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DB Global Equity Research: North America-US ETF Market Weekly Review : $72.5bn vanished from ETP AUM on market free fall
August 11, 2011--Risk Off trade rules the markets
The widespread sell-off continued into last week and intensified as the US debt ceiling deal failed to meet market expectations. In addition, the European Sovereign woes and global recovery concerns confirmed the risk off trade as the new ruler across the markets. Equity markets in the US (S&P 500) plunged by 7.19%, the largest weekly drop since November 2008.
The total US ETP flows from all products were $5.5bn of outflows last week vs $1.9bn of outflows the previous week, setting the YTD weekly flows average at +$2.0bn. US ETP AUM lost $72.5bn, closing at $1.02 trillion or 2.4% up YTD.
Long only equity ETPs recorded $7.7bn of outflows last week vs $3.2bn of outflows the previous week. From a geographic allocation perspective, most segments were in red, US-focused, DM ex US, and EM ETPs all experienced outflows of -$6.1bn, -$949m and -$711m last week, respectively; while Global products experienced small inflows of $77m in the same period.
Long-only fixed Income ETPs recorded inflows of $470m last week. Sovereign ETPs received $547m in inflows, followed by Sub-Sovereign funds with $139m. Commodity ETPs recorded inflows of $2.0bn last week. At a sector level, Precious Metals ETPs recorded the largest inflows with $1.8bn; while no sector experienced significant outflows.
After weeks of uncertainty, it seems that investors have finally elected the risk off trade as the new ruling trend. After about 5 weeks since the beginning of Q3, long-only US-focused Equity, Fixed Income, and Gold ETPs have experienced flows of -$2.1bn, +$3.2bn, and +$5.1bn, respectively (Figure 1).
Flow patterns, the free fall of the equity market, the rally in the Bond (mainly IG) and Gold markets, and the surge in Volatility levels, all suggest that the risk off trade is back in full. Although we see some similarities between this and last year’s risk off trade in Q2, we also recognize some important differences that suggest that the size of the current flight from risky assets could be larger and more extended (Figure 2 and 3).
New Launch Calendar: more alternatives for equity investing
Three new products were launched in the NYSE Arca during the last week. The new ETPs offer additional equally-weighted version for US benchmarks and new strategies for broad Emerging Markets exposure.
Turnover Review: trading almost doubled as VIX reached a new 2011 high
Total weekly turnover increased by 93.5% to $727bn vs. $376bn in the previous week. The largest increase was on Equity ETP turnover which rose by $313bn or 94.4% to $644bn. Commodity ETPs turnover increased by $19.3bn to $44.7bn last week driven by Precious Metals and Crude Oil. Finally, Fixed Income products turnover increased by 102% totaling $32.6bn at the end of last Friday.
Assets Under Management (AUM) Review:
Market free fall erases $72.5bn Markets entered panic mode and triggered a global sell-off across equities. ETP AUM dropped by $72bn or 6.6% falling to $1.02 trillion as of the end of last Friday. Assets on a YTD basis have recorded a $24bn (2.4%) increase.
Component Changes Made To Dow Jones Cyprus Titans 10 Index
August 11, 2011--Dow Jones Indexes, a leading global index provider, today announced component changes in the Dow Jones Cyprus Titans 10 Index.
Muskita Aluminium Industries PLC (Cyprus, Construction & Materials, MAI.CP) will be deleted from the Dow Jones Cyprus Titans 10 Index and replaced by Vasilikos Cement Works PCL (Cyprus, Construction & Materials, VCW.CP).
Muskita Aluminium Industries PLC is being removed due to its acquisition by Muskita Investments Ltd. The changes in the Dow Jones Cyprus Titans 10 Index will be effective as of the open of trading on Wednesday, August 17, 2011.
The Dow Jones Cyprus Titans 10 Index measures the performance of 10 leading stocks traded on the Cyprus Stock Exchange. The Dow Jones Cyprus Titans 10 Index is reviewed annually in March.
Further information on the Dow Jones Cyprus Titans 10 Index can be found at www.djindexes.com
Company additions to and deletions from the Dow Jones Cyprus Titans 10 Index do not in any way reflect an opinion on the investment merits of the company.
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
August 11, 2011--Standard & Poor's Canadian Index Operations announces the following index changes:
On August 5, 2011, Bridgewater Systems Corporation (TSX:BWC) received shareholder approval for their Plan of Arrangement with Amdocs Limited (NYSE:DOX).
Amdocs will acquire Bridgewater for $CDN8.20 cash per share. Bridgewater will be removed from the S&P/TSX SmallCap and Equity SmallCap Indices effective after the close of Wednesday, August 17, 2011.
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.
SEC's New Whistleblower Program Takes Effect Today
August 11, 2011-- With its new whistleblower program officially becoming effective today, the Securities and Exchange Commission today launched a new webpage for people to report a violation of the federal securities laws and apply for a financial award.
