designed to cap certain weightings to take into account the investment diversification requirement applicable to U.S. regulated investment companies. The top three sectors in the index as of October 15, 2010, are Energy (50.7%), Materials (18.4%) and Financials (14.5%).
Source: BlackRock
Q310 ETF Investor Snapshot from Charles Schwab
November 10, 2010ETF Trends at Schwab:
ETF assets custodied at Schwab have grown to $100 billion, up 30%
over the past year and 14% in the past quarter. Retail Investor ETF
assets have grown 57% and now account for 37% of the total ETF
assets at Schwab.
12-month combined Retail flows outpaced RIA Client flows; flows
are 53% for all Retail and 47% for RIA Clients.
While only 9% of total ETF assets, the top 5 ETFs in terms of Q3 2010 flows account for over 25% of all ETF flows for the quarter.
Client Segment Flows:
US Fixed Income has seen the largest 12-month flows (29% of total ETF flows), driven by RIA Clients who account for 56% of total US FI ETF flows.
request report
Source: Charles Schwab
Global X Funds Launches First Norway ETF
Noivember 10, 2010--Global X Funds, the New York-based provider of exchange traded funds, launched today the Global X FTSE Norway 30 ETF (Ticker: NORW). This is the first ETF offering access specifically to Norway.
Norway is one of the most developed economies in the world, ranking first on the Human Development Index in 2009, and third in GDP-per-capita according to the World Bank. It is an exporting powerhouse, in particular for petroleum and metals, which has generated an extremely large trade surplus and resulted in one of the largest sovereign wealth funds in the world.
The Global X FTSE Norway 30 ETF tracks the FTSE Norway 30 Index, which is designed to reflect broad based equity market performance in Norway. The Norway ETF adds to the existing Global X FTSE Nordic 30 ETF (Ticker: GXF), which is a broader Scandinavian fund that accesses Norway, Denmark, Sweden and Finland. Wall Street to sidestep ‘Volcker rule’ read more
CFTC sets date for swaps proposals read more Greenspan warns over weaker dollar read more NYSE Liffe U.S. Incentive Programs for Global FCMs and International Traders GFIP key features: FCMs can receive a rebate of $0.25/side traded by a client new to NYSE Liffe U.S.
precious metals futures
Rebates apply to both the mini- and full-sized precious metals futures contracts read more Statement on Support of the Dodd-Frank Rulemaking of Chairman Gary Gensler Registration Process for Swap Dealers and Major Swap Participants Rulemaking I support the proposed rulemaking to establish a process for the registration of swap dealers and major swap participants. This proposal would implement Congress’s mandate that these entities be subject to registration and regulation for their swaps business. Registration will enable the Commission to monitor swap dealers and major swap participants for compliance with the Dodd-Frank Act and Commission rulemakings. Through regulation of the dealers, the Commission will be able to protect market participants and the public and promote sound risk management practices. The proposal includes a requirement that swaps dealers and major swap participants register with a registered futures association, such as the National Futures Association. This would provide the Commission with flexibility with regard to its oversight of swap dealers and major swap participants for compliance with the Dodd-Frank Act. read more Opening Statement, Meeting of the Commodity Futures Trading Commission Risk management policies of swap dealers and major swap participants; • Two rules concerning firewalls and conflict-of-interest policies and procedures by swap dealers, futures commission merchants and other intermediaries; and Designation of a chief compliance officer and related compliance policies of swap dealers, major swap participants and futures commission merchants. read more
Source: Global X
November 10, 2010--Wall Street groups will continue to invest billions of dollars in property and companies in spite of new rules aimed at curbing banks’ bets with their capital, executives say.
US financial groups such as Goldman Sachs, JPMorgan Chase and Morgan Stanley intend to take advantage of a little-discussed aspect of the “Volcker rule” – part of the financial reform lawapproved in July – to continue making direct investments.
Source: FT.com
November 10, 2010--US regulators, facing criticism that key rules for derivatives markets are taking too long to draft, said they planned to detail which institutions would be subject to tough new regulations on December 1
The keenly awaited definitions will determine the amount of capital derivatives market participants from banks to energy companies have to put aside..
Source: FT.com
November 10, 2010--The US is pursuing a policy of weakening its currency which is driving up exchange rates in the rest of the world, according to Alan Greenspan, the former chairman of the Federal Reserve.
Writing in today’s Financial Times ahead of the G20 meeting in Seoul, Mr Greenspan argues that with China also holding down the renminbi..
Source: FT.com
November 10, 2010--NYSE Liffe U.S. is pleased to announce the launch of two new incentive programs in precious metals futures:
The Global FCM Incentive Program (GFIP)
The International Trader Incentive Program (ITIP)
The GFIP provides Exchange fee rebates to FCMs facilitating access on behalf of new clients to the NYSE Liffe U.S. precious metals futures product suite.
Source: NYSE Liffe U.S.
November 10, 2010--Statements for the record on each rule:
Whistleblowers
I support the proposed rulemaking to establish a program for whistleblowers as mandated by the Dodd-Frank Act. Congress enacted these provisions to incentivize whistleblowers to come forward with new information about potential fraud in the financial markets.
The proposed rulemaking authorizes the Commission to provide a monetary award to whistleblowers when their original information results in a successful enforcement action. The rule also provides that moneys recovered will fund new customer educations initiatives to protect the public. The proposed rules encourage persons with knowledge to come forward and assist the Commission in identifying, investigating and prosecuting potential violations of the Commodity Exchange Act.
Source: CFTC.gov
November 10, 2010--November 10, 2010
Good afternoon. This meeting will come to order. This is a public meeting of the Commodity Futures Trading Commission to consider issuance of the following proposed rulemakings under the Dodd-Frank Wall Street Reform and Consumer Protection Act:
Registration of Foreign Boards of Trade;
Registration of swap dealers and major swap participants;
Implementation of new whistleblower provisions of the Commodity Exchange Act;
Source: CFTC.gov