The Dodd-Frank Wall Street Reform and Consumer Protection Act provided the SEC with the authority to pay financial rewards to whistleblowers who provide new and timely information about any securities law violation. Among other things, to be eligible, the whistleblower's information must lead to a successful SEC enforcement action with more than $1 million in monetary sanctions.
The SEC's new webpage at www.sec.gov/whistleblower includes information on eligibility requirements, directions on how to submit a tip or complaint, instructions on how to apply for an award, and answers to frequently asked questions. Food commodities prices surge Morningstar Reports U.S. Mutual Fund and ETF Asset Flows Through July 2011 Additional highlights from Morningstar’s report on ETF flows:
U.S.-stock ETFs collected inflows of $6.4 billion in July to top all other ETF asset classes for the second consecutive month.
After outflows of $3.7 billion and $892 million in May and June, respectively, commodities ETFs reversed course in July and recorded inflows of $3.7 billion. Precious-metals offerings accounted for the majority of inflows into commodities ETFs.
Taxable-bond ETFs made another solid contribution to overall ETF inflows in July, with $3.3 billion in new assets. The asset class has not seen a net monthly outflow since December 2010.
International-stock ETFs built on June’s inflows of $2.4 billion with inflows of $3.8 billion in July. view Morningstar Fund Flows report
Van Eck files with the SEC CME Group Volume Reaches All-Time High On August 9 Stanford University and the FINRA Foundation Launch Fraud Prevention Research Center
"The FINRA Foundation's partnership with Stanford will deliver practical, cutting-edge research to policymakers and law enforcement. This new joint initiative complements an array of FINRA Foundation initiatives to protect Americans from fraud," said Gerri Walsh, Acting President of the FINRA Foundation.
The Research Center's inaugural conference, The State and Future of Financial Fraud, will take place November 3 – 4, 2011, at the Sofitel in Washington, D.C. The conference will bring together policymakers, researchers, practitioners, law enforcement, advocacy groups and other stakeholders to discuss actionable implications of the latest research and evidence-based programs that successfully arm consumers against fraudulent tactics. Senior public officials and leading researchers will deliver keynote addresses and the conference will feature profiles of fraud victims and perpetrators. Rydex files with the SEC Latin America: World Bank Experts Confident in Region's Resilience to Global Turmoil But he warned that a worsening of the current turbulence -"a global turmoil of immense magnitude”, he said- could impact Latin America’s ability to grow. “Not even the best immune system in the world could withstand these kinds of attacks,” he noted. Such 'worsening' would materialize if rich economies –Europe, United States, the developed countries– dip into recession once again, de la Torre said. Under this scenario a US slowdown would have a larger impact on its close trade partners, including Mexico, the Caribbean and Central America. Economies linked to China –essentially those in South America– would sustain a lesser impact, provided the Asian giant continues its current high growth trend. State Street-US ETF Snapshot: July 2011 With $3.9BN of net flows, Commodity assets grew by $12.9BN.
FLOWS
Manager and Fund Detail
•The top three ETFs in terms of assets for the month were the SPDR S&P 500 [SPY], SPDR Gold Shares [GLD], and Vanguard Emerging Markets [VWO].
visit www.spdrs.com for more info
EGShares Launches Fourth Emerging Markets Consumer Fund with ETF Targeting India’s Leading Consumer Companies (NYSE Arca: INCO) EGA is committed to developing research-based tools to invest in emerging markets with greater precision than broad indices. The firm has consistently been first to market with ETFs seeking to allow investors to access what EGA believes is the largest single theme in emerging market investing, the rapidly growing ranks of middle class consumers. EGA’s flagship consumer fund is EGShares Emerging Markets Consumer ETF (NYSE Arca: ECON), a multi-country portfolio consisting of some of the leading emerging markets stocks. Sizemore Capital Management Launches a Tactical ETF Portfolio on Covestor
The model utilizes all major asset classes, including U.S. and global equities, emerging market equities, bonds, currencies and commodities, as market conditions warrant. The model attempts to allocate to those asset classes the manager believes to be undervalued while avoiding or selling those asset classes deemed to be overvalued. CFTC.gov Financial Data for Futures Commission Merchants Update
August 11, 2011--Food commodities prices surged after the US government slashed its forecast for the country’s crops due to the impact of a heatwave and drought.
The US Department of Agriculture painted a bullish picture in particular for corn prices, saying: “Unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects.”
August 11, 2011--Morningstar, Inc., a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through July 2011. July’s long-term mutual fund outflows of $17.1 billion marked the greatest monthly net redemption since December 2008, again fueled by the flight out of U.S.-stock funds.
The asset class shed $22.9 billion in July, the greatest outflows since investors withdrew $27.9 billion during the peak of the credit crisis in October 2008. U.S. ETFs saw inflows of $17.2 billion in July, building on inflows of $9.8 billion a month earlier. Total ETF assets have increased roughly 25 percent over the trailing 12 months.
August 11, 2011--Van Eck has filed a post-effective amendment, registration statement with the SEC for the Market Vectors Biotech ETF.
view filing
August 10, 2011-- CME Group, the world's leading and most diverse derivatives marketplace, reached a record high in single-day volume with 25,734,651 contracts traded across all asset classes on Tuesday, August 9, surpassing the previous record of 25,282,704 contracts on May 6, 2010.
Additionally, record volumes were reached in gold futures and options with 504,368 contracts, surpassing the July 28, 2010, record of 469,689 contracts, and Australian dollar futures and options with 311,684 contracts, surpassing the August 5, 2011, record of 285,355 contracts.
August 10, 2011--Stanford University's Center on Longevity and the FINRA Investor Education Foundation have joined together to launch the Research Center on the Prevention of Financial Fraud, an interdisciplinary resource for law enforcement, government and research groups studying financial fraud. Financial fraud, ranging from Ponzi schemes to online phishing scams and work from home schemes, swindles Americans out of billions of dollars each year. While emerging technologies continue to fuel the expansion and reach of financial fraud, this joint initiative will support and consolidate scientific research and connect this research to practical prevention and detection efforts.
"Financial fraud is a serious economic and social problem for people of all ages and our rapidly aging population places an increasing number of older adults at risk for fraud. With the Center on Longevity's dedication to preserving financial security throughout our extended life spans, and with the support of the FINRA Foundation's ongoing commitment to protecting individuals from fraud, the new Research Center on the Prevention of Financial Fraud seeks to enhance the financial security of Americans," said Dr. Laura Carstensen, Stanford Professor in Public Policy, Professor of Psychology, and Founding Director of the Stanford Center on Longevity.
August 10, 2011--Rydex has filed a Post-Effective Amendment No. 21, registration statement. This filing relates solely to the Trust’s Rydex S&P MidCap 400 Equal Weight ETF and Rydex S&P SmallCap 600 Equal Weight ETF.
view filing
Latin America is in good position to weather the current global turmoil
A new global recession could impact parts of the region
The region's poor are shielded by strong social protection nets
August 10, 2011-- Latin American economies have developed strong immune systems against global contagion but a worsening of the current market turmoil could put those defenses to the test said World Bank Chief Economist for Latin America and the Caribbean, Augusto de la Torre.
“Over the last 20 years the region has experienced a silent economic revolution that has provided a shield against external shocks, as we have witnessed in the previous crisis and those reforms are still in place ,” de la Torre noted.
August 10, 2011--1,108 Exchange Traded Funds (ETFs)—with assets totaling $1.1TN—were managed by 36 ETF managers as of July 31, 2011.
Month over month, ETF assets rose $9BN, up 0.8%.
Sizeable gains in the Commodities and Fixed Income asset classes fueled an $8.9BN increase in overall assets in the ETF Industry for July.
ETF Industry Detail
Asset Classes — Overall
While the MSCI EAFE® Index dropped 1.6%, the S&P 500® Index lost 2.0%. Commodities were positive, with the S&P GSCI Index increasing 2.4% and Gold soaring 8.2%. U.S. Bonds were also positive with the Barclays U.S. Treasury and the Barclays U.S. Aggregate Index up 1.8% and 1.6%, respectively.
ETF flows topped $13BN in July. Size - Large Cap had the most inflows for the second straight month, drawing $6.0BN. Fixed Income continued to see positive inflows, attracting $2.6BN in July and $18.8BN year-to-date. With $1.9BN leaving the category, Size - Small Cap saw the most significant outflows.
The top three managers in the US ETF marketplace were: BlackRock, State Street, and Vanguard. Collectively, they account for approximately 83% of the US listed ETF market.
More India Sector Funds Planned For Later This Year
August 10, 2011--Emerging Global Advisors (EGA), an asset management company focused exclusively on emerging markets and the sub-advisor to the EGShares family of exchange-traded funds (ETFs), announced today the successful launch of INCO, a fund targeting a number of India’s leading consumer companies.
INCO, EGA’s fourth emerging markets consumer fund, seeks to replicate the INDXX India Consumer Index, a 30-stock composite of companies in a wide range of industries, including automotive, personal products, media, textiles, apparel, and luxury goods. The fund, which is passively managed, directly owns the stocks in its portfolio and doesn’t use options, swaps, or other derivatives. INCO’s portfolio stocks are listed on India’s National and Bombay stock exchanges, and few can be bought or held directly by US investors.
Mirrored Investing Platform Expands Global Offerings for Retail Investors
August 10, 2011-- Sizemore Capital Management LLC has launched a global ETF investment model on Covestor (http://covestor.com), the mirrored investing platform that enables clients to replicate the trading strategies of proven investors.
The Sizemore Capital Tactical ETF Portfolio, managed by Sizemore Capital Management Chief Investment Officer (www.sizemorecapital.com) and Sizemore Investment Letter (http://sizemoreletter.com) founder and editor, Charles Sizemore, is a Global Macro ETF model with a strong contrarian value focus.
August 10, 2011--Selected FCM financial data as of June 30, 2011 (from reports filed by August 01, 2011) is now available.
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